Abacus Daily Debt News

Homeowners are in greater need of assistance during the recession so as to prevent them from defaulting on their loans and having their houses needlessly repossessed.

This is according to a new report from AdviceUK, Citizens Advice and Shelter, which found that in a third of cases, lenders were not compliant with new rules that require them to use court action as a last resort when chasing payments.

The bodies involved in creating Turning the tide? have called for these regulations and others to be enhanced so as to better protect those in debt.

Director of policy and campaigns at Shelter Kay Boycott, observing that the most commonly-cited reason for mortgage arrears is unemployment, said: "With 2,000 people losing their job every day, we must close these gaps urgently to ensure every vulnerable homeowner gets the protection they need."

In related news, Bernard Clarke of the Council of Mortgage Lenders recently noted that the body has had to revise its figures twice this year and, although repossessions may reach 50,000, this is still lower than originally forecast.

By Sarah Adie

Britons have been warned to take care this festive season so as to avoid the 12 scams of Christmas.

The Daily Telegraph has outlined some of the ways in which people can be cheated out of their money at this time, an eventuality that may result in them falling into debt.

According to the UK Cards Association, the National Fraud Authority (NFA) and the City of London Police, the most popular methods used by fraudulent individuals during the yuletide period include slimming and miracle cures, loan scams, phishing emails and rogue ticket websites.

The head of the NFA, Bernard Herdan, was quoted by the news source as saying that "fraud is not a victimless crime. In some cases, it destroys lives".

Gold-buying firms were also recently highlighted by the publication as being dangerous for debtors, with trading standards officers discovering a wide range of price quotes being given for a single piece of jewellery, from £17 to £32.

By Sarah Adie

Many parents fall into debt over the Christmas period because of the pressure of providing for their children at this time.

This is the opinion of Amy Schofield, the editor of education and parenting site MyChild.co.uk, who observed that those most susceptible to spending too much are "often families who cannot afford to do it".

Such actions, she continued, cause them to "get into debt".

Ms Schofield advised parents to "get back to basics" and try to remember that the festive season is not about money so as to "avoid getting swept along on the overspending tide of Christmas commercialism".

She recommended that mothers and fathers steer clear of credit cards but, should the need arise to use the plastic, ensure that only what can be paid back entirely the following month be spent.

Ms Schofield’s comments come after recent research from internet bank Egg found that the average household will be spending nearly £40 a day on keeping kids entertained over the festive break.

By Sarah Adie

The middle classes may be increasingly at risk of debt in the coming year as a new report has highlighted that they face a decline in their ability to spend.

A study by PricewaterhouseCoopers (PwC) revealed that households with an income of approximately 30,000 will experience a 2.4 per cent drop in their disposable salary after mortgages, food and taxes are paid for, suggesting that they may be more susceptible to debt as a result.

The survey noted that this will occur because interest rates on mortgages and petrol costs are expected to increase in 2010, while rising VAT and national insurance taxes have affected pockets already.

Spokesman for the Conservative Treasury Philip Hammond noted that Gordon Brown’s "debt crisis" has presented "hard-working families with a huge bill" that will be being paid off "for years to come".

PwC’s figures follow a statement from moneysupermarket.com’s head of loans Tim Moss, who recently noted that the recession is the sole cause for debt issues among the middle classes and higher earners, as people are still borrowing money.

By Sarah Adie

The poorest and the most vulnerable people are unlikely to be helped by the introduction of smart meters, it has been claimed.

According to the director of communications at National Energy Action (NEA), Maria Wardrobe, those who stand to benefit from the government proposals to install such tools in every house by the year 2020 will be "energy suppliers and more affluent customers".

She went on to note that NEA is concerned that by providing extra information regarding fuel to consumers, its "unaffordable cost" will be emphasised, leading to poorer households "turning their heating down or even off during spells of cold weather".

Ms Wardrobe further commented that vulnerable families, who may be more concerned with debt issues, are already very sparing in terms of energy consumption.

Her comments follow a statement from the Department of Energy and Climate Change, which put forward the idea that smart energy use will help people save money and cut carbon emissions, while making use of electricity more efficient.

By Sarah Adie

Those in debt and others who need assistance in managing their money in the east of England have been offered the chance to further their financial skills, following a funding boost from the East of England Development Agency (EEDA).

Led by Citizens Advice and supported the European Social Fund programme implemented by the EEDA, it is particularly directed towards those who are unemployed.

And those working under the initiative will also assist with creating budgets and showing people where to go for help with debt.

It was launched officially on December 4th and board member and deputy chair for the EEDA Sheila Childerhouse noted that learning these skills and attitudes towards money management are essential, especially in the current economic climate.

"This project will develop the financial capability skills of vulnerable people in the region," she said.

The scheme comes after the director general of the Buildings Societies Association, Adrian Coles, recently commented that more should be done to help those worst affected by the recession.

He called on the government to offer "more effective" assistance to those in mortgage arrears.

By Sarah Adie

The National Debtline, which is based in Birmingham and receives approximately 1,600 calls every day, has been applauded by housing minister John Healey for its actions during the recession that helped debtors steer clear of repossessions.

Mr Healey noted that the business is a "key part" of the support initiatives launched by the government to assist people at risk of losing their homes and which have helped more than 330,000 Britons since April 2008.

Paul Mullins, chief executive of National Debtline, remarked that Christmas 2009 is expected to be the "busiest on record" and that for many, living with debt "can be a terrifying experience".

And Mr Healey, who heard a selection of the phone calls taken by the body, said: "I would urge anyone facing mortgage difficulties not to stick their head in the sand."

This comes after Chris Tapp of money education charity Credit Action recently observed that debt is a growing concern among UK adults and is worrying even those who have not yet lost their jobs and who are not in financial difficulty.

By Sarah Adie

Financial institutions appear to be growing used to the effects that the recession has had on the banking industry, with lending rates increasing in the last eight months, new figures have suggested.

Short-term deals seem to be the most attractive, with the majority of the total number of residential mortgages on the market - 1,624 - being two-year fixed rate products, according to Moneyfacts.co.uk.

Spokesperson for the company Michelle Slade noted that this preference may stem from the fact that "changes can be made relatively quickly" should the market conditions alter.

However, she went on to observe that debtors may be hindered by "this short-term view", which could be more costly if lenders "maintain the increased margins they have placed on mortgage deals".

Ms Slade’s comments come after recent findings from the British Bankers’ Association revealed that the number of loan approvals for homeowner purchases has climbed back to the levels registered at the end of 2007.

By Sarah Adie

Following recent behaviour by credit card firms, such as First Direct and Egg, that saw rates raised at the start of the Christmas shopping season, the Sunday Times has offered debtors a set of suggestions as to how to optimise their plastic at this time.

First of all, Britons were advised to ensure their credit reference files are up-to-date so as to increase their chances of receiving a good rate, or having applications accepted at all.

And keeping separate cards was suggested as a good idea, particularly for those wishing to take advantage of balance transfer services while benefiting from zero per cent on purchases.

In addition, opting for a card provider that offers loyalty and reward schemes was recommended as points are collected that can then later be exchanged for goods or other deals.

However, those considering taking out credit cards to fund Christmas may like to exercise caution, as This is Money’s Simon Moon recently observed that it can take years to pay off debt accrued on a card, if just the minimum monthly repayment is met.

By Sarah Adie