Abacus Daily Debt News

The boomerang generation - typically used to refer to graduates and young adults who move back in with their parents - has now been extended to include people in their 30s and 40s.

This is according to new research from Abbey, which found that there are 440,000 people aged between 25 and 34 and 741,000 between 35 and 44 living at home in part because of the recession, the Daily Mail reports.

Matt Hutchinson of Spareroom.co.uk observed that this is likely to go on "until house prices become more affordable", noting that mortgage providers could also relax their loan criteria, which might have an affect.

And the news source cited figures from the Land Registry showing that the average price of property in England and Wales is climbing, up by 0.9 per cent in November, suggesting that first-time buyers will struggle to get on the ladder.

However, it recently emerged that the number of mortgages for such people are on the rise, with 1,354 products available at the beginning of December.

By Sarah Adie

A repossession initiative that was launched by the government helped some 33,000 people avoid eviction over the Christmas period, it has emerged.

Justice minister Bridget Prentice observed that the loss of a home is "one of the most traumatic events" that can occur, adding that the government has been striving to ensure that debtors are given all the assistance available before this becomes unavoidable.

This, she continued, includes "financial assistance and debt advice".

It was also announced that the Ministry of Justice has brought out a new scheme that will give homeowners the opportunity to seek court protection when they are faced with repossession.

This is intended to close a loophole that could see lenders sell properties without owner consent or court approval.

In related news, recent figures from the Financial Services Authority revealed that in the third quarter of 2009, fewer houses were repossessed, totalling 14,000 for this period - a drop of five per cent below the peak seen months before.

By Sarah Adie

Millions of people may face increasing debt management problems, as it has been revealed that death duties could climb to £60,000 under a Labour government.

This is according to the Conservatives, who warned the middle classes that they could suffer this hike in taxes, although Alistair Darling has stated repeatedly that only three per cent will be affected by this, the Daily Mail reports.

Commenting after figures from the Office for National Statistics revealed that 4.3 million would face paying this tax if they died, the shadow chief secretary to the Treasury Philip Hammond observed that "the real victims … are middle-income families".

"If you aspire to save for your future and pass something on to your children then Labour is no longer the party for you," he said.

This comes after Martin Bamford of Informed Choice recently noted that Britain’s middle classes will be the most affected by the Pre-Budget Report.

He predicted a rise in income tax bills in 2010, as a result of earnings inflation.

By Sarah Adie

Those looking to take out loans in the future may be buoyed by the news that mortgage lending for November climbed to a two-year high.

Figures from the British Bankers’ Association revealed that homeowner loans rose by 152.3 per cent on the same period a year ago, as well increasing by 0.4 per cent on November 2007 and Katie Tucker of mortgageforce noted that these numbers are "very encouraging".

She observed that lenders have "very strong targets" for the next 12 months and it is likely that the statistics will be "considerably higher" in 2010 as well.

Remarking upon the fact that the value of house purchase loans approved in November reached £6.6 billion, Ms Tucker said that the lack of self-cert and sub-prime lending means that it is unlikely that specialist lending will reach the levels of the summer of 2007.

This, she continued, is "the only barrier we have to reaching 2007 levels".

By Sarah Adie

Britons hoping to take out loans next year could find it difficult to be accepted, as a result of circumstances of the past 12 months.

According to moneysupermarket.com’s head of loans Tim Moss, rises in unemployment, as well as hikes in the number of people unable to make repayments, are expected for 2010.

As a result of these occurrences taking place in 2009, Mr Moss continued to say that many banks have lowered the number of personal loans on offer, with some only choosing to lend to those already with them.

"They’ve also increased the price of credit," he added, noting: "There’s no reason to believe that this will change over the next few months."

Mr Moss’s comments follow recent research from the organisation, which found that analysis of figures from the British Bankers’ Association revealed borrowers are finding it increasingly hard to get a loan.

According to the body, monthly lending dropped by 28 per cent in October, while for the same period, the number of people looking for such products climbed by 20 per cent.

By Sarah Adie

Those in debt may be having their problems exacerbated by HM Revenue & Customs (HMRC), as it has been claimed that millions of pounds are being unlawfully held by the organisation.

Director of tax policy with the Chartered Institute of Taxation John Whiting commented on the new guidance note that has been issued to inspectors stating that money can be held without the opening of formal inquiries.

This, he was quoted by the news source as saying, is "contributing to increasing delays in income tax repayments for increasing numbers of people".

And tax partner at Grant Thornton Mike Warburton remarked: "If [HMRC] wants, willy-nilly, to hang on to people’s money, it should ask Parliament to change the law."

A spokesman for HMRC noted that this new form offers tax supervisors a middle road to take and is not illegal.

This is not the only bad news to hit indebted Britons in recent times. It emerged this week that the Office of Fair Trading is preparing to abandon its court case regarding unauthorised bank charges, Sky News reported.

By Sarah Adie

Parents struggling with debt and money troubles have been turning to their children’s savings accounts as a way to make ends meet.

This is according to a new survey by Engage Mutual, which revealed that one in five are doing so, with almost half taking between £200 and £500.

Marketing director at the company Karl Elliot noted that this could be down to "unexpected costs" arising, with nearly 60 per cent stating that their finances have suffered in the last 18 months.

"The problems occur when parents find it hard to pay the money back," he said, adding that the majority of mothers and fathers taking such action only do this after they have "found themselves in a desperate situation".

However, recent research from the Post Office found that adults are also cutting back on goods for themselves, such as clothes and food.

The Daily Mail reported that grown-ups are spending £35 less a week on fuel and attire, while the London School of Economics indicated that kids are receiving on average £6.84 a week in pocket money - a rise of more than 500 per cent from the levels in 1987.

By Sarah Adie

Elderly people are increasingly at risk of debt and other financial burdens, as a politician has revealed that many are forced to sell their homes in order to pay for residential care.

According to Norman Lamb, a Liberal Democrat health spokesman, at least 3,000 older people are having to take such action and he called for a "complete overhaul" of the current system, the Daily Mail reports.

Stating that houses should not be viewed as "fair game" to settle bills, Mr Lamb added: "This government’s treatment of older people is its shameful legacy. Ministers have turned their backs on thousands of older people."

And the news source noted that its Dignity for the Elderly campaign highlights this issue and points out that it is a scandal as elderly Britons have paid taxes throughout their lives.

However, pensioners may be helped by the increased credit levels, equity release specialist Key Retirement Solutions recently observed.

The company noted that Alistair Darling’s alterations increasing capital disregard to £10,000 is a "significant step".

By Sarah Adie

Younger generations could be creating a new benchmark for a better financial future, it has been suggested, as 31 per cent of those aged between 12 and 29 are making debt settlements a priority.

This is according to Friends Provident, which stated that this is a preference for this demographic over saving for a house or subsidising a career break.

Director of UK Corporate James Ward welcomed this development, saying that it is "very uplifting" to witness.

"It is encouraging to see a large percentage of twenty-somethings taking responsibility for their finances and planning for their future at such a young age," he continued.

What’s more, putting money into pensions also appears to be a growing concern for Generation Y, with 44 per cent saving for their retirements already.

This follows a study by Business Development Research Consultants, which recently revealed that overspending is a worry for many Britons and the majority of people are cautious about their expenditure.

By Sarah Adie

Those in debt may like to heed the words of advice from professional advice website Unbiased.co.uk and its independent financial advisers, which have issued a list of its top new year’s resolutions that could help people financially.

Alan Dick of Forty Two Wealth Management suggested figuring out income and expenditure to create a spending plan might be of benefit.

And Bestinvest’s Adrian Lowcock recommended ensuring that debts are a priority. "Not all debt is created equal," he said, adding that liabilities should be organised according to the interest rate.

Further advice came from Danny Cox of Hargreaves Lansdown, who stated that people should assume control of their cash. "Don’t let your money control you," he warned, adding that the easiest way to do this is by writing all expenditures down.

These tips come after the Daily Mail recently reported figures from Aviva Investors showing how money is continually being handed over despite the downturn and increasing worries about debt, with retail spending rising by nearly seven per cent since 2007.

By Sarah Adie