Abacus Daily Debt News

Women are generally more astute than men when it comes to money and spending matters, but an increasing amount are too trusting of banks and bank managers, an industry expert has said.

According to Jasmine Birtles, finance commentator and founder of consumer website Moneymagpie.com, a lot of mothers and homemakers are in the saving and bargain hunting mindset - suggesting that they are more wary of falling into debt.

However, she also stated that women often "make the big mistake of going to their bank manager for advice, which is the worst thing to do - even worse than going to a financial adviser".

Ms Birtles went on to say that women can be more likely to spend money on their family at the expense of their futures and that there are a lot more old age women living in poverty than men.

Previous research from National Savings and Investments found that females are more likely to know their precise financial situations than men.

By Sarah Adie

More and more people are becoming concerned with saving as a result of the recession, new research has found.

According to the Nationwide Savings Index, increases were seen in future savings, importance of savings and the savings environment - indicating that consumers are more interested in saving than they have been since the survey was founded a year ago.

Head of consumer finance at lovemoney.com Ed Bowsher remarked that the savings market did seem to be recovering, with the recession urging people to save for the future to prevent them falling further into debt if and when hard times return.

"We say that ideally you should have a savings equivalent to three months’ salary," he said, adding that it is best to put money away during more positive times in preparation.

Recent figures from the Office for National Statistics revealed the household savings ratio - the amount that households save, not spend - was at three per cent during the first quarter of 2009, a rise from -0.8 per cent in the same period in 2008.

By Sarah Adie

The parents of children graduating from university could find themselves in debt as a result, an industry expert has said.

According to David White, chief executive of The Children’s Mutual, higher education can cause a true financial strain with lasting effects.

"Often, parents are left with no other option but to dip into their savings or remortgage their house. This can have a serious impact on their own financial futures," he remarked.

Mr White added that setting up trust funds is a good way to combat these problems, stating that parents who save £24 a month could have an account worth £9,750 when their child reaches the age of 18.

Figures from The Children’s Mutual show that the average student requires approximately £42,000 to cover three years in further study.

Recent research from Halifax indicates that although 59 per cent of students claim to be reducing their outgoings, the average spent on living expenses has risen by five per cent since 2008.

By Sarah Adie

Britain is taking longer to come out of the recession because it has spent so much money aiding financial institutions, one expert has suggested.

Senior Analyst for currency exchange company Caxton FX Duncan Higgins stated that the £1.5 trillion given to banks has caused a discrepancy in the budget.

"This rising deficit has repelled both consumer and investor confidence and prevented Britain from achieving similar rates of recovery [to other countries]," he said.

His comments come after Japan revealed it has seen its gross domestic product (GDP) grow by 0.9 per cent, while France and Germany both posted a 0.3 per cent rise in GDP for the second quarter of 2009.

All is not doom and gloom, Mr Higgins explained, as Japan’s recovery was linked to its government’s stimulus programme, which bodes well for Britain’s quantitative easing measures.

The British Retail Consortium recently revealed that consumers are still reluctant to spend, with many only spending on essential items such as food during the current economic climate.

By Francis Finch

A substantial number of British consumers are concerned about their finances and debt management, new figures have suggested.

More than one million believe their current financial situation to be "awful", according to Sainsbury’s Finance, while 3.6 million admit they either delay opening bank statements or ignore them altogether.

Karen Horsburgh, who heads up Sainsbury’s new website Money Matters, said people should ask for help rather than try to forget about their problems.

"If you have money worries the best course of action is to tackle any financial concerns head on and seek advice on how to start rectifying the situation," she remarked.

The Sainsbury’s research also revealed that some people are hiding their problems from partners. Approximately 1.75 million are concealing some form of debt, while 1.92 million try to cover up extravagant or expensive purchases.

Last month, the company stated that an increasing number of people are aiming to holiday at home this year as a result of financial worries.

By Chris Trimble

The economic recovery would benefit from people following good debt management practices, it has been suggested.

Economist Melissa Kidd of macroeconomic analyst Lombard Street Research stated that it would be "undesirable" for the UK to move away from the recession on the back of high lending levels as the country could end up in a situation similar to the one which led to the credit crunch.

"It would be preferable to have a slower burning recovery based on paying down of debt and solidly built on demand that it is not fuelled by credit," she remarked.

Ms Kidd added that she hoped the economy will become less reliant on debt as a whole and indicated that Germany’s strong focus on savings might be a good example to follow.

Her comments were made as the CBI revealed businesses are finding it easier to obtain credit for the first time since 2009 began.

By Chris Trimble

People of an older age are increasingly likely to be feeling the pinch of the economic downturn, it has been suggested.

A spokesperson for the Consumer Credit Counselling Service noted that the organisation is now servicing more middle-aged individuals seeking debt management advice than previously.

He remarked: "One of the effects of the recession has been redundancies. Older people, perhaps, if they are made redundant will find trouble getting another job."

On the other hand, younger adults could benefit from being "web savvy", which enables to them to take advantage of internet-based recruitment practices, the source added.

Those in a lower age bracket are also more likely to have the ability to retrain for a different sector, he stated.

According to Friends Provident, a generational divide has been evident during the current economic climate, with older individuals taking a more pessimistic approach to the situation.

The Generation Recession Report found that more than one-third of 18 to 25-year-olds replied that they are not worried about the downturn.

By Francis Finch

Those attending university this summer could find themselves getting into financial problems unless they manage their debts effectively, one expert has suggested.

Personal finance expert at uSwitch.com Louise Bond said students should ensure they pick the right current account to avoid stretching their budgets.

"For many graduates, debt is an expected millstone around their neck long after they leave university," she stated.

This means individuals should "give themselves the best possible chance" of pre-empting any money worries and judge each graduate account on its merits, Ms Bond added.

People should not be sucked in by large overdrafts and freebies, but should instead examine the interest rates and accompanying charges, she remarked, as this will make more of a difference in the long run.

According to recent statistics by ClearDebt, the 18 to 24 age group makes up 17 per cent of those seeking debt management services with the company.

By Francis Finch

People could benefit from a number of financial institutions increasing the savings products available to consumers in efforts to raise their competitiveness, one comparison site has suggested.

According to Moneyfacts.co.uk, new deals are being launched every day and fixed-rate bond packages have jumped from three products paying over four per cent in March 2009 to over 104 now.

Michelle Slade, spokesperson for the organisation, said that it is important that customers are well informed before making a choice on an account.

She remarked: "Savers are seeing increased levels of choice for their money, but they need to take the time to make sure the product they select is suitable for their needs."

Those looking at long-term deals should note that they may become uncompetitive once the base rate increases Slade added.

Ian Boden-Smyth for the UK Insolvency Helpline recently commented that Britons have suffered from irresponsible lending on the part of certain bodies.

By Francis Finch

Companies throughout the UK are continuing to falter because of poor lending on the part of banks, one politician has suggested.

Liberal democrat shadow chancellor Vince Cable said the Bank of England’s decision to increase quantitative easing "is the right way to go", but argued that it may not filter through because of creditor behaviour.

He remarked: "As financial institutions continue to hoard money, quantitative easing has not yet fed through to the rest of the economy. It’s vital that it does."

It is important that the additional money is supported by government policy to aid organisations in accessing finances to help them through the recession, Mr Cable added.

By pushing ahead with more quantitative easing, he stated, the Bank of England has made it clear that the UK economy has not fully recovered yet.

The Bank of England Monetary Policy Committee decided to increase its programme of asset purchases yesterday (August 6th) from £50 billion to £175 billion.

By Francis Finch