Debt Consolidation Advice, Help and News from Debt Advisers Direct

Energy firms `not refunding overpayments automatically`

Wed, 1 Jul 2009 16:41:22 GMT

A new report by consumer group Which? has claimed that energy firms are not making automatic refunds to some customers who have overpaid, according to The Telegraph.

Which? said that some companies were keeping hundreds of pounds worth of customers` overpayments before a refund would be issued.

Overpayments can occur when customers who make fixed payments towards their bills end up using less energy than expected.

A spokesperson for Debt Advisers Direct said: "In these difficult times, it`s important that we all manage our finances well, and keeping a close eye on household bills is just one way of doing that. Claiming back overpayments can be a big boost to the finances, especially for people in debt.

"That said, having some credit on an account can be an advantage in the winter, when usage typically rises and more people find themselves falling into debt on their accounts."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Average household £7 a week richer but debt levels remain high

Wed, 1 Jul 2009 16:41:51 GMT

During May, a typical household had £164 a week left for `discretionary spending` after essential expenses, The Telegraph reports.

The research, produced by cebr (centre for economics and business research) for Asda, suggests that essential spending, such as utility bills and mortgage payments, was £3 a week lower in May than a year earlier.

An economist at cebr, Charles Davis, commented: "Spending power has increased relative to a year earlier in both April and May. However, this is not necessarily translating into increased spending on the high street - as shown by the 0.6 per cent month-on-month fall in retail sales in May.

"This is due to increased levels of precautionary saving as consumer debt levels remain high, unemployment rises and households see an uncertain economic climate ahead."

A debt specialist for Debt Advisers Direct said: "We would advise anyone with `spare` disposable income to think very carefully about the best way of using it - for example, they may choose to overpay any debts they may have. At a time like this when interest rates are low, tackling their mortgage debt could be a particularly appealing option."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Consumers `cutting back on credit card debt`

Wed, 1 Jul 2009 16:42:25 GMT

Many UK consumers are cutting back on the amount of money they spend on credit cards as the downturn continues, according to new research.

Tescocompare.com has claimed that almost half the nation`s credit card users (14.6 million, or 44%) have cut their credit card spending by just under £100 per month, on average.

Of those cutting back, 37% did so to reduce debt, while 25% wanted to increase savings, and 18% said they wanted to be less reliant on credit.

A spokesperson for Debt Advisers Direct said: "Because credit cards can carry a higher interest rate than many other forms of credit, credit card debt can prove costly if it isn`t repaid on time.

"In difficult times, it`s particularly important that people keep credit card debt to a minimum unless they are certain they can afford to repay it quickly."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Mortgage debt often greater than house value

Wed, 1 Jul 2009 16:43:28 GMT

According to the latest findings from global rating agency Fitch, almost 1 in 6 `prime` mortgages in the UK are in negative equity - where the homeowner`s mortgage debt is greater than the value of their home - The Times reports.

The report suggests that this figure could rise to around 1 in 3 over the next year if house prices continue to fall in line with the agency`s expectations.

A Director at Fitch, Ketan Thaker, commented that `although prime borrowers were unlikely to default on mortgage payments purely because they were in negative equity, it reduced the options available to those who were struggling with debt.`

A debt specialist for Debt Advisers Direct said: "Negative equity can be a real problem for some people - if they are looking to sell their property or remortgage, for example.

"However, negative equity needn`t be an immediate concern for those who don`t plan to move or remortgage, as long as they are able to keep on making their mortgage payments."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Am I eligible for an IVA?

Wed, 1 Jul 2009 16:44:8 GMT

If your debts have become unmanageable, an IVA (Individual Voluntary Arrangement) could help you to clear your debts and avoid bankruptcy. It is a legally binding agreement between you and your creditors in which you will repay an agreed percentage of your debts (based on how much you can afford), and write off the rest.

Before you can enter into an IVA, you will work with an Insolvency Practitioner (IP) to draw up an IVA proposal, detailing the proposed terms of the IVA. This will then be sent to your lenders for approval. Lenders accounting for at least 75% of your total debt must approve the terms before your IVA can go ahead.

Household energy bills `could top £4,700 a year by 2020`

Fri, 26 Jun 2009 15:57:40 GMT

Comparison site uSwitch.com has said that annual energy bills could reach £4,733 by 2020 if current price trends continue.

Since 2004, the typical yearly energy bill has more than doubled, rising from £580 to around £1,243 today, according to uSwitch.

Last year alone saw big rises in the price of gas and electricity. As a result, many customers on fixed direct debit price plans found themselves falling into debt on their accounts.

A spokesperson for Debt Advisers Direct said: "A lot of billpayers are still feeling the effects of last year`s energy price rises, and people will hope that price rises are less sharp than uSwitch has predicted.

"In the current climate, it`s important that anyone struggling to pay their bills speaks with a professional debt adviser, who could help them to clear their debts."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Many over 50s `facing financial difficulties`

Fri, 26 Jun 2009 12:12:32 GMT

A considerable number of consumers aged over 50 worry that they may be facing financial difficulties - potentially including debt problems - in their post-work years.

This is according to an Aviva Cost of Family Care study, which found that 62 per cent of such people are concerned that their pensions and savings are unlikely to be sufficient to sustain them.

The firm described consumers in this situation as "baby gloomers", pointing out that many of them face the prospect of simultaneously financing their elderly parents and their own children.

In addition, it was found that 43 per cent of people polled were delaying financial plans for their own retirement because of the current economic crisis.

"Future finances are one of the most crucial areas families need to discuss and a key area where people should seek independent financial advice," stated Paul Goodwin, head of pension propositions for UK Life at Aviva.

Recently, Jim James, north-east regional chairman of insolvency trade body R3, said that people with financial difficulties such as debt problems should seek advice as soon as possible, the Journal reported.

UK `must reduce consumer debt`

Wed, 24 Jun 2009 10:55:21 GMT

People are being more sensible with their money and are reducing their levels of personal debt, which is good for the UK, it has been claimed.

According to David Kuo, director of Fool.co.uk, people are concentrating on paying off their debts during the recession.

He said: "[Consumers] are making use of the lower interest rates to repay debt and that can be no bad thing for the UK because the only way [the country] can dig itself outside of this hole is to get consumer debt down to a more sensible level."

Mr Kuo also predicted that people will not start spending money as freely as they did prior to the recession until they witness a stabilisation in the employment market.

The expert suggested that consumers should have between six and nine months` of expenses saved up in case of an emergency as this could help them avoid falling into debt problems.

His comments came in the wake of figures produced by Ernst & Young, which suggested that the typical household disposable income for the average UK family has risen by over £200 compared with 2008.

CML lowers repossession prediction

Tue, 23 Jun 2009 11:02:29 GMT

The Council of Mortgage Lenders (CML) has lowered its prediction concerning the number of homes in the UK it expects to see repossessed this year.

Initially, the organisation had thought that around 75,000 residential properties would be repossessed. However, this figure has now been revised to 65,000.

In addition, the CML anticipates that around 360,000 mortgages will be in arrears by the end of 2009, which is equivalent to 2.5 per cent or more of the country`s mortgage balance.

The council`s forecast for gross lending remained unchanged at £145 billion for the 12-month period.

In a statement, the CML said: "The raft of measures taken by the authorities have stabilised the economy and will sow the seeds for a recovery over time, including in the housing market. But the improvement is likely to be slow and drawn out."

Recently, it was announced that the Treasury Committee is to undertake an inquiry into mortgage finance and arrears.

What will happen to my home in an IVA?

Fri, 19 Jun 2009 16:3:54 GMT

If you`re in debt, the thought of losing your home can be one of your biggest worries.

Any homeowner considering an IVA (Individual Voluntary Arrangement) or other debt solution will undoubtedly want to know what effect it would have on their property before they commit themselves to anything.

Staying out of debt with the right debt advice

Fri, 19 Jun 2009 16:5:6 GMT

In times like this, staying out of debt can be particularly difficult. Over the past two years, costs of living have been rising fast, and the recession means many people`s incomes have dropped. Most of us have been affected by the economic downturn in some way - and many will experience debt problems at some point as a result.

Higher electricity prices will pay for carbon capture

Fri, 19 Jun 2009 16:5:55 GMT

Four new `carbon capture and storage` trials will lead to an increase in electricity bills, The Telegraph reports.

Although it is too early to estimate how much the project will cost in total, Energy Secretary Ed Miliband commented that the Government hopes it could create 60,000 jobs and boost the economy by £4bn.

He also mentioned that the new carbon capture and storage trials would eventually add 2% to bills through a levy on electricity suppliers.

A spokesperson for Debt Advisers Direct said: "Many people have found it hard to keep up with rising energy prices over the past year, and a further increase could add to the difficulty of paying the bills.

"This could place a real strain on people`s finances - especially people who are already struggling with debt repayments and other financial commitments."

Given that the technology involved in transporting and burying carbon has yet to prove its worth, the Government is also creating a `contingency plan` for reducing the emissions from coal-powered plants.

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Unemployment set to rise

Fri, 19 Jun 2009 16:7:55 GMT

According to the Trades Union Congress (TUC), unemployment in Britain will continue to rise until the end of 2010.

In the last recession, the TUC points out, the gross domestic product (GDP - a measure of a country`s economic health) began to grow in autumn 1991, but it took a further 18 months for unemployment figures to fall.

TUC General Secretary, Brendan Barber, said: "Some now say that we have a recovery, but even if this is not a false dawn, as others fear, it will be years before the thousands of people who have lost their jobs or who will lose them in months to come will see anything to celebrate."

A spokesperson for Debt Advisers Direct commented: "No-one can accurately predict what lies ahead for the country, so it is important for people to do what they can to reduce their debts. If their income drops at some point in the future, they`ll be glad they`re carrying lower levels of debt."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Inflation speculation `greatly exaggerated`

Thu, 18 Jun 2009 9:26:45 GMT

Following the latest figures from the Office for National Statistics (ONS), showing a fall in the annual inflation rate to 2.2% in May, one expert has said that the talk that inflation `is dead` has been `exaggerated`.

David Kuo, director at The Motley Fool, said: "[The slower-than-expected fall in inflation] is partly a result of higher taxes imposed by the Treasury in the April Budget.

"It is naive not to expect more tax hikes or a reversal of previous tax cuts if the gaping hole in Britain`s finances is to be plugged. Therefore, talk that inflation is dead is not only greatly exaggerated but also dangerous."

Some economists have speculated that the economy may be heading towards deflation - which, in the short term, may offer some relief to many of the people struggling with debt due to rising costs of living, but which could have a negative effect on the economy in the long term.

A spokesperson for Debt Advisers Direct said: "There is still a lot of uncertainty in the economy, and people should take this as a sign of the need to protect their finances and ensure any debts are being dealt with in the right way.

"Anyone who is unsure about how to manage their debts should seek professional debt advice."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

IVA - how will my credit rating be affected?

Thu, 18 Jun 2009 14:53:0 GMT

An IVA (Individual Voluntary Arrangement) can offer an alternative route out of debt for people facing bankruptcy.

However, if you`re thinking about entering into an IVA, you might be concerned about the effect it may have on your credit rating. Here`s a look at how an IVA works, and how your credit history may be affected.

Unemployment reaches 12-year high

Thu, 18 Jun 2009 15:1:17 GMT

According to The Office for National Statistics, UK unemployment rose to 2.261 million in the three months to April, the BBC reports.

The total number of people actually in work fell by 271,000 over the three months to 29.11 million, which is the largest quarterly drop since comparable records began in 1971.

The jobless rate now stands at 7.2% - the highest since July 1997.

Ross Walker, the UK economist at RBS Financial Markets said: "It`s better than expected. It is probably still too soon to conclude that we have reached any turning point but it is moderately encouraging."

A spokesperson for Debt Advisers Direct added: "Although the latest figures are better than expected, they`re still worrying - especially for people in debt.

"People with outstanding debts have not only bills to pay and expenses to meet, but also debt repayments to make, and any loss of income could threaten their ability to do that, which could easily make a bad situation worse."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

UK recovery `to start in 2010`

Tue, 16 Jun 2009 15:27:10 GMT

The UK economy will begin a `slow and gradual` recovery in 2010, according to the Confederation of British Industry (CBI).

The CBI said that GDP (Gross Domestic Product - a measurement of economic health) will contract by 3.9% over 2009, followed by growth of 0.7% in 2010.

Mr Lambert said: "The return to growth is likely to be a slow and gradual one; difficult credit conditions are still affecting business behaviour.

"For positive growth to return, lenders need to feel more confident so that credit can start flowing again."

Over recent months, the economy has been hit by low levels of lending combined with risings costs of living and unemployment, as well as increasing numbers of people facing serious debt problems.

A spokesperson for Debt Advisers Direct said: "The recession has caused financial difficulties for a lot of people, and although economists are beginning to talk about economic growth again, many will still find paying all of their bills and debt repayments difficult.

"Anyone struggling with debt should speak to a professional debt adviser, who can help them to find the best way of tackling their debts."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

People `may be risking finances due to lack of pension savings`

Tue, 16 Jun 2009 10:42:13 GMT

A considerable number of consumers in the UK may be risking their future finances and potentially putting themselves in danger of debt problems by failing to make pension contributions.

This is according to the Lincoln Financial Group, which suggested that 12 million adults are not making sufficient pension contributions from their salary to fund their post-work years.

Nearly a quarter of people in this position (23 per cent) cited the burden of outstanding loans and debts as a reason for their failure to invest in pensions.

Simon O`Connor, head of products and marketing at Lincoln Financial Group, commented: "Clearly people`s finances are stretched at the moment. Unfortunately, this can lead some people to push pension contributions to the bottom of the priority list."

However, people should look beyond their short-term financial situations and begin to make plans for their retirement as early as possible, he added.

Last month, Age Concern and Help the Aged suggested that the recession could lead to financial problems among retirees as increasing numbers of workers are being forced to end their careers early.

Economy `may be bottoming out`

Fri, 12 Jun 2009 14:35:33 GMT

According to Andrew Sentance, a member of the Bank of England`s Monetary Policy Committee, the economy may be `bottoming out`, The Telegraph reports.

In a recent speech, Mr Sentance said, "We should be able to look forward to a recovery beginning either later this year or early 2010.

"It is encouraging that in recent months we have seen some promising signs that the recession - here in the U.K. and globally - may now be bottoming out."

A spokesperson for Debt Advisers Direct commented: "When the recovery does begin, this isn`t just something that will affect the economy as a whole - it will clearly have a direct impact on many individuals` lives.

"People with high levels of personal debt may be particularly relieved to find their income rising, as this would make it easier to stay on top of their debt repayments and other financial commitments."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Fuel poverty still putting billpayers at risk of debt

Thu, 11 Jun 2009 12:19:53 GMT

The Environment, Food and Rural Affairs select committee has urged the Government to offer more help to the millions of families currently in fuel poverty.

A report from an Environment Committee of MPs estimates that around 5 million families were in fuel poverty last winter, according to the BBC. Fuel poverty is defined as when a household spends 10% or more of its total income on gas and electricity for the home.

Fuel poverty has become an increasing problem for many billpayers over the past two years, following several sharp price rises by energy companies.

A spokesperson for Debt Advisers Direct said: "Fuel poverty remains a problem for many households. Combined with other rising costs of living, the price of fuel has meant that many people have struggled to meet all their commitments, and with that comes the risk of debt.

"We urge anyone in that situation to contact a professional debt adviser."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).