It’s no surprise that consumer debt is still a big issue, with personal borrowing having passed the 1trillion mark and continuing to grow.Recent research shows a glimmer of hope for credit card spending but a worrying trend of youngsters seeing debt as acceptable. The rate of spending on credit cards once seemed to be spiralling out of control but the Association for Payment Clearing Services says credit card spenders are becoming more savvy, with spending levels slowing. And those who are spending on their cards aren’t letting their debts fester. Almost three-quarters of all spending on credit cards is paid off within a month and for those with remaining balances, around one in five have their spending on 0% interest deals. This change has been put down to the increase in spending on debit cards. It seems people are now spending what they can afford. This is good for their future financial situation but what we mustn’t forget is that there is still a savings gap of 27bn which shows no signs of reducing. People simply don’t have savings to fall back on when disaster strikes. Proof that people are finding it increasingly hard to cope is in the record level of bankruptcies. The number of people declared bankrupt in England and Wales increased by more than a third in the second quarter of this year. This adds up to a 3trillion protection gap and an opportunity for financial advisers to help get the protection message across. The level of bankruptcies is more worrying now some loan companies appear to be trying to make debt seem acceptable to children. Personal finance site www.moneysavingexpert.com has launched a ‘not in front of the children’ campaign to try to stop loan companies advertising on children’s TV channels. It claims companies which offer secured loans to people with poor credit histories have been using advertising slots during children’s programmes. A poll of the website’s users finds children remember the adverts and pester their parents to borrow money to buy them things they want. There is also concern the ads could cause future problems for children receiving these messages at an impressionable age. A petition has been drawn up to encourage children’s channels to stop allowing such advertising and it has widespread support, including among MPs. Financial advisers are unlikely to be able to stop people taking on debt or change the ‘buy now, pay later’ culture. Their message must be about responsible borrowing. It makes sense to set a little aside each month, just in case.
- Top trends
First National has won the Best Sub-Prime Lender category at the 2005 Pink Home Loans Service Awards.The annual Pink Awards serve to highlight the importance of first-class service to mortgage brokers, and continue to set an industry benchmark for all-round excellence in the intermediary mortgage market. Colin Shave, chief executive officer at GE Home Lending, […]
Bank of Ireland has issued a trading update in advance of its close period for the half year ended September 30 2005. The bank says that it has continued to perform strongly in the half year to September 30 2004, and its interim results are expected to feature continuing strong growth in its Irish franchise […]
Products such as accident sickness and unemployment cover and mortgage payment protection insurance have become the bad boys of the insurance industry, in many cases with good reason. This is unfortunate because they can have a meaningful place in a client’s protection arsenal. Mortgage brokers can bring real meaning to ASU but can also, by […]
Smaller brokers are shying away from the equity release market following the Financial Services Authority’s mystery shopping exercise into the sector, a leading industry figure claims. Dean Mirfin, business development director at Key Retirement Solutions, makes the claim in this week’s Mortgage Strategy cover feature. This comes in the wake of the FSA’s investigation that […]
By Jim Grant, Senior Product Insight & Technical Support Analyst, Royal London Transfers to overseas pension schemes are not recognised transfers unless the transfer is to a Qualifying Recognised Overseas Pension Scheme (QROPS). A transfer to an overseas pension scheme that isn’t a QROPS is therefore an unauthorised payment and taxed accordingly. However, even if the […]
News and expert analysis straight to your inboxSign up