View more on these topics

Apathy and ignorance fuel rising debt

It appears the message that 1.4 million home owners must remortgage this year to avoid huge repayment hikes as their fixed rate deals come to an end is not getting through.

The problem is such that the Financial Services Authority has embarked on a £2m advertising campaign to encourage clients coming off fixes to switch.

An FSA survey has also found that one in five mortgage holders are worried about meeting their repayments in the next 12 months. Nevertheless, a quarter say they have no plans in place to ease the pain of rising bills.

So who’s to blame for this lack of consumer awareness? Certainly not brokers, whose job it is to ensure borrowers get the best deals and no doubt will be chomping at the bit to generate business.

It’s not lenders’ fault either, given that many are highlighting the need to switch. And it’s not the media’s fault because we’ve been drilling the message home too.

To us, remortgaging seems like the obvious solution but we are all involved in the industry so it’s easy for us to grasp the consequences of failing to switch.

We also know how the market works so speaking to brokers does not seem as daunting as it might do to the famous man on the Clapham omnibus.

It comes down to a mixture of apathy and ignorance on the public’s part. This boils down to a fundamental failure on the part of successive governments to include personal finance on the school curriculum so that everyone learns how to manage their finances at an early age.

It’s amazing that general studies lessons in-clude such supposedly vital activities as wine tasting. Why not some fundamental life skills to help prevent the misery of debt instead?

I only learnt the importance of managing my finances after working at Lloyds TSB’s credit card call centre as a student. I witnessed the struggles of those who owed thousands and had little chance of paying off their debts. They were not helped by anything they’d learnt at school.

What hope is there while the government allows this ignorance to continue? There’s still a lack of att-ention to the root causes of debt despite renewed attempts by leading financial figures and consumer campaigns to ensure schools offer financial education.

The Treasury says that up to 750,000 Britons will soon get access to free guidance on financial matters including managing debt, planning for retirement and saving for mortgage deposits. But what about tackling the root of the problem first?

This week, chancellor Alistair Darling will deliver his first Budget in the midst of a spiralling debt crisis and rising repossessions. Now’s the time to start tackling the mess before things get worse.


First Time Buyer Mortgages

Some interesting research by Abbey has shown that “British parents have collectively forked out more than £27 billion to help their children buy first homes” which averages out at £5,874. Also around 1 in 16 borrow money from parents with an average loan of just under £20,000.With the demise of the higher Loan-To-Value mortgages, RBS […]

BUDGET 2008: Chancellor increases small firms loan

The chancellor has pledged to inject £60m into the Small Firms Loan GuaranteeHe says he will also roll out the scheme, which aims to provide small firms with funding support to execute viable business plans, to all small and medium businesses.

Landlords Beware

I read an entertaining article over the weekend, unfortunately cannot remember where, about the risks that landlords face when they do not keep a proper track of what is happening with their properties.The best story I heard was a landlord who had some student lets. At the end of the year he walked into one […]

Enterprise to launch site range

Enterprise Group has announced it will launch a suite of websites. Enterprise Finance, its secured, bridging and commercial arm, launched a website last week and websites for its Partners, Homeloans and Broker Services businesses are due shortly.

hastings logo

Case study – employee engagement platform centralises benefits for higher uptake

Learn how Hastings Academies Trust adopted an employee engagement platform to reinforce unity among new and veteran employees with bespoke branding and segmentation technology. Download the free case study to learn how you too can: Strategically use branding to unite a spread out workforce and reinforce key values among staff Target your message to the […]


News and expert analysis straight to your inbox

Sign up