Abacus Daily Debt News

Possible tax hikes may result in more people struggling to keep on top of their finances and falling into debt.

New research by unbiased.co.uk has revealed that 31 per cent of consumers fear there will be substantial tax increases once a new government is in power.

The study has been brought out before Tax Freedom Day on May 30th but it found many Britons believe this period to be bittersweet as they are predicting levies will swell after the election.

Chief executive of unbiased.co.uk Karen Barrett commented: "This year’s Tax Freedom Day could be viewed as misleading - as it is only based on tax receipts and doesn’t take into account the government’s budget deficit."

She added that people need to strive to reduce their tax waste to offset the likely tax increases.

Rhiannon Davies, co-founder of Shelter Offshore, recently noted that self-employed workers in Britain are being taxed excessively when compared with those working abroad.

By Joe Shervin

Individuals who are self-employed have been advised not to mix business with personal finances as this could lead to money difficulties.

The Consumer Credit Counselling Service has expressed concerns about the financial welfare of those who choose to work for themselves.

A spokesman for the organisation suggested a number of disparities can crop up when people fail to keep their personal and employment financial affairs apart.

He warned that individuals may take out loans and credit cards for business purposes but then use the same bank account for transactions regarding both corporate and home life.

"This means that problems in one area can then spill into the other more easily," the industry expert said.

He added that those considering self-employment need to be wary of the dangers in combining their personal and work monetary dealings.

A recent Kensington Mortgages survey disclosed that there are currently around five million people working for themselves in the UK.

By Joe Shervin

Avoiding store cards could be a good idea for those not wishing to encounter financial difficulties, it has been claimed.

Martin Bamford, chartered financial planner and managing director at Informed Choice, has advised people against the payment option, as it means they are spending money they do not have.

The specialist was speaking in response to a survey conducted by MyVoucherCodes.co.uk that revealed 42 per cent of individuals felt pressured into signing up for a store card.

"[If] you are unable to pay off the balance in full by the end of the month, then think carefully before accumulating more expensive debt," he warned.

Mr Bamford added that shoppers are much more likely to receive a more favourable rate of interest from a credit card rather than a store card.

The study carried out by MyVoucherCodes.co.uk revealed more than a third of the 1,659 individuals questioned admitted to having a store card.

A predicted growth in house prices in 2010 could result in people experiencing financial difficulty.

Ben Wilkie, editor at What Mortgage, has claimed the UK housing market is likely to see a sustained period of increases.

The industry expert stated, however, that much depends on the policies that are introduced after the general election, as many factors could influence the sector.

Mr Wilkes explained that the market could contract "if there are heavy cuts and lots of people end up losing their jobs or heavy tax rises meaning a lot of people have less disposable income".

The forecast by the centre for economics and business research (cebr) that mortgage rates will fall until next year is optimistic but possible, he added.

On May 3rd, the cebr announced that house prices are expected to swell by 3.4 per cent in 2011, by nine per cent in 2012 and by four per cent in 2013.

By Joe Shervin

People who have taken out a balance transfer card to consolidate their arrears have been advised to move their debt to avoid paying more in interest.

Moneysupermarket.com warned individuals who took the option at the beginning of last year that this amount could swell into thousands of pounds if they do not check when their zero per cent deal expires.

The organisation claimed that the average balance transfer period of this kind in January 2009 was 14.6 months, meaning many who opted for the cards could be approaching the end of the deal.

It warned those who do not make a switch that the balance will revert to the card’s standard typical APR.

However, Kevin Mountford, head of banking at the website, added: "We would always advise consumers that they really need to make some headway in paying off the balance."

Moneysupermarket.com recently released figures that suggested those who miss a credit card repayment could suffer in the long term because of the interest that can be accrued.

By Joe Shervin

People in relationships could be staying financially independent in an attempt to avoid money concerns.

New research conducted by Tesco Bank has found that almost a third of couples are choosing not to merge their finances with one another.

The study discovered it can take around two years before partners decide to open a joint account.

Of those who do make the connection, 56 per cent still wish to maintain some degree of financial separation and do not combine all of their resources.

A spokesperson from the organisation stated: "Despite sharing so many elements of our life when in a relationship, most of us still try to retain a modicum of financial independence."

The survey showed individuals from Leeds, Newcastle and Portsmouth are the most likely to join financial forces.

Research recently carried out by LifeSearch disclosed that young people appear to be unconcerned about taking out forms of monetary protection, such as life cover.

By Joe Shervin