Abacus Daily Debt News

Britons are reluctant to cut back on holidays, with many indicating it would be the last area where they would be willing to reduce spending, one travel agency has suggested.

A spokesperson, speaking on behalf of the recently merged Thomson Direct and First Choice, said that according to a survey by the company, individuals are fiercely protective of their time off.

She said: "A staggering 88 per cent of those questioned stated they would cut back in other ‘luxuries’ such as eating out and home improvement, rather than cutting back on their holidays."

Furthermore, the statistics showed 59 per cent would only stop spending on a vacation as a last resort.

Her comments follow a recent PricewaterhouseCoopers report, which found that one-third of Brits aim to choose a staycation over time abroad this year.

The study also discovered there has been a decline in the quarterly UK insolvency rate for travel agencies.

By Francis Finch

Debt management should be taught at an early age to ensure young people are fully capable of understanding their financial responsibilities when they are older, one expert has suggested.

Director of operations at charity Personal Finance Education Group Gary Millner said many people are taking on bills when they are much younger and it is important individuals are properly prepared.

He stated: "From research we’ve done, young people are starting to make their financial decisions at the age of seven when their parents made them at ten."

The average age for first getting a mobile phone is currently eight years old, Mr Millner added, which means children need to be aware of how tariff prices and network deals operate.

School leavers need to be properly instructed on how to budget and manage finances, so that shopping around for a better package is possible, he remarked.

His comments come after 73 per cent of people surveyed in a recent Uswitch study claimed a mathematics qualification is required to understand household energy charges.

By Francis Finch

First-time buyers are being advised to make sure they do not step on to the property ladder unless they are sure about their financial future and have secured a good deal.

Helen Adams, managing director at FirstRungNow.com, explained that potential homeowners should consider whether now is the correct time to take out a home loan because mortgage offers remain high as banks are cautious about lending.

She urged buyers to assess their options carefully, rather than make a hurried decision.

"You’d have to get a good property bargain and a reasonable mortgage for this to be a good time to step on to the property ladder. I wouldn’t rush into it," explained Ms Adams.

According to Moneyfacts.co.uk, the average five-year fixed rate is currently six per cent, despite the Bank of England’s base rate standing at a record-low of 0.5 per cent and the three-month inter-bank lending rate being at 1.08188 per cent.

By Suzi Richards

New plans by regulatory body Ofwat could enable people that are struggling financially to manage their debt more easily, one expert has suggested.

The new guidelines could see household bills for water and wastewater stay largely stable until 2015, with the institution able to set the prices utilities can charge.

Deputy chief executive at campaigning organisation Consumer Focus Philip Cullum stated it was important that people recognise the need to preserve water, but not at the expense of essential requirements.

He said: "Lower prices will be good news for vulnerable customers struggling to pay the bills and who may be limiting the amount of water they use."

According to the draft proposals, Ofwat will attempt to reduce the average family water and sewerage charges by four per cent by 2015, before inflation is considered.

A final decision on what organisations can charge for services will made in November and the new billing arrangements will be introduced in April next year.

By Francis Finch

Cash-strapped individuals in the UK do not want to give up their holidays despite the current economic climate, one expert has suggested.

Sarah Munro, head of Post Office Travel Services, said many Brits are looking to save money in other ways, with a number choosing to bunk up with friends or relatives.

She remarked: "UK holidaymakers spend on average £211 per person, per week on holiday accommodation so it is understandable that people are looking to cut costs by staying with loved ones."

Long-haul holidays are also still popular despite the recession, Ms Munro added, with destinations such as Kenya, Bali, Egypt and Thailand all experiencing sustained interest.

Kenya has seen an increase of 171 per cent growth in currency sales this year, she stated, showing the UK population is not abandoning far-flung locations.

According to research by the organisation, 60 per cent of people in Britain still aim to take a holiday abroad this summer.

By Francis Finch

Child Trusts Funds (CTFs) may prevent individuals with learning disabilities from receiving state benefits when they are older, one expert has suggested.

Aarti Puri, in-house lawyer at charity Mencap, said the scheme was "a good idea in principle", but funds saved in the name of disabled people could count as capital at a later age.

She remarked: "The government need to re-consider what rules will apply to a person with a learning disability who may need assistance from the state once they turn 18."

Parents could choose a family discretionary trust fund, Ms Puri added, in which money can be saved without affecting means-tested benefits through the child’s life.

However, these type of arrangements do not hold the kind of tax relief that CTFs do, she stated.

Her comments come after BBC Radio 4’s Money Box programme aired a discussion on how CTFs may adversely affect those with disabled children.

By Francis Finch

Rising unemployment and lower average earnings could be causing people with debt management issues to be much more careful with their spending patterns, one expert has suggested.

Head of research and chief economist at the Finance & Leasing Association Geraldine Kilkelly said that in-store credit is the only form of lending to buck the trend.

She stated: “Store installment credit allows customers to borrow in a very controlled way for a particular purchase, with repayments being easily planned within their household budget.”

Her comments follow the release of figures by the organisation showing that overall consumer credit provided by its members has fallen by 18 per cent.

A lack of liquidity across a number of markets has affected access to financing, with secured loans exhibiting an 85 per cent drop.

This follows a recent report by NS&I that found people are putting aside more money a month now than at any point since the company began its annual survey.

By Francis Finch

A tough labour market has affected younger people more than any other demographic, according to one expert.

Thomas Usher, research fellow at the Institute for Employment Studies, said rising unemployment has caused recent graduates to find it difficult to obtain suitable jobs in the UK.

Those worried about getting behind on their student loans and maybe in need of debt management help should not be too concerned, as payments will be deferred until an individual is earning more than £15,000 a year.

Mr Usher also noted that graduates who do end up in a position they want should be commended, but those who find themselves in “dead-end jobs” could find it “stressful and isolating”.

Some university leavers may have to consider switching up their options or delaying plans they have put in place, he stated.

His comments come after Office for National Statistics figures found the largest quarterly increase of economically inactive people was among students.

By Francis Finch

The recession is not putting Britons off taking trips abroad, a survey has indicated.

According to Sainsbury’s Travel Insurance, consumers are attempting to escape the financial problems they are experiencing by actually taking more holidays.

Research by the firm revealed that a total of 56 million breaks are planned, with 16.4 million people intending to go on more than one trip this summer.

Sam Marrs, manager at Sainsbury’s Travel Insurance, remarked: "It would appear that rather than sacrificing our holidays, we Britons may even be taking more breaks in a bid to put all the credit-crunch doom and gloom behind us."

Despite the weakness of the pound against the euro, 36 per cent of holidaymakers intend to visit the eurozone.

The findings come after Jonathan Mitcham of Which? Holiday suggested that trips to Europe are likely to fall this year, as consumers look for ways to save money in order to avoid the need for debt help.

By Andy Mackay

Being aware of etiquette in other countries can help holidaymakers save significant amounts of money, it has been noted.

M&S Travel Money explained that learning customs when it comes to tipping could help those who are worried about their outgoings to significantly reduce the amount they spend while away.

A survey by the firm indicated that up to 30 per cent of holiday cash goes on tips, with 40 per cent of people failing to familiarise themselves with what is expected.

"Most British families don’t consider the additional cost of customary tipping in countries like the USA, Egypt and some parts of Europe," said M&S Travel Money manager James Yerkess. "They will also often pay over the odds."

The research showed that one in six people think it is customary to tip in Japan, despite the practice being considered highly insulting in the country.

Meanwhile, Jonathan Mitcham of Which? Holiday has noted that many people are cutting back on holiday spending as a result of the recession.