Archive for 2008
UK Consumer Spending Increases Again
A survey conducted by market research group GFK NOP has shown a rise for the second month in a row in UK consumer spending. This is a trend which bucks the current economic climate of job losses, a prolonged period in the rising cost of living and the beginnings of recession.
The BBC states that this may suggest success in Government and Bank of England fiscal policy, following VAT rate reductions from 17.5% to 15% and successive interest rate cuts to a low of 2% – but the broadcaster is hesitant to report a ‘real’ improvement.
Rachael Joy from GFK NOP confirmed this hesitancy by saying:
“The Consumer Confidence Index has improved again this month after the interest rate cut and the drop in petrol prices, but continues to hover at near record lows.”
“The crucial question is whether the improvement in this index will be translated into activity on the High Street during the January sales.”
Overall Record Low in UK Consumer Spending
It is the record lows in UK consumer spending that are perhaps most worrying when gauging the strength of the economy, suggesting that despite recent increases, many consumers are simply choosing not to spend with the same confidence. We may of course be seeing a seasonal glitch.
High Street Retailers Rally For Cash
The abundance of High Street sales before Christmas could be the best indicator of a failing economy. As companies desperately attempt to generate enough income to survive the traditionally quieter times in the first quarter of 2009, the question on most commentators lips seems to be when will the collapse of yet another well known High Street store occur, not if.
The ‘surprise increase in retail sales’ therefore, as the BBC describes the official figures released yesterday, may not, unfortunately, tell the real story.
Middle Aged Worst Hit By ‘Debt Denial’
Debt Denial – Britons are short by £693 on monthly household budgets before they seek debt help
Britons are still waiting far too long to get help with their debts, according to new research from free debt solutions provider Payplan. Research on over 100,000 customers has revealed that they are short by a monthly average of £693 on their household expenditure when they seek assistance for their debts.
This figure varies by age, with middle aged debtors suffering under the largest difference between income and outgoings (an income of £1,864 vs. expenditure of £2,452). At the other end of the scale, 20-30 year olds seeking help for their debt problems come to Payplan with a deficit of almost £400 a month on their outgoings.
Key Payplan Debt Facts
- Britons wait until they owe more than 50% of their income to creditors before seeking help.
- The average unsecured monthly debt repayment is £901.40.
- Indebted Britons wait until their deficit stands at £693 before seeking help. This deficit is growing; last year it was £671.
- The largest deficits, and the largest growing deficits, are those of 40-50 and 50-60 year olds. The average deficit for this age is £837, with a deficit growth of £67.
- In 2008, homeowners spent 52.15% on their unsecured debt repayments, compared with renters, who spent 49.48%.
- The over-sixties have the largest excess debt as a percentage of their income. With the gap between their income and expenditure standing at £724, to cover their debts they would need a 55% increase in their income – although many are approaching retirement and a reduced income.
30-40 Year Olds Bucking Trend
The one group bucking the trend and coming to Payplan earlier, with smaller deficits, are 30-40 year olds. Although their deficit is still high, at £659.22, it has reduced by £60.00 a month in the past year, sparking suggestions that this particular group are choosing to get help sooner rather than later.
John Fairhurst, Managing Director of Payplan, commented on this research:
“We strongly urge people to get advice on their options as soon as they feel they have a problem. You might be scared to tell your creditors that you are having difficulties, but you shouldn’t be afraid to tell an independent and confidential debt advice agency.
“Our research shows that British debtors are waiting far too long before seeking professional help. Prior to the credit crunch, if Britons couldn’t afford their repayments they would often borrow further to pay them off, which clearly just made their situation even worse.
“Now what we are seeing is an increase in calls as people realise that they simply cannot borrow more money. Our statistics show that the problem increases dramatically with age. The earlier customers come to us for help with their finances, the better for them.”
For free debt advice and free debt solutions contact Payplan on 0800 254 5205 or through the online debt calculator.
Payplan Launches Specialist Arrears Management Service For Lenders
Payplan, the free debt solutions provider, today announces plans to launch a specialist arrears management scheme for mortgage lenders. This new service, completely free to those in debt, will focus specialist support for customers who are struggling to honour their mortgage payments due to unsecured debts.
2009 Will Prove Worst Ever For Missed Mortgage Payments
Payplan’s service will help lenders counter 2009′s greatest threat; rising arrears. Around 3 million fixed-rate and discounted mortgage deals end in 2008 and 2009, and borrowers will move into higher mortgage payments. Due to the recession and other debt commitments, borrowers are not financially prepared for this rise, leading to increased mortgage arrears.
Helping Prevent Reoccurring Mortgage Arrears
In addition, mortgage lenders have been suffering as customers prioritise unsecured debt repayments. Payplan’s clients in mortgage arrears also owe on average £42,500 in unsecured debt, and often haven’t told their mortgage lender this. Payplan’s new service enables lenders to see the ‘whole picture’ of a customer’s indebtedness, and then works out the best course of action to reduce the chance of arrears reoccurring.
Phil Bushell, Arrears Manager at Payplan, commented on the development of the service:
“Against this back drop of rising arrears, the benefits of the scheme for lenders are clear: improve your clients’ finances, clear their arrears and enable them to make regular mortgage payments once again.
“Without an intermediary service like Payplan’s to manage the entirety of a customer’s debt, traditional solutions such as payment breaks and capitalisation of arrears only serve to delay an inevitable decline into further arrears.”
Are You Struggling With Mortgage Arrears?
Payplan provides free, ethical and immediate debt help to over 100,000 people every year, including advice for people with mortgage arrears, working closely with organisations in the field of money advice and consumer and employee welfare.
Call Payplan free on 0800 254 5205 to speak with an experienced debt adviser or alternatively, contact Payplan online.
British Debtors Face A Cheerless Christmas As Repossession Becomes A Reality
John Fairhurst, Managing Director of Payplan, the free debt solutions provider, gives reaction to the Government’s Repossession Guidelines.
Payplan Welcomes Repossession Guidelines
“We welcome today’s implementation of the Government’s guidelines to help those facing repossession, which is a growing and very real problem in Britain today.
Rise In Charging Orders & Orders of Sale
“Payplan regularly sees people making the mistake of prioritising credit card debt repayments above more important debts, such as their mortgage. They have a mistaken belief that repossession simply won’t happen in their case, and that their home will remain safe. Recent rises of 48% in the number of repossessions in the first half of this year show how urgent this problem has now become. Alongside this, increasing numbers of unsecured lenders are now also applying for ‘Charging Orders’ which allow them to seek ‘Orders for Sale’ if repayment arrangements are not maintained.
£42,000 Average Unsecured Debt
“Those coming to Payplan for help with mortgage arrears owe on average £42,000 to unsecured creditors in addition to their mortgage debt. Often mortgage lenders are unaware of this additional debt, without understanding the full problem they are unable to offer a sustainable solution. Hopefully, these new guidelines will improve communication between borrowers and lenders, and allow for better understanding from both sides.
Christmas Debt Stress
“In our experience many people worry that their home will be at greater risk if they admit the full extent of their problems. This is simply not the case, we find that it is almost always possible to both save the home and reduce debt repayments to an affordable rate. We urge over-indebted Britons to get help now rather than face a Christmas of stress and worry about debt.”
Mortgage Arrears Help and Repossession Advice
Consumers having difficulty paying their mortgage should call the Payplan Mortgage Arrears Hotline on 0800 917 7819 or they can submit their mortgage arrears details online.