Abacus Daily Debt News

Young people need to receive financial education to help prevent them from struggling with debt in later life, it has been suggested.

Wendy van den Hende, chief executive for the Personal Finance Education Group, said the measure is necessary as individuals have to face up to money matters at an early age.

The industry expert commented: "What young people now have [to do] is make quite complicated decisions as they're leaving school, which will have an effect on their finances for decades to come."

She observed individuals at this age are bombarded with numerous temptations - such as overdrafts and credit cards - to get them spending money.

These decisions are on top of ones they already have to make, such as whether or not to go into higher education, Ms van den Hende added.

Her comments follow a recent survey carried out by Halifax that found children are becoming increasingly interested in taking charge of their own money matters.

By James Francis
 

People looking to obtain a mortgage but not have the loan exacerbate their debt fears should research the product before committing to it, it has been suggested.

Darren Cook, head of press and public relations at Moneyfacts.co.uk, advised property buyers to work out the true cost of a mortgage deal rather than relying on the headline rate.

The industry expert recommended: "Calculate exactly how much it is going to cost with fees as well as rate over the term of the mortgage to see which is the better deal."

He noted individuals should make sure they do the sums on both the rates side and the fees part of the agreement in order to attain the best deal.

His comments come after research from moneysupermarket.com found people who only look at the headline rate may be forking out around £3,000 more for their mortgage when borrowing £150,000 on a two-year fixed-rate option.

By James Francis
 

Damage caused to homes by extreme weather can result in increased debt concerns for some, it has been suggested.

Malcolm Tarling, media relations officer for the Association of British Insurers highlighted the point as the temperature begins to drop and claimed such destruction can have more financial implications than burglary.

The industry figure observed: "Weather is much more difficult to predict and the consequences ultimately can be much more devastating and affect a greater number of people."

Such an event could have a knock-on effect for the insurance, the insurers and the customers, he explained.

Mr Tarling added flood risk poses a particular problem and noted around five million properties in the UK are deemed vulnerable to torrential downpours at the moment.

His comments follow a recent survey conducted by Lloyds TSB that revealed one-in-eight people in Britain have experienced weather damage to their property, with the impact resulting in more than £1 billion worth of destruction.

By Amy White
 

Consumers in the UK need to adopt a lower level of spending if they are to avoid debt trouble in the future, it has been suggested.

Annie Shaw, editor of CashQuestions.com, said people have to part with less money than they did prior to the recession.

The industry expert claimed recent times have witnessed a jump in the amount of individuals seriously concerned with debt and observed the country still remains in a repressed economic state.

"We can't just go out and book a holiday, buy a new sofa, or redecorate the kitchen, but people haven't really adjusted to that," she explained.

Ms Shaw added trying to maintain the same standard of living as experienced before the economic downturn is not a sensible approach to take.

Recent research carried out by R3 revealed four-in-ten British adults - which equates to almost 19 million people - are worried about their personal debt.

By Amy White
 

An automatic system of enrolment for a pension scheme could help reduce the likelihood of future retirees struggling with debt, it has been suggested.

John Hannett, general secretary of the Union of Shop, Distributive and Allied Workers, said the measure is vital to ensure those coming to the end of their working lives have adequate provision for retirement.

The industry expert noted: "The reality now is that there is [a] need for that enrolment to take place and for employers to contribute."

If the procedure is not implemented it could have a "big impact" on people's financial stability in years to come, he observed.

Mr Hannett added it is increasingly important employees understand the necessity of planning for life after work.

Recent figures from the Department of Work and Pensions showed a record number of people in the UK - more than 800,000 of them - will be turning 65 when the country hosts the Olympics in 2012.

By Amy White
 

People in the UK need to take greater responsibility of their finances to prevent them experiencing debt problems in retirement, it has been suggested.

Alison-Jane Bailey, head of policy and technical development at the Pensions Advisory Service, said individuals need to start giving more thought regarding their monetary situation when they finish working.

The industry figure warned Britain is facing a pensions crisis and increased life expectancy is adding to the financial strain people experience in post-working life.

She remarked: "We all need to save more and take greater personal responsibility for providing for our income in retirement. The state pension will not be enough to live on."

The workers-to-pensioners ratio is currently markedly low, meaning fewer people are paying National Insurance contributions, Ms Bailey added.

Recent research published by Aviva in conjunction with Deloitte revealed the UK has the widest individual pensions gap in Europe, with the nation's shortfall amounting to £318 billion.

By Amy White
 

An increasing reliance on overdraft facilities is increasing the debt risk for people in Britain, it has been suggested.

Jasmine Birtles, founder of moneymagpie.com, claimed too many individuals view the account features as a way of gaining free money.

The industry expert noted people are not aware of the charges incurred by remaining in the red.

"Most overdraft's aren't free and not only should we not be living off our overdraft, but we should be comfortably in the black at any given time with savings," she remarked.

Ms Birtles warned many individuals do not check their bank accounts and are therefore being charged for things they are not aware of and losing significant amounts of cash as a result.

Research recently carried out by groupola.com revealed 78 per cent of Brits have an agreed overdraft.

Of these, the study found 18 per cent admit to constantly being in the red.

By Amy White
 

The amount of Brits falling into personal insolvency is set to rise in the near future, consumers have been warned.

Richard Talbot, director of Credit Action, said personal debt is slowly escalating as individuals are failing to balance their spending and income.

The industry expert noted: "People need to live within their means and that probably means belt-tightening for quite a lot of people."

He observed Britain does not have a strong savings culture and predicted personal insolvencies will increase slightly in the next 12 months to two years.

The fact consumers are increasingly unable to put money aside is pushing them towards debt and is why there has been such a swell in payday lending and pawn brokers, Mr Talbot added.

His comments come after a press release from R3 revealed cash runs out for many workers in Britain before their next pay cheque, with 42 per cent failing to stretch their funds across the full month.

By James Francis
 

Hikes in home phone rates could worsen the debt troubles of many UK residents.

Independent price comparison and switching service uSwitch.com has warned two of the biggest providers in Britain are to increase their prices for winter and advised customers to shop around for the best deals.

BT and Talk Talk are to raise their home phone line rental on October 1st and the website warned this could be the second such hike in a year for some people.

The portal noted consumers will now have to look beyond household name companies when searching for the cheapest provider.

Ernest Doku, communications expert at uSwitch.com, said: "In a year of pay freezes and spending cuts, customers will find these increases particularly hard to take."

A recent study carried out by Churchill warned people could face hefty repair bills for their property after it discovered many individuals fail to adequately maintain their homes.

By James Francis
 

People who are over the age of 65 and not planning their financial future could face debt worries in the future, new research has suggested.

The new international healthcare survey from Bupa has revealed an increasing number of individuals have not adequately considered their monetary situation as they reach their 70s and 80s.

It found just 22 per cent of over-65s have put money aside for retirement, while 66 per cent of those questioned said they assume their families will endeavour to help them out.

Dr Sneh Khemka, medical director of Bupa International, warned people must not become complacent in old age.

The expert added individuals need to start thinking about who will care for them in the future.

Prudential's latest Retirement Shock study indicated many women could face financial trouble by relying too heavily on their partner's pension as their main source of income when they end their working life.

By Amy White