Abacus Daily Debt News

Those at university in their final year of study are more likely than other students to have to turn to paid employment as a way of financing their course and preventing them from falling into too much debt, it has emerged.

Following a study conducted by HSBC and the National Union of Students (NUS) into young people’s financial management, the president of the NUS, Wes Streeting, warned that under the current system of higher education, the government is "in danger of condemning an entire generation to a lifetime of debt".

The research revealed that more than 40 per cent of those coming to the end of their course rely on jobs, compared to 26 per cent of students in their first year.

Another survey by Halifax indicated that over one in seven were worried about their parents not being able to afford to fund them through programmes of further study.

By Sarah Adie

Pension debt in Britain has passed £1 trillion for the first time, according to figures from the Pension Protection Fund.

Statistics from the organisation reveal that the deficit in benefit plans within companies increased by 5.6 per cent in August to reach £1,009.6 billion, 15 per cent higher than the same period in 2008, the Daily Mail reports.

Retirement schemes have also suffered as a result of falling stock markets and - in part - because of the quantitative easing programme implemented by the Bank of England, which pushes down bond yields.

A work and pensions spokesman for the Liberal Democrats, Steve Webb, remarked that the increasing cost of company pension schemes is making it harder for firms to maintain them.

Recent research by Age Concern and Help the Aged revealed that poorer pensioners are using their heating less to reduce costs but are still spending more due to price hikes by energy companies.

By Sarah Adie

People who have suffered from debt problems and consequently gone bankrupt are finding themselves unable to open even the most basic of accounts, the City watchdog has said.

The Financial Services Authority revealed that two institutions - Natwest and Nationwide Building Society - have decided against offering accounts to people who have filed for bankruptcy in the last six years, This Is Money reports.

Furthermore, just two of the 17 high street brands - the Co-operative Bank and Barclays - offer accounting services to those who have initiated bankruptcy proceedings within the last 12 months.

This exclusion of financially weak people by banks exists despite a 2003 scheme set up by the government to implement universal banking, in order to help them regain a position in society.

At the beginning of the month, the UK Insolvency Helpline stated that banks are trying to help those in debt by lowering interest rates for customers finding it difficult to maintain loan repayments.

By Sarah Adie

People struggling with money management are finding it increasingly difficult to pay their debts back, despite recent figures which indicate that people are directing their funds more towards reducing deficits, it has been suggested.

According to Frances Walker of the Consumer Credit Counselling Service (CCCS), approximately 30 per cent of those who come to the charity for guidance are unsuccessful in finding a satisfactory solution.

"[This is because] they haven’t got enough money for a debt management plan or for some reason they are unsuitable for bankruptcy," she said.

Ms Walker went on to add that debt problems are more complicated now, with mortgage arrears and drops in income affecting debt management and people often needing more than one counselling session to resolve their difficulties.

Her comments come in response to figures from the Bank of England, which revealed that net lending had fallen by £0.6 billion in July, the first time a repayment has been seen in the series.

By Sarah Adie

Older people need to increase their awareness of benefit entitlements in order to boost their retirement income, it has been suggested - a move which could help some solve their debt problems.

According to the head of research at Just Retirement, Nigel Barlow, the lack of awareness in those of pension age regarding state benefits is of real concern as the information required is often hard to come by and can be difficult to follow.

"Pensioners can considerably bolster their income by getting to grips with their entitlements, which can be equivalent to getting almost one month’s state pension extra per [year]," he said.

Mr Barlow went on to add that other institutions, such as Age UK, agree that access to benefits needs to be simplified.

His comments came in response to research by Just Retirement, which found that one in four admit they do not know about certain benefit entitlements and three per cent are not claiming enough money from the government.

In other news, Becky Wilks of the Money Advice Trust recently stated that those approaching retirement should attempt to clear their debts prior to leaving work.

By Sarah Adie

Parents concerned about saving money and not falling into debt should monitor what possessions their children are taking to school as the loss of a schoolbag could total hundreds of pounds, an insurance expert has said.

According to the head of home insurance at Direct Line, Andrew Lowe, children can be costly and parents would do well to be vigilant regarding their schoolbags and perhaps consider labelling various items to safeguard against loss.

"The cost of replacing anything that gets lost or stolen can be high. Personal possessions cover on a home insurance policy ensures your children’s favourite things are protected," he said.

Mr Lowe’s comments come in response to a Direct Line survey, which found that articles in schoolbags are more expensive now than in previous generations, with 40 per cent of pupils carrying mobile phones and 18 per cent keeping mp3 players with them.

In other news, a new survey by Age Concern revealed that people were cutting back on travel insurance as a way of saving money during the recession.

By Sarah Adie

Those concerned about rising debt could help themselves by being more vigilant of their energy bills, an industry expert has suggested.

According to a spokesperson from the Consumer Credit Counselling Service (CCCS) - a charity that offers advice and support to people worried about debt - overpaying bills is easy if people are relying on their energy companies to do the calculations, particularly if they are also paying by direct debit.

"In terms of personal debt, if you are not keeping tabs on your bills then you could be overpaying and the amount that you overpay could be used to pay off debts," he said, adding that by not paying more attention to bills, people could be spending money they don’t have, which ends up pushing them into debt.

The statement from the CCCS follows recent research from uSwitch.com, which revealed that 86 per cent of respondents failed a test to work out the cost of their energy bills.

By Sarah Adie