Archive for Financial News Category
If you are confused by the new Universal Credit you are not on your own. Many people are still not clear about how they will be affected or what they need to do. If that sounds like you don’t panic, help is at hand.
Here are some facts on Universal Credit you may find helpful and also details of where to find more information.
Universal Credit is a new means-tested single benefit payment that is going to replace certain income-based benefits over the next four years starting from this month (April).
The new Universal Credit payment system will start for new claimants in selected areas of North West England this month. New claimants elsewhere in England, Scotland and Wales will be enrolled into the Universal Credit system after October 2013, and new claims in Northern Ireland will receive Universal Credit as from April 2014.
If you are already claiming benefits that are affected by these changes, you will be switched over to Universal Credit sometime between April 2014 and 2017.
In a press release from his Government department, Iain Duncan Smith, the Work and Pensions Secretary, said that by April 2014 over one million people will be claiming Universal Credit. It is expected to rise to 12 million by 2017.
Universal Credit will only apply to people aged 18 or over, but under the qualifying age for pension credit (i.e. of working age) who are on a low income with savings of less than £16,000 and who need help with bills including rent and childcare.
It will ultimately replace Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Child Tax Credits, Working Tax Credits and Housing Benefit. In future, any new claimants who are eligible for any of these benefits will receive one Universal Credit payment each month, instead of the individual benefits listed.
If you are already claiming any of the above benefits then your local benefits office will contact you in advance regarding your switch to Universal Credit.
Improve the transistion
One of the aims of the new system is to improve the transition from unemployed to employed, because it can be claimed by households with people who have just started work, or who are already in work but on low income.
As part of the Government’s ‘digital by default’ scheme, Universal Credit must be applied for online. Claimants will be expected to manage their claims with an online account. Anyone who needs help with this can contact a designated ‘Digital Champion’ in their local Jobcentre. This person will be fully trained to help and support people who are unsure about managing their Universal Credit information via the internet.
Further information on Universal Credit is available on the following websites:
Turn2Us (benefits help)
If you are a Payplan client who is worried how Universal Credit will affect your payments speak to your Case Officer as soon as possible. They will be able to talk through your personal circumstances and see how Payplan can help.
Payplan, a leading provider of free debt advice, has today welcomed the Bank of England’s decision to leave the base rate at 0.5% – but say it may not help homeowners already struggling to pay mortgage increases.
“Whilst the base rate has remained unchanged we have already seen a number of mortgage lenders increase their SVR (standard variable rate), and the Euro crisis could push the cost of mortgage borrowing even higher. Many households have faced a sustained squeezing of their incomes in the last few years while prices have continued to rise. Now an increase in their mortgage payment could be the straw that breaks the camel’s back.”
Jason Eaves a Director at Payplan
The group who will feel the economic pinch the most are the 800,000 mortgage customers who have struggled to meet their mortgage commitments and already been provided with some level of mortgage forbearance by their lenders.
“Prior to the credit crunch, financial deregulation, low interest rates and supreme confidence in the economy, led to a significant expansion of credit. For many low and middle income earners spending exceeded earnings for the ten years leading up to 2007 and this was fuelled by increased borrowing.
“Whilst there is evidence that some consumers have been using the windfall of super low mortgage rates to repay personal debt, there are many who continue to have significant unsecured debt outstanding.
“At Payplan we have almost 20 years’ experience of helping people with debt problems. We know some consumers take out new debt just to make payments on existing loans. This may provide some breathing space but is not sustainable.
“Our advice to anyone who is worried about falling into debt is to seek help as soon as possible. Further information is available here on our website or we can be contacted free on 0800 254 5205.”
Note to Editors
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As we enter into a double dip recession, many of us will still have painful memories of the last one in 2009. Some of Britain’s biggest businesses folded, such as Woolworths and many sectors including construction and banking struggled. So what does the double dip recession mean for the UK?
The UK economy shrank by 0.2%* over the first quarter of 2012. This follows a fall of 0.3%* over the final quarter of 2011. The definition of a recession is when we have two consecutive quarters that report a negative growth.
The economical state was partly due to a sharp fall in construction output, as production fell by 0.4% over the first quarter of the year and construction decreased by 3%. Others say that the Eurozone had an impact which could have been a factor in the recession.
As we enter the second half of 2012, growth is expected to pick up. Inflation is predicated to drop, meaning that people will have more money to spend, and unemployment figures are already dropping as more people return to work.
Joanne Elson OBE, chief executive of the Money Advice Trust explains “While the technical recession might have only just returned, unfortunately the people’s recession never really went away.”
To make sure that you protect yourself during the recession you can keep your outgoings down by budgeting and beginning to build up a pot of savings.
*According to official figures released by the Office for National Statistics
An ePetition was recently launched by Martin Lewis’ Money Saving Experts Website to bring financial education into schools. The petition caused a lot of debate amongst lots of people, as some believe that debt occurs because of lack of knowledge, while others believe it is due to unforeseen events such as illness, redundancy or an addition to the family.
Whatever your reason for debt, it is always important for you to have an understanding about the charges that are applied to your credit cards and loans.
If you have taken out a loan you will know that you signed an agreement prior to it outlining the amount you are borrowing, the interest percentage that will be charged and the total amount that you will pay back as well as detailing your repayment amount and period. This agreement is known as a Consumer Credit Agreement and is required under the Consumer Credit Act. Once you have signed this agreement, you are acknowledging and accepting the terms including interest and charges that may be applied if you fail to comply with the agreement.
If you have taken out a credit card you will once again know that you must sign and agree to a Consumer Credit Agreement, the same as with a loan. With a credit card, the card provider can increase or reduce the interest rate over the time that you have your account. The new interest rate will apply to all of the money you owe on your card, except for any amounts you may have at special promotional rates.
If your card provider decides to increase your interest rate, it must give you at least 30 days’ notice. When card providers tell you about an increase in your interest rate, they will explain in clear language how it is changing, what it will cost and the options available to you.
You can decide not to accept the new interest rate. If you do this within 60 days, your card provider will close the account and you will need to pay back the money you owe at the current interest rate. If your card provider also offers other lending products, such as personal loans, it may let you transfer the balance on your credit card or store card to one of these, at your current interest rate (or a lower rate).