Abacus Daily Debt News

Individuals need to better understand finance if they are to manage their cash more efficiently and avoid future debt troubles, it has been suggested.

Zoe Stevens, a spokeswoman for Confused.com, made the claim in response to new statistics from Equifax.

The study revealed 94 per cent of parents believe financial education should be a part of the national curriculum, while 35 per cent admitted their children do not have a firm enough understanding of the value of money.

Ms Stevens stated: "It’s important that people understand finance to aid in their ability to manage their finances well."

She added such learning needs to start at a young age to ensure adolescents make better sense of what can seem like complicated financial products.

Equifax has pledged its backing to calls for greater financial education in learning institutes in support of My Money Week, which is running from June 28th to July 2nd.

By Joe Shervin

More and more vulnerable people will find themselves in debt and struggling for somewhere to live as a result of the Budget, an expert has claimed.

Director of policy at Citizens Advice Teresa Perchard noted individuals with larger families may also be forced to move into poorer quality housing.

"[The] Budget [is] very much a missed opportunity. Households on the lowest incomes, including many in low-paid work will be worse off, despite today’s announcements," she added.

According to the specialist, the measures introduced are off target as many consumers will not be able to take any real gains from the fiscal plan, such as parents who are working but are earning less than £10,000 a year.

Last week, a study carried out by R3 found 44 per cent of those struggling with debts have yet to seek advice, with many of them deeming their problems to be not serious enough yet.

Posted by Rory Mallon

Individuals could still face debt worries after one expert claimed the chances of the UK going into depression have increased recently.

Michael Baxter, editor of Investment and Business News and co-author of Bubbles and Wisdom, noted the country is failing to deal with the issue of the "debt crisis" that developed from the recession.

"The problem with the world and the global economy is that we have got a savings crisis," he added.

Mr Baxter remarked he is not "convinced" troubles that have already occurred may not return.

He observed action needs to be taken to tackle the "savings glut", something he thinks the new government has yet to address.

The specialist was speaking after George Osborne revealed plans to reform the financial sector after the crisis that ensued.

A new Financial Policy Committee will be established at the Bank of England, which will look at issues that may threaten stability and address the risks it identifies.

Posted by Rory Mallon

Utility bills may become easier to manage after OVO announced it would offer monthly interest on credit balances.

The news was welcomed by Emma Bush, energy expert at uSwitch.com, who believes the ’save as you burn’ scheme will encourage consumers to pay by direct debit, which could make it easier for them to keep track of what they are paying.

She said: "The interest rate being offered looks fair and certainly far better than most consumers would get if the money was sitting in their current account."

Ms Bush also highlighted the benefits of being able to balance the cost of fuel evenly throughout the year, meaning it won’t put such a strain on finances during the winter when bills are usually higher.

Consumers were recently warned by Confused.com about door-to-door salesmen offering gas and electricity deals.

The price comparison website found that in fact such offers could cost customers up to £180 more than if they shopped around online.

By James Perkins

Debt could be more of a worry for women when they finish working as many will be surviving on an income below the poverty line.

Research from Prudential shows over a third of females planning to retire this year will have to live on less than £14,000, compared to 29 per cent of men.

The Joseph Rowntree Foundation suggests an income £13,900 before tax is the minimum amount required to afford an acceptable standard of living.

Vince Smith-Hughes, head of business development for pensions at the company, believes career breaks taken by women to raise their children is one of the reasons for the results.

He said: "As these figures clearly demonstrate those years out of work do have an impact."

The report estimates the average pension for women to be £12,169, whereas for men the figure is £19,593.

Parents seem to be aware of the dangers of not having enough money to retire on and many are encouraging their children to save into a pension scheme, according to Aviva.

Debt worries could be causing 54 per cent of consumers to cut back on their retail spending before next week’s emergency Budget.

A survey from uSwitch.com shows many households are worried of the impact the Budget may have on their finances and so are reducing their spending.

The biggest fear is a rise in VAT and as a result a third of people are to hold back on large projects such as DIY, which could put them further into debt.

Eight out of ten people were found to be changing their spending habits ahead of chancellor George Osborne’s announcement and luxuries will be the first thing to be sacrificed by 59 per cent of consumers.

Customers are also looking to cut costs by looking for cheaper alternatives and a quarter of people are aiming to reduce their food bills.

Financial planning is getting increasingly difficult for young people as they have to avoid the temptation to spend, according to Wendy van den Hende, chief executive of the Personal Finance Education Group.

By James Perkins

Those struggling to pay for a holiday could find the cost of their trip reduced as roaming mobile phone charges have been slashed.

From July 1st the rates will be cut by up to 70 per cent making it cheaper to keep in touch with family and friends while away.

Matthew Wheeler, communications expert at uSwitch.com, said: "This is fantastic news for everyone about to jet off this summer."

However, he still warned consumers to take care when using mobiles on holiday and urged them to do the necessary research to ensure they are not spending more than they need to.

Mr Wheeler suggested keeping costs to a minimum by turning the voicemail function off and resisting the temptation to use mobile internet abroad as both could be expensive.

A holiday is an important part of most people’s year and a Lonely Planet survey shows over a third of Brits are willing to go into debt to fund a week away.

By James Perkins

Financial planning is becoming much harder for the younger generation as they have to save more and resist the temptation to spend, according to one expert.

Wendy van den Hende, chief executive of the Personal Finance Education Group, believes the increasing cost of buying a house and having to plan for the future is making it "harder and harder to be young".

She added: "Young people are going to live for an awfully long time and they are going to need to plan very carefully."

Ms van den Hende suggested the recession is making young adults more aware of the importance of planning their finance for the future.

It followed research from Santander, which showed for the first time younger savers are putting more away than the older generation.

The average put aside by 18 to 34-year-olds is £134 a month, compared to £112 by the 35 to 44 age range.

However, 19 million Brits are not saving anything at the moment, with one in four people admitting to having no money stored away.

By James Perkins

Debt worries could increase if parents ‘front’ the car insurance of their children, as the policy might become invalid.

A number of young adults put their parents as the main name on their insurance documents in a bid to save money, but the Motor Insurers’ Bureau (MIB) warned this could be a costly mistake.

The report estimates a third of people wrongly assume that they will still be covered if a name other than the main driver is put first on the policy, however if this is proven the firms do not have to pay out for any damages.

Ashton West, chief executive of the MIB, said: "If the driver of a fronted policy is involved in an accident, both the policyholder and the driver could be open to additional costs, penalties, fines and - potentially - prosecution."

Figures from The Co-operative Insurance show as many as 41 per cent of parents are putting their names on the documents, even though they know it is against the law.

By James Perkins