Abacus Daily Debt News

Concern has been raised over how much regulation of overdraft debt is being imposed on banks, as a new authority takes over the role of keeping financial institutions in line.

Consumer group Which? has said a key issue is that unauthorised overdraft charges are too complicated for people to be able to compare between those implemented by different banks.

It noted that its sample group - including a maths PHD student - were only able to correctly calculate the figure on seven out of 48 occasions when presented with bank statements.

Launching its "Watchdog not Lapdog" campaign, Which? called for the new Financial Conduct Authority to crack down on banks and rule against such complexity.

Which? Chairman Peter Vicary-Smith said the government has so far failed in its pledge to tackle this issue, commenting: "It's extremely disappointing to find that bank charges are still too high, too complex and impossible to compare."

Responding to the call by Which?, the British Bankers Association argued that most consumers do not go into unauthorised overdrafts anyway, adding that its members allow more buffer zones at the limits of overdrafts and often contact customers when the balance is close to the line.

By Amy White

Those with credit card debt may find they need extra help if they are unable to switch to a cheaper account.

With large balances having been built up by many ahead of Christmas, January is a time when a lot of consumers will seek to get their debts under control and MoneySupermarket.com has sated that those who switch to a zero per cent card can save hundreds of pounds.

Head of loans and debt at the site Tim Moss said: "Moving onto a zero per cent interest product is a no brainer - it allows you to pay off your existing balance over time without accruing additional interest."

However, some who are in debt may find they are turned down for a card, not least if they have missed payments on their existing account and have thus harmed their credit rating.

In such instances, struggling consumers may find a debt management plan is the best way forward - or even an individual voluntary arrangement if the debt is over £15,000 and unmanageable.

According to Credit Action's latest figures, total UK personal debt stood at £1.451 trillion at the end of November 2011.

By James Francis

Citizens Advice has welcomed news that EDF Energy is cutting its gas tariffs, but has noted many people are still in fuel debt as they struggle to keep up with rising bills.

Commenting on the situation, the charity's chef executive Gillian Guy said: "Hopefully EDF's move will kick-start a price cutting trend among energy companies."

She added that Citizens Advice will be holding seminar's on the subject of fuel debt to coincide with Big Energy Week (January 16th to 21st), including a seminar in London attended by energy secretary Chris Huhne.

During the week there will also be events in Cardiff - with Welsh Assembly minister for energy John Griffiths present - and Edinburgh.

The difficulty in meeting fuel bills has grown due to average hikes of 14 per cent last year and Confused.com's energy analyst Lisa Greenfield said that in view of this, EDF's cut "might not seem significant enough to their customers".

By Joe White
 

Consumers struggling with their debt may find a bit of financial relief is on the way as EDF Energy announced it is to trim its gas prices by five per cent from February 7th.

The move follows the recent announcements by Co-operative Energy and OVO Energy of price cuts due to falls in wholesale prices, with this being the first move by one of the big six providers.

And EDF noted that this comes after it was the last of the six to announce a large increase last year.

The news was welcomed by price comparison sites, with site editor at MoneySupermarket.com Clare Francis calling it a "welcome boost" for consumers.

But uSwitch director of consumer policy Ann Robinson said there is no cause for rejoicing just yet.

"Look through the fizz and the bubbles and we're left with the cold reality that prices are still substantially higher than they were just over a year ago," she noted.

By Amy White

Debt levels may be worst for families living in inner-city areas of London, according to a new child poverty map of Britain.

This is because the Campaign to End Child Poverty - run by the Child Poverty Section Group - has published a map of the problem in the UK and the worst-hit parliamentary constituency is Bethnal Green and Bow in the east of the capital.

In this area, 51 per cent of children live in poverty and four other London seats are in the top ten.

The remainder of the list is made up by inner-city seats elsewhere, in Manchester, Liverpool, Belfast and two seats in Birmingham.

In addition to this, six of the top ten boroughs for child poverty are in London.  

Executive director of the campaign Alison Garnham noted only 89 seats meet the target for less than ten per cent child poverty - including prime minister David Cameron's Witney constituency.

Chief executive of The Family and Parenting Institute Dr Katherine Rake recently argued that families with young children are disproportionately harmed by recent tax and benefit cuts.

By James Francis
 

Employees at outdoor retailer Blacks may be among the luckier ones as a number of company insolvencies could be set to leave consumers without jobs and unable to pay off their debts.

Rival firm JD Sports has confirmed it is in talks to take over the ailing company, which has gone into administration and recently declared its shares to be effectively worthless.

Any deal could help prevent a bankruptcy that may have led to widespread job losses, but while some may be fortunate, other companies cmight be going bust or shedding staff as the economy continues to struggle and might go back into recession.

Those who do find their incomes fall due to a lost job may wish to consider a debt management plan to spread the cost of repayments more.

Last week, a BBC poll found 25 out of 27 economists predicting Europe will go into recession this year, a situation that could push the UK back into a contraction as export orders from the continent decline.

By James Francis
 

Residents of Essex who have debts may be facing more problems if they have any unpaid library fines.

The county council has employed the services of American debt collection agency Unique Management Services (UMS) to chase up unpaid fines on items that have not been returned on time.

It has taken on the firm on a three-month trial basis, noting that while it brought in £650,000 last year, this figure could have been much higher had all fines been collected.

UMS will focus on chasing up fines of over £20 in value, meaning those in debt who have very overdue items could be in trouble.

The company said it works on the "gentle nudge" system of reminding people to return overdue books and DVDs before it chases them, while those who will be chased will need to have several items overdue, since fines are capped at £4.70 each.

Essex County Council runs 73 public libraries.

By Joe White

Seeking debt help may enable some people to save their marriages, as experts have identified financial problems as a causal factor in many relationship break-ups.

Parenting and relationship journalist Kelly Rose Bradford said the economic situation is never the sole cause of such a situation, but stated: "It could be a catalyst for other issues to come to a head."

She suggested it could reflect wider issues with communication that are undermining the relationship.

Couples may find it helps if they communicate better about their finances, with one step being to establish the nature of their financial issues and seek solutions for them.

Ms Bradford noted that many married couples manage to stay together according to the vow "for richer, for poorer" as they work together to battle through any personal financial crisis.

Possible evidence that the economic downturn has caused more break-ups emerged with data from the Office for National Statistics last month, showing that the number of divorces in 2010 had risen 4.9 per cent since the previous year - the first increase since 2003.

By Amy White
 

Consumers who commute into work in major cities may be at risk of getting deeper into debt if they owe money now, as their ability to meet payments may be compromised by rising rail fares.

A study by the Hay Group has revealed that the average cost of commuting now stands at eight per cent of pay - and in some cases as much as 21 per cent.

Reward information consultant at the group Stuart McMillan said: "As train fares continue to rise above inflation and salary increases remain subdued, commuting costs are set to take up more of UK employees' pay packets."

London is the costliest city to commute to on average, at 17 per cent of income, although it is those who have a 50-minute journey to Birmingham who are on course to pay 21 per cent.

While rail fares and other costs rise, the rate of pay increase has fallen, according to the latest figures.

Official data on employment published last month showed that in the three months to the end of October pay settlements including bonuses were up by two per cent, compared with 2.3 per cent in September.

By James Francis

More people are unhappy about their finances now than they were a year ago, a new survey has found.

The poll by First Direct revealed 48 per cent of consumers were dissatisfied with their financial state in 2011, compared with 36 per cent the previous year.

Not paying off more debt was the greatest regret for over half a year ago, a concern pushed into second place by a failure to save more this time, but still the biggest worry for 33 per cent.

Other concerns included spending too much on a partner, lending to - or borrowing from - family members and paying for an expensive holiday.

However, the first and third of these concerns were an issue for only half as many people as last year, which may suggest some are budgeting more carefully than they used to.

Those whose debt problems are rising include a minority of tenants, who are failing to cope with higher rents and are falling into arrears, according to the Tenant Arrears Tracker by Templeton LPA.

It said over 78,000 people are now two months or more behind with rent, an 18 per cent rise in the past year.

By Joe White