Debt Management help and advice from Gregory Pennington http://www.gregorypennington.com
The Forum of Private Business (FPB) commented the unpredictable state of world oil prices plus high fuel duty is causing both small companies and their customers to suffer.

Phil McCabe of the FPB said small businesses depending heavily on day-to-day transport may "see little point in planning for the future, as they are unable to predict when oil prices will stabilise."

"FPB members … are struggling to pay for the inexorable rise in fuel prices. Passing the cost onto their customers is, perhaps, an unfortunate necessity," he said.

This may make small companies less competitive, he added. It may also cause debt problems for smaller businesses.

Figures released by the Federation of Small Businesses this month show 80 per cent of small business owners feel they will be unable to expand in the next year due to fuel costs and 40 per cent may have to cut staff numbers.

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Capital Economics said if consumers continue to spend as they did in May, retailers may push up prices to pass on increased costs to customers. Such a rise could potentially cause debt problems.

Vicky Redwood, economist for the research consultancy, said "a much sharper pick up in inflation then the one we are already looking at" may result from high consumer spending this month.

"We are already looking at inflation rising to four and half percent - we`d be looking at it rising more sharply than that," she added.

From March to May inclusive, sales volume rose by 1.8 per cent according to the Office for National Statistics (ONS). Total volume sales rose 3.5 per cent between April and May.

The British Retail Consortium (BRC) also recorded a "superficial sales burst" of a 1.9 per cent increase in sales from last May, possibly due to the warm weather.

However, Ms Redwood said she expects to see a decline in sales this month. "If that were not to happen then that ... would be a bit worrying from an inflation point of view," she commented.


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Chief executive of Moneynet Richard Brown suggested saving as little as £10 a month would develop "a brilliant habit" that would eventually lead to a larger nest egg.

"We looked at several accounts and if, for example, you save £25 a month with Halifax, that`s £330 with your ten per cent. It`s not a lot of money, but it gets you in a habit for when you are in a position of earning more money," said Mr Brown.

"It`s just good housekeeping," he added.

Last week, Nationwide released a report revealing 74 per cent of British consumers think saving is important, while 50 per cent have a regular saving habit.

Almost a third of those questioned don`t think they will be saving enough in six months` time and nearly half (49 per cent) think now is a bad time to save for the future.


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The figures, from a survey carried out by credit reference agency Equifax, indicated 32 per cent of people are willing to postpone credit card repayments to pay for mortgages and other "essentials".

It was also found that 32 per cent of those questioned have taken out doorstep loans and 31 per cent have acquired payday loans.

Borrowers may pay the equivalent of 2.6 million APR, the survey discovered.

Equifax external affairs director Neil Munroe said the research indicated people "are well aware of the risk of bad debt" but should make paying off their most expensive debts a priority.

Lenders are not passing the Bank of England`s five per cent interest rate on to borrowers and this, combined with climbing household bills, is causing financial concerns, he said.

"We urge people to talk to their lender if they are struggling with repayments in order to avoid trouble further down the line. Being as well informed as possible is also crucial," Mr Munroe added.

Today it was reported by Combined Insurance that the cost of living has risen by 26 per cent in two years.

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Following recent figures from the British Retail Consortium (BRC) on consumer confidence, Debt Advisers Direct stated that as the financial outlook gets bleaker, more and more people will struggle with debts.

The BRC found that consumer confidence in the financial sector has slumped to a record low.

As a result, solutions to debt problems - such as consolidation loans - could be available for many people, but they should only do so with expert advice, a spokesperson said.

The representative added: "We`d always recommend people seek help before it`s too late, but today it`s more important than ever to take prompt action.

"Already, one in five people has no spare cash, but experts are predicting further rises in the cost of essentials like petrol, food and utilities."

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Cover is "especially useful" for those landlords worried about mortgage arrears, said a spokesperson for the letting industry`s online community.

Emergency assistance and breakdown cover is also "a good idea" as it makes repairs easier to manage, according to Tom Entwhistle, editor of Landlordzone.co.uk.

Rent guarantee insurance may also cover legal costs if a tenant is taken to court.

Since April 2007, landlords and letting agents in England and Wales have been required to join a tenancy deposit protection scheme when offering an assured shorthold tenancy agreement.

Almost a million deposits worth £900 million have been protected in the past year, Citizens Advice recently told BBC Radio 4 show Money Box.

A report from the Association of Letting Agents said that rent levels are not "soaring" as expected, due to more new developments coming on-stream. In London and the south-east, among other places, rental property demand is higher than supply.


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The credit crunch is prompting people to save more for the future, the research suggests, with 37 per cent of respondents stating their spending habits have changed in the last six to twelve months. Most are trying to restrict their spending.

However, over a quarter of people (27 per cent) surveyed "sometimes" or "always" feel their finances are "out of control" and almost 40 per cent say they save nothing from their pay cheque. Eight per cent say their outgoings regularly exceed their earnings.

Credit Action director Chris Tapp suggested that getting information about financial problems is important and that after talking to family and friends, the internet is the most popular source of advice.
"It`s important people are aware of the good sources of help that are available," he commented.
Mr Tapp also likened experiencing financial difficulties to "being the passenger in a speeding car".
In related spending news, people are now spending more than ever on travelling, said Lonely Planet.

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Figures from the Office of National Statistics show that during that between February and April the number of people out of work rose by 38,000.

Of these, 20,000 were in the financial services sector, which has been hard hit by banks and buildings societies recording reduced profits.

However, the loss of 10,000 jobs in the manufacturing sector is deemed by analysts to be more worrying since this group is less likely to be financially secure in the event of a prolonged downturn.

Vicky Redwood, UK economist at Capital Economics, said: "The recent rises are likely to be just the tip of the iceberg.

"The risk of a vicious circle of falling house prices and rising unemployment is growing by the day."

Signs that the downturn is beginning to hit the real economy come at a time when millions of Britons are already struggling with rising credit card debt and soaring living costs.


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Those banking on a late payday to boost retirement savings could be in for a shock, as research by Fool found that wage rises flattened out at an average pay packet of £35,000 once a worker turns 40.

Debt problems for those in middle age may not go away easily, as for 65 per cent of 40 year olds, they will not have another wage increase - if inflation is taken out of the equation.

David Kuo, head of personal finance at Fool, said: "We all like to think that milestone birthdays lead to exciting turning points in our lives. But it seems we shouldn`t get too ecstatic about life beginning afresh and full of bounty when we hit 40."


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According to research by insurance.co.uk, 16 per cent of Brits are suffering so much financially that the recent hikes to fuel costs are the last straw, with them currently considering leaving their jobs.

Meanwhile, in order to manage their debts more effectively - and not add to them, a quarter of those polled decide to leave the car at home to cut costs, while 35 per cent are reducing car trips to supermarkets.

The company`s Steve Grainger said: "The rising cost of fuel is taking its toll on British drivers in more ways than one.

"In the current climate, it`s more important than ever that motorists take stock of their finances."

Recent research by Post Office Travel Services found that the cost of unleaded petrol has risen by 20 per cent in the UK in the last year.


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Research from Alliance & Leicester found that 16 per cent of Brits have to use credit cards in order to pay for essential maintenance, despite tightening lending criteria.

The UK`s debt problems continue to shine through as the study found that 45 per cent confessed that they could afford no more than £500 if an emergency occurred, while eight per cent did not know how they would cover the cost of something breaking down.

Hetal Parmar, manager for savings at Alliance & Leicester, said: "We would encourage people to start saving sooner rather than later to avoid a basic household emergency becoming a financial headache."

Last month, research by the insurer found that over half of Brits are struggling to keep up with the rising cost of living.


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The wide accessibility of credit over the last few years has left many people with large debt problems that they thought were under control, Transact stated.

As a result of tightened credit conditions through the global credit crunch, many people across the UK are now struggling to cope with their financial status, requiring professional debt advice to sort out their problems, Janet Elliott, coordinator at the company, said.

She added: "An increasing number of people are finding that their sums no longer add up. This is compounded by big increases in food costs and energy costs…A large number of people are already, very stretched."

Research by Credit Action found that total secured lending on homes at the end of April 2008 stood at £1,207 billion and that this had increased 8.7 per cent in the last 12 months.


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According to the study by CreditExpert, only 26 per cent of Brits can accurately state how much they have to pay on their loans, as debt problems continue to mount up.

The research also found that the majority of British consumers do not plan their finances regularly, with only one in five admitting to planning a budget every six months or less.

Meanwhile, the 18 to 34 age group are the worst at keeping track of their debts, with nearly a quarter admitting to being bad at managing their finances.

Jim Hodgkins, managing director of the company, said: "It`s alarming to see that while almost the entire UK population think they are on top of their finances, many aren`t."

According to research by Credit Action, the average UK consumer owed £4,840 on credit cards, loans and overdrafts at the end of April.


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According to figures compiled by Credit Action, the total UK personal debt stood at £1.43 trillion at the end of March this year - an increase of £113 billion, or 8.7 per cent, over the past 12 months.

The data found that the average household in Britain now owes £9,216 in credit card bills and overdrafts, excluding mortgages. That figure leaps to £57,420 when mortgages are taken into account.

Meanwhile, despite reports of a slowing housing and mortgage market, the total secured lending on homes increased by 9.1 per cent in the year to the end of March to £1.2 trillion.

Two-fifths of those with a mortgage have secured debts in excess of £90,000 - up from just one-fifth in 2004.

Credit Action is a financial education charity.


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The company has overall plans to reduce its workforce by 2,000 employees in the next three years following the bailing out of the failing business by the Bank of England earlier this year.

However, at present 176 people work in the bank`s debt management division but this number is set to increase to over 400 by the end of March next year.

Other divisions will not be so fortunate with most set to be reduced by nearly half in the bank`s bid to cut costs, according to the BBC.

Northern Rock recently received a loan of £26.9 billion to help stabilise the company from the Bank of England. It has plans to pay back the first £7 billion by the end of this year.


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Previous charges of up to £35 per day for unauthorised bounced payments are to be replaced by a charge of £8 per transaction, in a move which will come into effect in August 2008.

However, another UK bank - Lloyds TSB - offers customers a service which lets them know when they are either close to the maximum authorised limit, or about to go overdrawn.

Under existing pricing structure, guaranteed but unauthorised transactions are charged at a rate of £30 per payment.


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34 per cent of adult Britons believe that they will have less money to spare over the next two quarters, data from Alliance & Leicester has revealed. It`s particularly worrying news for people whose finances are already stretched to the limit - many of them may need to consider a debt solution, such as a management plan or a debt consolidation loan.

However, a total of 55 per cent of Britons have confirmed they`ve already taken action to improve their overall levels of financial health

"It is encouraging to see people are making positive changes to their spending and budgeting habits," said Emma Walkley, current account manager at Alliance & Leicester, an organisation with a history going back to 1997.

"This will hopefully stand them in good stead should they see their disposable income affected over the forthcoming months."

It was also identified by Alliance & Leicester that 79 per cent believe the reduction in spare cash is a consequence of cost increases in a number of areas, such as fuel prices, food and household bills.


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According to research by financial taskforce AXA, 44 per cent of teenagers aged 14 to 17 intend to apply for a credit card after reaching the age of 18, while a further 18 per cent claimed they would actively pursue a bank loan, according to moneyhighstreet.com.

Researcher Professor Nick Chater is quoted as saying: "These things are seen as the norm so that teenagers think they are only doing what is typical in expecting to get into debt sooner rather than later."

He added that another reason for this may be the inability of many young people to manage a budget effectively, with 70 per cent overspending by an average 16 per cent when put in charge of their household`s finances for a week as part of the study.

A recent survey by Which? magazine found that many people are acting irresponsibly with their credit and debit security, with over 50 per cent of respondents using just one Pin number for all cards.


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Transact - which represents over 1,200 debt counselling agencies - claims the credit crunch has left many professionals living in some of the UK`s most affluent areas seeking debt solutions.

Director of Community Money Advice (CMA) Heather Keats comments: "We are seeing a new type of client. Teachers, police and banking and service sector workers, many of them homeowners, are struggling with mortgages, secured loans, and credit card debts.

"They were already financially stretched but have been pushed over the edge by dearer credit and big increases in food and utility costs."

CMA research figures show that the number of people seeking debt solutions has risen 85 per cent on average in the last 12 months, with that figure rising to 234 per cent in the historically affluent city of Tunbridge Wells.

Transact was established to promote best practice and cohesion across the various types of debt management agencies.


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According to a survey by Fool, one in seven consumers is not convinced that their bank will not go bust.

However, a lack of understanding of the companies behind the banks may be behind the stress. A total of 27 per cent of Abbey customers expressed concern about the bank, despite the fact it is part of the third-biggest bank in Europe - Banco Santander.

David Kuo, head of personal finance at Fool, said: "Banks can play a huge part in calming customers and avert a run on another British bank.

"We therefore urge them to come clean over the size of bail-out that they accept from the Bank of England`s special liquidity scheme."

Public confidence in the banking system has wavered since the Northern Rock crisis last September.


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