Debt In 2009 & Latest Insolvency Figures

Calm Before The Storm: Payplan Expects A Large Rise In Bankruptcies And Numbers Seeking Debt Help Next Year

John Fairhurst, Managing Director of Payplan, the free debt solutions service, comments on this Friday’s quarterly Insolvency Service statistics:

Payplan clients are ‘£650 short’ of their financial commitments

“Today’s figures from the Insolvency Service only show part of the problem. What we are seeing is a dramatic short fall between what people should pay towards their debts and what they can afford to pay. On average, Payplan customers are £650 short every month in meeting their financial commitments. Although these people are not bankrupt they are technically insolvent when they call for help and have been for some time. People are waiting far too long to address their debt problems and advice agencies are still only seeing the tip of an iceberg.

Credit used to fund ‘food and fuel bills’

“The high levels of unsecured debt that we see are not necessarily accrued through lavish lifestyles. Many people are regularly overspending on day to day living costs, building up debt through putting their food and fuel bills onto credit cards. The recent lack of available credit has left these people facing a personal financial crisis, which Payplan believes will create a large increase in people seeking debt help next quarter, and a significant jump in those facing bankruptcy over the next year.

Confronting debt in 2009

“The average person coming to Payplan for help owes over £30,000 in unsecured loans. The earlier that financial help is sought, the more likely it will be that the more serious consequences of debt can be avoided. We expect debt issues to come to the fore next year, as more indebted Britons living on credit are confronted with their financial problems.”

Debt help from Payplan

Freephone 0800 280 2816 six days a week to speak with an experienced debt adviser. Lines are open 8am to 9pm Monday to Friday and 9am to 3pm on Saturdays. Or submit your details online using Payplan’s Debt Calculator.

Filed Under Debt News, Payplan Press Releases | Trackback | 1 Comment

Food Price Rises Slowing – Good News Tempered by Recession?

BBC Survey Provides Bittersweet Relief for Household Budgets

According to a survey commissioned by the BBC, there is evidence that food price rises are slowing, which may come as some relief to consumers, who, for most of 2008, have experienced above inflationary rises in food prices.

Further news that the price of oil has fallen dramatically in the last week will also be met with relief as some petrol retailers cut prices on their forecourts to below £1 per litre.

Unemployment Fears

The news is bittersweet however, when one considers that those people who’ve been left struggling to cope with the monetary pressures of their household budgets now have to face a widely predicted and imminent global recession. One major concern for any economy during a recession is the inevitable increase in unemployment figures.

Any reduction in the cost of living will be helpful for many people, but without regular employment, there can seemingly be no way forward for those who can’t pay their household living costs and debts.

Payplan Offers Free Debt Advice

Payplan offers free debt advice to anybody who has a debt problem and needs help organising their household budget, and finding free debt advice easily at a time when it’s most needed can be essential to preventing further and more serious financial problems. Payplan’s experience could prove invaluable.

To find the most suitable budgeting and debt advice for your personal financial circumstances, call 0800 280 2816 or contact Payplan online.

Filed Under Debt News | Trackback | Leave a Comment

The Over Fifties, Debt and Retirement

Over Fifties May Have To Delay Retirement To Clear Debts

New research from Payplan, the UK’s leading provider of free debt solutions, reveals the growing problems that indebted ‘pre-retirees’ (aged 50-60) face as their average unsecured debts soar to £41,400. This is 25% higher than the average unsecured debts of other age groups (£32,700) and paints a gloomy picture for many older consumers as they approach retirement. This research has been carried out with over 40,000 Payplan consumers.

‘Significantly More Debt’

Not only are ‘pre-retirees’ in significantly more debt than other age groups but it also takes them longer to pay back this debt: their average repayment term in a debt management plan is 11 years, compared with 9 years for other groups. This gap has increased by 27%, suggesting that debt for ‘pre-retirees’ is a growing problem and potentially one that will increase as the recent economic turmoil forces up the prices of groceries, utilities and unsecured borrowing.

Other Key Research Findings

14% of Payplan customers that registered between July 2007 and June 2008 were aged 50-60.
‘Pre-retirees’ spend 15% of their total expenditure on utility costs, compared with 13% across all other age groups.
The average surplus income* of an indebted 50-60 year old is £307.38, compared with £290.21 across all ages.

Pre-Retirement Debt…Hugely Concerning

Such high levels of ‘pre-retirement’ debt are hugely concerning. Not only are the salaries for this group likely to fall rather than increase over the repayment term but at this age any ‘surplus’ income should be saved to cover their retirement – which could last over thirty years.

Managing Director of Payplan, John Fairhurst, comments:

“Most people imagine that as they reach the countdown to finishing work, they will have paid off their mortgage and be busily saving for a comfortable retirement. These figures show that this is simply not the case for many ‘pre-retirees’ and highlights a hugely concerning trend towards indebtedness in later life.

“Indeed, with this group taking an average of eleven years to clear their debts on their existing income, many of our clients will have no option but to delay retirement until they clear outstanding balances and have had the chance to build some type of nest egg.

“Although many people in their fifties are used to maintaining high levels of personal debt they are often just ‘treading water’ with repayments and covering little more than interest charges. If they are to enjoy a reasonable standard of living in later life then it is vital that they have a clear plan in place for becoming debt free whilst they are still working.”

*Surplus: The amount of money left over at the end of the month once all priority debts, such as mortgage/rent and utility bills, have been paid.

About Payplan

Free, confidential advice is available from Payplan (either online or by calling 0800 280 2816, or your local Citizens Advice Bureau, who can help work out a debt repayment plan, as well as exploring what other options are available.

Notes to Editors

Payplan Case Studies

All our case studies are available for interview. For further information please contact Payplan’s Press Office:

Jane Jenkins,
Payplan PR Manager
Email: jane.jenkins@payplan.com
Telephone: 01476 581 279

Payplan is helping a 50-year-old postal worker who has £58,954 of unsecured debt. He took loans to fund his daughter’s wedding and spent a lot of money treating his grand-children. He has a mortgage on his house, as well as a secured loan. He is in a debt management plan and is paying £181.32 per month.
Payplan is helping a 55-year-old divorcee in £52,277 of debt. She is a full-time, live-in carer and has a mortgaged property which she rents out. Her debts were caused by her business failing. She used credit cards and loans to buy stock and machines. She is in a debt management plan and is paying £319.95 per month.
Payplan is helping a 58-year-old man who is retired and lives with his wife in a rented house. The couple have £26,000 of unsecured debt. He was involved in a near-fatal lorry accident which left him with health problems that meant he had to give up work. He is in a debt management plan and pays £126.51 per month.

Related Payplan Debt News

Older People In Debt

Filed Under Debt News, Financial News, Payplan Press Releases | Trackback | Leave a Comment

Debt and Relationships During the Credit Crunch

Debt and Relationships – Are Couples Really Staying Together to Protect their Finances?

$Is the Credit Crunch Saving Couples\' Relationships?$ Whilst the world’s leading economies debate how they can help shore up some of its biggest and influential financial institutions, according to a recent poll by Cahoot, the Credit Crunch and resulting economic unrest is more likely to encourage couples to stay together to weather the storm.

The poll taken by the Cahoot online bank (a division of Abbey National plc) suggests that 30% of men and 25% of women were ‘less likely’ to separate due to the Credit Crunch, on the understanding that living together allows for economies of scale and generally costs less.

However, this may not be the reality.

Recently released UK divorce figures (for 2007) from the Office for National Statistics (ONS) may well show the lowest recorded levels of divorce in 26 years, but with the effects of the Credit Crunch expected to last for at least another two years by many financial commentators, these figures may not reveal the true extent, for married couples at least, of how the Credit Crunch is affecting people’s relationships.

The Reality of Debt and Relationships

Matthew Timms, Cahoot’s Managing Director, commented on the poll by saying “there are clearly economic benefits to being in a relationship, such as shared bills, lower rent and even reduced car insurance premiums.”

Whilst this is undoubtedly true, as is the fact singles may pay more for their living costs, what the poll doesn’t appear to establish is whether or not those taking part in the survey already had relationship problems – it’s highly unlikely that the whole truth behind the Credit Crunch and its effect on the complex issues of debt and relationships has revealed itself just yet.

Where to Get Help with Debt and Relationship Problems

Many debt problems that Payplan clients face are as a direct result of a marriage or relationship breakdown, but many people in debt come to Payplan who have relationship problems due to their debts and overall financial health – this is very often the root cause of a relationship breakdown.

There are several organisations that can offer help and support for relationships that breakdown because of debt and other causes. One such organisation is Relate, who offer relationship counselling across the UK:

Relate – Relationship Counselling

Relate Scotland – Relationship Counselling for Scottish Residents

Debt Help from Payplan

If you are in a relationship which is suffering because of the stress of debt, then Payplan can offer free debt solutions and advice. Call Payplan confidentially for free on 0800 280 2816 or alternatively submit your debt problem online.