Abacus Daily Debt News

Increased rents have led to a rise in tenant arrears, according to a new study.

LSL Property Services said the number of tenants in "severe arrears" has risen by 18 per cent in the past year, to the highest level since 2008, based on data from the Tenant Arrears Tracker by Templeton LPA, with 11,400 more renters behind by two months or more than a year ago.

It means there are now 78,970 tenants who are seriously behind with rent, although only 90.3 per cent of payments were late in November this year.

And landlords are increasingly taking a hard line in such situations, with evictions up 11 per cent.

Paul Jardine, director and receiver at Templeton LPA, said a "two-speed" market has appeared, with most tenants coping well with higher living costs, but an increasing group failing to keep up.

One reason some may find paying the rent harder is the fall in real incomes.

Although inflation has eased recently, so have pay awards, with the Office for National Statistics revealing the median pay award (discounting bonuses) in the three months to October was two per cent, down from 2.3 per cent in September.

By James Francis
 

Large credit card debts are being built up by prospective parents who are desperate to have children.

Women who have turned to IVF in a bid to conceive are faced with unfair charges for the procedure, leading many to turn to loans and other credit.

The Daily Mail revealed the exclusive results of a study that showed a quarter of people who cannot become pregnant in a natural way are instead using high-interest loans and credit cards to pay for IVF.

Lord Winston, one of the UK's top fertility doctors, said clinics are "exploiting" ladies who would love to become mothers.

Some also feel unfairly treated by the fact IVF is a "postcode lottery", with people in some areas receiving the treatment for free while others must break the bank to fund their potential conception.

It was, however, recently announced by the BBA that Britons are generally focusing on the repayment of loans rather than applying for new credit.

By Amy White
 

Those deep in debt may find an individual voluntary arrangement (IVA) protects them from extreme stress and its possible consequences, something that can arise from people being pursued over what they owe.

One example of the impact such debts can have has emerged in a court case in Northern Ireland, where a man who took out a £9,000 loan suffered a nervous breakdown after the sub-prime loan company he owed the cash to sought to repossess his home, the BBC reports.

He found himself in trouble when he lost his job in 2009, leaving him unable to keep up repayments.

The judge at Belfast's High Court granted the repossession order but suspended it on provision that the debtor pays back the company over a period of 20 years.

Under the terms of an IVA, repayments will be reduced and the period over which they will be paid is not longer than five years.

The impact of rising unemployment on the capacity to pay back debt may cause many to get into trouble.

According to a Trades Union Congress study, there are 279,000 people who are set to spend a second successive Christmas out of work.

By James Francis
 

The UK economy grew more than originally thought in the third quarter of this year, it has been revealed.

Initial estimates by the Office for National Statistics put the expansion of gross domestic product at 0.5 per cent, but this has now been revised upwards to 0.6 per cent.

Services saw the strongest growth - up 0.7 per cent - while manufacturing was weakest on 0.1 per cent, while production industry output rose by 0.2 per cent and construction by 0.3 per cent.

However, this has not stopped a growth in unemployment in recent months, which may have left many needing debt help after losing the means to pay off their loans and credit card bills.

And with the eurozone crisis threatening to drag Britain back into recession, the situation may get worse in the next few months.

Earlier this week, the Trades Union Congress produced a study indicating that 279,000 people are set to spend their second successive Christmas on the dole.

By Joe White

A second successive Christmas spent on jobseekers allowance looms for 279,000 people, the Trades Union Congress (TUC) has said.

Research by the TUC of official figures has indicated 35,000 more people will be spending a second successive festive season on the dole, with this number having risen from 243,000 last year and from 122,000 in 2007.

Such a situation could leave some needing debt help, as they have lost the income that would be used to pay off loans and credit card debts.

TUC general secretary Brendan Barber said: "As people gear up for the festive break, there won't be much cheer for the quarter of a million people who are spending their second successive Christmas on the dole."

As well as rising unemployment - now at 2.64 million - those in work are being squeezed by falling pay rates, which may reduce the benefits of a drop in inflation.

The Office for National Statistics revealed settlements for total pay excluding bonuses rose by two per cent in October, down from 2.3 per cent in September.

By Amy White

People who are struggling with financial constraints such as credit card debt could ease the pressure by seeking to supplement their income.

According to research commissioned by the Bank of England (BoE), many of those who are suffering from an "income squeeze" at the moment are looking to boost their financial position by getting a new job.

The study, which was undertaken by NMG Consulting, also showed that some are choosing to put in more hours at their current place of employment.

"Most households have experienced an income squeeze over the past year," the BoE commented.

"And around half [have] been affected by - and had responded to - the fiscal consolidation."

However, the BoE noted that its policy of keeping interest rates at a record low of 0.5 per cent has helped to mitigate the spread of the problem.

This comes after the Office for National Statistics revealed that total pay including bonuses rose by two per cent in the three months to October, compared with 2.3 per cent in the three months to September.

Inflation expectations for the year ahead have eased slightly but remain high, suggesting debt management could be required by people who find their incomes squeezed.

The survey from the Bank of England and GfK NOP revealed that median expectations of the rate of inflation over the coming year were 4.1 per cent last month, compared with 4.2 per cent in August.

Attitudes to inflation in the longer term appeared unchanged, with respondents giving a median answer of 3.5 per cent when asked to predict the inflation rate in five years' time.

The survey also found that 39 per cent of respondents expect rates to rise over the next 12 months, compared with 38 per cent in August.

Debt management help could be needed by some Britons if their salaries are squeezed by inflation in 2012, with 28 per cent of respondents saying it would be best for them if rates went down.

The Bank of England's next Inflation Report, which presents an assessment of inflation prospects for the next two years, is due for publication in February 2012.

By James Francis
 

The Office of Fair Trading (OFT) has announced the launch of a new market study into motor insurance, which could be good news for people left with debt worries by the cost of running a car.

Evidence collected by the body indicates that UK insurance premiums increased by about 12 per cent between 2009 and 2010, with a further nine per cent rise recorded in the first three months of 2011.

According to the OFT, the study will look particularly closely at the provision of third-party vehicle repairs and credit hire replacement vehicles to claimants.

This is an area where the organisation believes features of the market are currently restricting and distorting competition.

"We suspect companies may be competing to extract money from each other rather than keeping premiums as low as possible and providing car owners with value for money," said Sonya Branch, senior director of services, infrastructure and public markets at the OFT.

The Consumer Prices Index inflation rate fell to 4.8 per cent in November 2011, it was revealed yesterday, but this left the rise in the cost of living still at over twice the government's target rate, maintaining the pressure on indebted consumers.

Those struggling with debt may find they are not helped by another fall in pay rates.

Figures published by the Office for National Statistics (ONS) today (December 14th) have indicated total pay including bonuses rose by two per cent in the three months to October, compared to 2.3 per cent in the three months to September.

The rate excluding bonuses was 1.8 per cent - up 0.1 per cent on September, but these figures still represent a fall in income in real terms compared with a year before, as they are well below inflation.

And while inflation has fallen in recent months, any reduction in the rate of income could erode or cancel out the advantage consumers gain, ensuring they continue to get worse off in real terms.

The news comes a day after the official Consumer Prices Index rate was revealed to have dipped from five per cent in October to 4.8 per cent in November.

By Joe White
 

Debt problems may be on the horizon for many consumers in the new year, after research from the Co-operative Banking Group found that only 42 per cent saved enough to fund the festive season.

According to the lender, men tend to put away more than women for Christmas, with averages of £460 and £400 respectively.

No statistics were provided on how these savings were accumulated, although it may be likely that for those who will have to borrow money, credit card debt will follow.

However, it was discovered that those in the north-east, Northern Ireland and London were the most successful at keeping cash to one side for the holidays.

The head of savings at the Co-Operative Bank Zach Hocking emphasised how expensive Christmas can be.

"We would encourage and help everyone get into the habit of saving every month, whatever that amount might be," he added.

The research follows a similar survey published earlier this week by Citizens Advice and Barclaycard.

It said a third of consumers struggled with household bills last January due to blowing the budget over the festive period.

By James Francis