MANY children returning to school this week will get their first taste of personal finance education.
More than 2,000 students in over 100 schools and colleges in England and Wales are already studying the equivalent of GCSEs and A-levels in personal finance on a course set up by the Institute of Financial Services (ifs). And this number is set to rise dramatically.
The course first hit schools and colleges last year, covering banking, saving, borrowing, tax and National Insurance, with 60 hours of study in the Foundation paper.
This month the Intermediate Certificate, the second component of the qualification, kicks off.
It's an essential subject for youngsters if they are going to make the most of their money and avoid the HYPERLINK "javascript:self.name='main';PopUp('you_popup','/pages/jargon/index.html?in_jargon_term=mis-selling','350','150')" mis-selling and debt traps suffered by many of their parents' generation.
Research suggests classes on personal finance and budgeting in schools can lead to a couple with two children being on average £32,000 wealthier by the time they reach their 30s and 40s.
The Institute for Public Policy Research carried out its study in the U.S., where children are taught basic finance skills. But personal finance education in the UK remains mainly down to the whim of a school's headteacher.
The ifs exam is available only in schools that choose to take it up, and compulsory education on the subject remains pitiful.
The Qualification and Curriculum Authority (QCA) is introducing units to cover money, saving and spending as part of the Personal, Social and Health Education & Citizenship classes in schools this month.
Meanwhile, under an initiative known as Learning Money Matters, which has been set up by City watchdog the Financial Services Authority and which is due to start in September 2008, basic finance skills will be taught as part of the maths GCSE.
But critics say this is inadequate as it provides only seven-and-a-half hours of study over two years.
Most adults had to pick up financial skills in life as they borrowed, saved and spent. So here's your chance to test yourself with some basic questions from the two exam papers.
U.K. Banks' Unsecured Bad Debts Set to Increase, Says S&P
U.K. banks may see an increase in unsecured bad debts in the ``short term'' as consumers find it harder to repay credit amid rising living costs and after insolvency rules introduced two years ago made defaulting less onerous, said credit analysts at Standard & Poor's Rating Services.
``Unsecured impairments are likely to climb further,'' said the London-based analysts led by Nick Hill in a statement. ``Competition is likely to restrain any attempt to increase margins to compensate for the additional risk.''
Rising energy costs and interest rates and rules making it easier to negotiate so-called individual voluntary arrangement orders among those who default, have driven up unsecured bad debt by 70 percent in the last two years among the U.K.'s biggest banks, said the analysts.
Pretax profit at the U.K. units of seven British banks including HSBC Holdings Plc rose by an average of just 2 percent in the first-half of this year. Overall profits at the five biggest lenders climbed 22 percent, driven by overseas lending and corporate banking, said the analysts.
Lloyds TSB Group Plc, the No. 1 provider of unsecured loans in the U.K., ``has the greatest sensitivity to a further deterioration'' in consumer bad debts, said the analysts. A 50 percent increase in its bad-debt charge could reduce pretax profit by 18 percent. On the same measure, Barclay's profit would drop 11 percent and HSBC's 3 percent, the analysts said.
Debt Growth Slowing
The pace of growth in bad debts is expected to slow as banks have tightened their lending criteria. Still, ``indebtedness in the U.K. is unlikely to decline quickly,'' the analysts said. Prospects for growth in unsecured lending are ``low'' due to pressure on fee income, as the U.K.'s Office of Fair Trading's probes so-called payment-protection insurance, which is sold on loans and credit cards.
U.K. household debt is at a record 1.19 trillion pounds ($2.3 trillion), the bank of England said in May. Individual insolvencies in England and Wales rose in the second quarter to the highest since records began in 1960.
Sun, sand & spending: holidaying Brits hit borrowing high
As summer draws to an end, for many Britons the anticipation of a well-earned break has been replaced with the anxiety of paying for it all. A sixth (15 per cent) of British holiday makers admit to borrowing money to pay for their holidays this summer, according to the latest Personal Credit Index from CreditExpert, the online credit monitoring service from Experian. ??
By far the most popular form of finance is a credit card, with 14 per cent of holiday makers choosing to pay for their holiday using this method, while one in 10 (10 per cent) had no idea how they were going to pay for their fortnight in the sun before they set off. ??A third (33 per cent) of those who used a credit card to pay for their summer holiday say they don’t expect to repay the borrowed amount at their next statement, reveals the CreditExpert/Ipsos MORI research, which polled c2,000 adults across Great Britain in June and July of this year. ??Some 14 per cent estimate it will take them four to six months to pay off their holiday credit card bill, meaning they could still be paying interest on the debt at Christmas. Two per cent expect to still be paying off the cost of this holiday in a year’s time. ??
Heat is on as credit confidence drops ??Personal credit confidence has seen a three point drop – from 101 in the second quarter of this year, to 98 in the third quarter, according to the CreditExpert Personal Credit Index, which tracks consumers’ current credit confidence and future expectations on a quarterly basis.
The impact of holiday costs may have contributed to this fall, together with rising fuel and energy prices and other seasonal effects. ??The number of borrowers who are uncomfortable with their level of borrowing has risen by two percentage points over the third quarter of 2006, to 15 per cent, reflecting this overall drop in credit confidence.
Yet despite this, the vast majority of borrowers (76 per cent) still say they are comfortable with their current level of borrowings. ??Among those with multiple credit holdings (defined as three or more credit cards or loans and a mortgage), a third (34 per cent) said they were uncomfortable with their debt in June – compared to just 18 per cent in April, clearly showing the impact of this drop in confidence. ??
On borrowed time??More than a quarter (27 per cent) of borrowers say they expect their level of borrowing to decrease over the next six months, compared to 30 per cent in the second quarter of the year – a three percentage point drop in only three months. ??
“Getting carried away and overspending a little on holiday is something nearly everyone has experienced, but the latest Personal Credit Index reveals a worrying picture of people failing to budget for their holiday costs or plan their repayments, meaning they could be repaying holiday borrowings well up to and beyond the Christmas period,” says Jim Hodgkins, Managing Director of CreditExpert.co.uk. ??
“Being constantly aware of your financial situation can help you plan your future spending better and ensure that high periods of spending, such as holidays, don’t leave you struggling for the rest of the year.
An online credit monitoring service, such as CreditExpert, provides a summary of your financial situation so it can help you get your finances in order before planning any further spending. It will also alert you to any changes in your credit report which could have an impact on your future financial plans.”
THE number of debt judgments issued by the UK County Courts has soared, jumping by its highest number for 16 years.
County Court Judgments brought by lenders against people who haven't paid their debts hit 165,000 in the three months from the beginning of April to the end of June.
The figure was up by 25,000 on the same period in 2005 – the largest year-on-year increase since the start of the recession in 1990.
According to the Registry Trust, the body behind the figures, lenders were attempting to recover £500m worth of debt by going to the courts. Registry Trust chairman Malcolm Hurlston said: 'The rise in the number and value of consumer CCJs is proof of their [the lenders] concern about the performance of the credit economy. They are increasingly looking to the courts to recover bad debts owed by individuals.'
A HYPERLINK "javascript:self.name='main';PopUp('you_popup','/pages/jargon/index.html?in_jargon_term=CCJ','350','150')" CCJ stays on a person's credit record for six years unless they pay the balance within a month of its being issued. Even if the debt is paid within the six years, the CCJ will remain on file, but will be marked as 'satisfied'.
A CCJ is the first step in a legal process that can end with bailiffs at your door, demanding goods to the value of the debt. It is also the first step for a lender to take out a charging order, which converts an unsecured debt into a secured one, enabling it to make a claim on equity in the borrower's property.
The average amount of a CCJ in the quarter was £2,386, up from £2,155 in the same quarter last year.
Thousands of first-time buyers who cannot afford homes in London are joining forces with friends in "mates" mortgages.
Britain’s biggest bank, HSBC, said it has seen a 50 per cent rise in group loans.
• Stamp duty up 30 per cent in just three months • £1m won't buy you a nice country home as prices rocket
These allow up to four friends to club together in a single mortgage so that they can buy a property that would otherwise be way beyond their reach.
Research from the bank suggests that up to three quarters of first-time buyers would consider purchasing a property with friends.
Barry Blackshaw, senior manager of lending markets at HSBC, said: "We are addressing customer need.
"First-time buyers are increasingly unable to meet traditional lending criteria as a result of house-price growth.
"As prices are unlikely to fall any time soon, we are expecting this trend to continue."
Demand for the mortgages is likely to be particularly strong in London, where prices have soared in a miniboom in many areas this year.
Nationally, first-time buyers are having to borrow a record average of 3.21 times their incomes, according to figures from the Council of Mortgage Lenders.
Although group loans are still only a small proportion of total lending, the figure of 0.7 per cent last year was more than double the 0.3 per cent seen in 2000.
Other lenders to offer them include Abbey, HBOS and the Britannia Building Society.
Last month, Morgan Stanley launched a shared equity loan through its new lending arm, Advantage, which offers up to seven times borrowers’ incomes in exchange for a share of potential profits when they sell.
But there is also growing concern that solutions such as clubbing together could create problems.
Sue Anderson, of the CML, said: "This kind of offer can create unstable households, which could ultimately be bad news for the owners and for the property market."
Keith Tondeur, of debt advice charity Credit Action, said: "They are building a housing market bubble but if the bubble bursts, millions of borrowers will be in trouble."
The Government is working closely with banks to ensure their customers get clearer information on credit card cheques
from media.netpr.pl
The Government is working closely with banks to ensure their customers get clearer information on credit card cheques.
Following a consultation, the DTI found consumers wanted more information on how credit card cheques work. Lenders have now agreed to include a summary of the costs and fees for using the cheques when they are distributed.
The consultation revealed that although there was a demand for more
transparency about fees and charges, there was no evidence to suggest credit card cheques were causing debt.
Consumer minister Ian McCartney has now called on lenders to introduce these measures as soon as possible. He said:
"These steps are an important move towards increasing the transparency about the marketing and use of credit card cheques.
"The extra information will go a long way in helping consumers and will make it easier for them to find the type of finance they want. I will be looking to the industry to deliver speedily on the changes it has promised.
"If it fails to do so, or if there is evidence that the operation of these cheques is causing harm to consumers, we will look again at the need to regulate."
Members of the payments trade association, APACS, have agreed to print
summary boxes on leaflets and letters sent out with credit card cheques
by the end of the year. A requirement to use them will be written into the banking code in 2007.
The summary boxes will include information on:
* details of interest rates for credit card cheques - including both
promotional and standard rates;
* clearer information on charges for using the cheque, for example fees for
use and charges if the cheque is not honoured;
* legal information explaining that credit card cheques do not benefit from
the same level of consumer protection as credit card payments; and
* a statement explaining how to dispose of unwanted cheques.
Twenty responses were received from credit card companies, trade associations
and debt-advice organisations during the consultation.
The Government will be keeping in close touch with industry bodies to ensure
they deliver their commitment to make information clearer for consumers.
Notes to Editors
1. The Government recently published its annual Over-Indebtedness Report. The
report outlined actions the Government is taking to tackle over-indebtedness,
including:
* the introduction of the Consumer Credit Act 2006 with new laws to improve
responsible lending and borrowing;
* £120m funding for financial inclusion initiatives including £45 million
to fund the launch of more free face-to-face debt advice around the UK and
£6 million to fund outreach initiatives; and
* the launch of Debt Test, an online self-assessment tool to improve financial
capability, particularly among young people.
* The full text of the Government response to the consultation is available
The Government is working closely with banks to ensure their customers get clearer information on credit card cheques
from media.netpr.pl
The Government is working closely with banks to ensure their customers get clearer information on credit card cheques.
Following a consultation, the DTI found consumers wanted more information on how credit card cheques work. Lenders have now agreed to include a summary of the costs and fees for using the cheques when they are distributed.
The consultation revealed that although there was a demand for more
transparency about fees and charges, there was no evidence to suggest credit card cheques were causing debt.
Consumer minister Ian McCartney has now called on lenders to introduce these measures as soon as possible. He said:
"These steps are an important move towards increasing the transparency about the marketing and use of credit card cheques.
"The extra information will go a long way in helping consumers and will make it easier for them to find the type of finance they want. I will be looking to the industry to deliver speedily on the changes it has promised.
"If it fails to do so, or if there is evidence that the operation of these cheques is causing harm to consumers, we will look again at the need to regulate."
Members of the payments trade association, APACS, have agreed to print
summary boxes on leaflets and letters sent out with credit card cheques
by the end of the year. A requirement to use them will be written into the banking code in 2007.
The summary boxes will include information on:
* details of interest rates for credit card cheques - including both
promotional and standard rates;
* clearer information on charges for using the cheque, for example fees for
use and charges if the cheque is not honoured;
* legal information explaining that credit card cheques do not benefit from
the same level of consumer protection as credit card payments; and
* a statement explaining how to dispose of unwanted cheques.
Twenty responses were received from credit card companies, trade associations
and debt-advice organisations during the consultation.
The Government will be keeping in close touch with industry bodies to ensure
they deliver their commitment to make information clearer for consumers.
Notes to Editors
1. The Government recently published its annual Over-Indebtedness Report. The
report outlined actions the Government is taking to tackle over-indebtedness,
including:
* the introduction of the Consumer Credit Act 2006 with new laws to improve
responsible lending and borrowing;
* £120m funding for financial inclusion initiatives including £45 million
to fund the launch of more free face-to-face debt advice around the UK and
£6 million to fund outreach initiatives; and
* the launch of Debt Test, an online self-assessment tool to improve financial
capability, particularly among young people.
* The full text of the Government response to the consultation is available
U.K. Banks Unsecured Bad Debts Set to Increase, Says S&P
from Bloomberg
U.K. banks may see an increase in unsecured bad debts in the ``short term'' as consumers find it harder to repay credit amid rising living costs and after insolvency rules introduced two years ago made defaulting less onerous, said credit analysts at Standard & Poor's Rating Services.
``Unsecured impairments are likely to climb further,'' said the London-based analysts led by Nick Hill in a statement. ``Competition is likely to restrain any attempt to increase margins to compensate for the additional risk.''
Rising energy costs and interest rates and rules making it easier to negotiate so-called individual voluntary arrangement orders among those who default, have driven up unsecured bad debt by 70 percent in the last two years among the U.K.'s biggest banks, said the analysts.
Pretax profit at the U.K. units of seven British banks including HSBC Holdings Plc rose by an average of just 2 percent in the first-half of this year. Overall profits at the five biggest lenders climbed 22 percent, driven by overseas lending and corporate banking, said the analysts.
Lloyds TSB Group Plc, the No. 1 provider of unsecured loans in the U.K., ``has the greatest sensitivity to a further deterioration'' in consumer bad debts, said the analysts. A 50 percent increase in its bad-debt charge could reduce pretax profit by 18 percent. On the same measure, Barclay's profit would drop 11 percent and HSBC's 3 percent, the analysts said.
Debt Growth Slowing
The pace of growth in bad debts is expected to slow as banks have tightened their lending criteria. Still, ``indebtedness in the U.K. is unlikely to decline quickly,'' the analysts said. Prospects for growth in unsecured lending are ``low'' due to pressure on fee income, as the U.K.'s Office of Fair Trading's probes so-called payment-protection insurance, which is sold on loans and credit cards.
U.K. household debt is at a record 1.19 trillion pounds ($2.3 trillion), the bank of England said in May. Individual insolvencies in England and Wales rose in the second quarter to the highest since records began in 1960.
Match the money whizzkids
This is money/Daily Mail?06/08/07
MANY children returning to school this week will get their first taste of personal finance education.
More than 2,000 students in over 100 schools and colleges in England and Wales are already studying the equivalent of GCSEs and A-levels in personal finance on a course set up by the Institute of Financial Services (ifs). And this number is set to rise dramatically.
The course first hit schools and colleges last year, covering banking, saving, borrowing, tax and National Insurance, with 60 hours of study in the Foundation paper.
This month the Intermediate Certificate, the second component of the qualification, kicks off.
It's an essential subject for youngsters if they are going to make the most of their money and avoid the mis-selling and debt traps suffered by many of their parents' generation.
Research suggests classes on personal finance and budgeting in schools can lead to a couple with two children being on average £32,000 wealthier by the time they reach their 30s and 40s.
The Institute for Public Policy Research carried out its study in the U.S., where children are taught basic finance skills. But personal finance education in the UK remains mainly down to the whim of a school's headteacher.
The ifs exam is available only in schools that choose to take it up, and compulsory education on the subject remains pitiful.
The Qualification and Curriculum Authority (QCA) is introducing units to cover money, saving and spending as part of the Personal, Social and Health Education & Citizenship classes in schools this month.
Meanwhile, under an initiative known as Learning Money Matters, which has been set up by City watchdog the Financial Services Authority and which is due to start in September 2008, basic finance skills will be taught as part of the maths GCSE.
But critics say this is inadequate as it provides only seven-and-a-half hours of study over two years.
Most adults had to pick up financial skills in life as they borrowed, saved and spent. So here's your chance to test yourself with some basic questions from the two exam papers.
Sun, sand & spending: holidaying Brits hit borrowing high
from www.easier.com
As summer draws to an end, for many Britons the anticipation of a well-earned break has been replaced with the anxiety of paying for it all. A sixth (15 per cent) of British holiday makers admit to borrowing money to pay for their holidays this summer, according to the latest Personal Credit Index from CreditExpert, the online credit monitoring service from Experian. ??
By far the most popular form of finance is a credit card, with 14 per cent of holiday makers choosing to pay for their holiday using this method, while one in 10 (10 per cent) had no idea how they were going to pay for their fortnight in the sun before they set off. ??A third (33 per cent) of those who used a credit card to pay for their summer holiday say they don’t expect to repay the borrowed amount at their next statement, reveals the CreditExpert/Ipsos MORI research, which polled c2,000 adults across Great Britain in June and July of this year. ??Some 14 per cent estimate it will take them four to six months to pay off their holiday credit card bill, meaning they could still be paying interest on the debt at Christmas. Two per cent expect to still be paying off the cost of this holiday in a year’s time. ??
Heat is on as credit confidence drops ??Personal credit confidence has seen a three point drop – from 101 in the second quarter of this year, to 98 in the third quarter, according to the CreditExpert Personal Credit Index, which tracks consumers’ current credit confidence and future expectations on a quarterly basis. The impact of holiday costs may have contributed to this fall, together with rising fuel and energy prices and other seasonal effects. ??The number of borrowers who are uncomfortable with their level of borrowing has risen by two percentage points over the third quarter of 2006, to 15 per cent, reflecting this overall drop in credit confidence.
Yet despite this, the vast majority of borrowers (76 per cent) still say they are comfortable with their current level of borrowings. ??Among those with multiple credit holdings (defined as three or more credit cards or loans and a mortgage), a third (34 per cent) said they were uncomfortable with their debt in June – compared to just 18 per cent in April, clearly showing the impact of this drop in confidence.
??On borrowed time??More than a quarter (27 per cent) of borrowers say they expect their level of borrowing to decrease over the next six months, compared to 30 per cent in the second quarter of the year – a three percentage point drop in only three months. ??
“Getting carried away and overspending a little on holiday is something nearly everyone has experienced, but the latest Personal Credit Index reveals a worrying picture of people failing to budget for their holiday costs or plan their repayments, meaning they could be repaying holiday borrowings well up to and beyond the Christmas period,” says Jim Hodgkins, Managing Director of CreditExpert.co.uk. ??
“Being constantly aware of your financial situation can help you plan your future spending better and ensure that high periods of spending, such as holidays, don’t leave you struggling for the rest of the year. An online credit monitoring service, such as CreditExpert, provides a summary of your financial situation so it can help you get your finances in order before planning any further spending.
It will also alert you to any changes in your credit report which could have an impact on your future financial plans.”
THE number of debt judgments issued by the UK County Courts has soared, jumping by its highest number for 16 years.
County Court Judgments brought by lenders against people who haven't paid their debts hit 165,000 in the three months from the beginning of April to the end of June.
The figure was up by 25,000 on the same period in 2005 – the largest year-on-year increase since the start of the recession in 1990.
According to the Registry Trust, the body behind the figures, lenders were attempting to recover £500m worth of debt by going to the courts. Registry Trust chairman Malcolm Hurlston said: 'The rise in the number and value of consumer CCJs is proof of their [the lenders] concern about the performance of the credit economy.
They are increasingly looking to the courts to recover bad debts owed by individuals.'
A CCJ stays on a person's credit record for six years unless they pay the balance within a month of its being issued. Even if the debt is paid within the six years, the CCJ will remain on file, but will be marked as 'satisfied'.
A CCJ is the first step in a legal process that can end with bailiffs at your door, demanding goods to the value of the debt. It is also the first step for a lender to take out a charging order, which converts an unsecured debt into a secured one, enabling it to make a claim on equity in the borrower's property.
The average amount of a CCJ in the quarter was £2,386, up from £2,155 in the same quarter last year.
Thousands of first-time buyers who cannot afford homes in London are joining forces with friends in "mates" mortgages.
Britain’s biggest bank, HSBC, said it has seen a 50 per cent rise in group loans.
• Stamp duty up 30 per cent in just three months?
• £1m won't buy you a nice country home as prices rocket
These allow up to four friends to club together in a single mortgage so that they can buy a property that would otherwise be way beyond their reach.
Research from the bank suggests that up to three quarters of first-time buyers would consider purchasing a property with friends.
Barry Blackshaw, senior manager of lending markets at HSBC, said: "We are addressing customer need.
"First-time buyers are increasingly unable to meet traditional lending criteria as a result of house-price growth.
"As prices are unlikely to fall any time soon, we are expecting this trend to continue."
Demand for the mortgages is likely to be particularly strong in London, where prices have soared in a miniboom in many areas this year.
Nationally, first-time buyers are having to borrow a record average of 3.21 times their incomes, according to figures from the Council of Mortgage Lenders.
Although group loans are still only a small proportion of total lending, the figure of 0.7 per cent last year was more than double the 0.3 per cent seen in 2000.
Other lenders to offer them include Abbey, HBOS and the Britannia Building Society.
Last month, Morgan Stanley launched a shared equity loan through its new lending arm, Advantage, which offers up to seven times borrowers’ incomes in exchange for a share of potential profits when they sell.
But there is also growing concern that solutions such as clubbing together could create problems.
Sue Anderson, of the CML, said: "This kind of offer can create unstable households, which could ultimately be bad news for the owners and for the property market."
Keith Tondeur, of debt advice charity Credit Action, said: "They are building a housing market bubble but if the bubble bursts, millions of borrowers will be in trouble."
The Government is working closely with banks to ensure their customers get clearer information on credit card cheques
from www.media.netpr.pl
Following a consultation, the DTI found consumers wanted more information on how credit card cheques work. Lenders have now agreed to include a summary of the costs and fees for using the cheques when they are distributed.
The consultation revealed that although there was a demand for more
transparency about fees and charges, there was no evidence to suggest credit card cheques were causing debt.
Consumer minister Ian McCartney has now called on lenders to introduce these measures as soon as possible. He said:
"These steps are an important move towards increasing the transparency about the marketing and use of credit card cheques.
"The extra information will go a long way in helping consumers and will make it easier for them to find the type of finance they want. I will be looking to the industry to deliver speedily on the changes it has promised.
"If it fails to do so, or if there is evidence that the operation of these cheques is causing harm to consumers, we will look again at the need to regulate."
Members of the payments trade association, APACS, have agreed to print
summary boxes on leaflets and letters sent out with credit card cheques
by the end of the year. A requirement to use them will be written into the banking code in 2007.
The summary boxes will include information on:
* details of interest rates for credit card cheques - including both
promotional and standard rates;
* clearer information on charges for using the cheque, for example fees for
use and charges if the cheque is not honoured;
* legal information explaining that credit card cheques do not benefit from
the same level of consumer protection as credit card payments; and
* a statement explaining how to dispose of unwanted cheques.
Twenty responses were received from credit card companies, trade associations
and debt-advice organisations during the consultation.
The Government will be keeping in close touch with industry bodies to ensure
they deliver their commitment to make information clearer for consumers.
Notes to Editors
1. The Government recently published its annual Over-Indebtedness Report. The
report outlined actions the Government is taking to tackle over-indebtedness,
including:
* the introduction of the Consumer Credit Act 2006 with new laws to improve
responsible lending and borrowing;
* £120m funding for financial inclusion initiatives including £45 million
to fund the launch of more free face-to-face debt advice around the UK and
£6 million to fund outreach initiatives; and
* the launch of Debt Test, an online self-assessment tool to improve financial
capability, particularly among young people.
* The full text of the Government response to the consultation is available
LONDON (Reuters) - A UK banking giant is set to scrap expensive credit card cheques, leading to calls for other lenders to follow suit.
The Royal Bank of Scotland (RBS.L: Quote, Profile, Research), Europe's second largest bank and the world's fifth biggest, will withdraw credit card cheques at the end of September.
It is the first to do so since the Department of Trade and Industry opened a consultation on measures to improve the transparency of credit card cheques in November last year. It is due to announce the findings of its enquiry shortly.
Nick White, head of personal finance at price comparison service uSwitch.com, said the RBS move was "certainly a step in the right direction and one which we hope other providers will follow.
"It's good news to see that one of the largest credit card providers in the country is leading the way by ending this practice for both new and existing customers," he said.
In January, RBS and its NatWest subsidiary stopped sending out the cheques unsolicited.
White said the bank's decision to stop issuing them altogether was "tantamount to an admission that it's only commercially viable for the banks to do so if they can send them out unsolicited -- encouraging customers to use them who otherwise would not."
Credit card cheques have long been regarded as one of the key contributors to a rise in bad debt, which has been increasingly eating into banks' profits.
RBS' bad debt charge in its retail markets unit rose 19 percent to 680 million pounds in the six months to end-June, continuing a trend among banks showing consumers are struggling to pay back unsecured loans.
Credit card companies send out thousands of unsolicited credit card cheques every year.
They allow consumers to draw money from an existing credit card account, and can be useful to buy goods or services from organisations that do not accept credit cards, or pay cash into a bank account.
But the cheques come with a host of hidden charges and higher interest rates than those normally levied on credit card transactions.
Some lenders charge an annual percentage rate of more than 20 percent on purchases made using credit card cheques, according to data from price comparison service Moneysupermarket.com.
Users often find there is no interest-free period, compared to a typical 56 days on credit card spending, and can also be hit with an additional "handling" fee.
The news came a day after APACS, the UK payments association, launched a new credit card cheque summary box. The information box, which will accompany all credit card cheques sent out in the UK by the end of the year, aims to spell out the terms and conditions, such as interest rate and other charges, at a glance.
August is normally a buoyant month due to good weather and school holidays, however not this year. SPSL had predicted a 0.6% rise in month on month shopper numbers. In actuality the month was down 1.3% on July 2006 and the RTI was down 3% year on year.??Commenting on the impact of the interest rate rise, Dr. Tim Denison, Director of Knowledge Management at SPSL said;
“This first tightening of policy by MPC for two years means many will be facing increased mortgage payments and heavier overdraft and credit card debt. It comes at a time when the picture for retail was looking brighter and will be a body blow for retailers who’ve been fighting hard to maintain margins against ever rising energy and other costs and just as the minimum wage is set to rise in October.??
“The increasing pattern of its impact on consumer confidence can be clearly seen in the week by week RTI figures for August; the week commencing 30th July got off to a healthy start with shopper numbers up 0.8% on last year, slightly better than our prediction. Then came the bank’s bombshell and the figures for week two commencing 6th August were down 2.3% on last year, week three commencing 13th August were down 4.5% on last year and week 4 commencing 20th August were down 6.2% on last year.??“The good start to August was partially due to the end of sales and last minute bargain hunting at the start of the holidays.
However, the interest rate rise announcement meant that as the month went on and people re-assessed their financial positions and letters started arriving from building societies and banks, the gap widened. Sadly for retailers, there was no sign that the back to school promotions had had any significant impact on customer numbers. Overall the month ended 3% down on August 2005.??“Looking at regional differences year on year, London’s RTI was up 1.8%.
This is not necessarily as good as it seems, because shopper confidence in London was still badly affected last August by the terrorist attacks in July, but nevertheless it shows that London has recovered somewhat. However, the RTI was still 3.3% below August 2004 figures.??“All other regions saw various levels of decline on Aug 2005; the worst decline being in Northern England which was down 7.4% on last year. This is a sign that house price rises previously seen more in the South are now catching up with the rest of the country, although with the new interest rate rises the brakes may yet be applied.??
“Unfortunately for retailers the outlook for September is not good either. SPSL is expecting a 4.2% drop year on year.”
Debt advice firm Debt Free Direct forecast bumper profits today as record numbers of people became insolvent.??The company said it expected to bank pre-tax profits “at least 10% ahead” of the £9.8m (€7.6m) forecast by City analysts this year.??It pointed to a massive increase in the number of people entering individual voluntary arrangements (IVAs), which allow people to repay a set amount of cash each month in exchange for creditors freezing interest payments on the debt.??Debt Free Direct issued an average of 551 IVAs each month between May and July - up 196% on the same period last year – and a record 607 IVAs in August.??The numbers have soared as more and more people struggle to pay off loans and credit card bills at a time of soaring household energy bills, rising inflation and higher interest rates.??Last month the government said a record 26,021 people in England and Wales became insolvent during the spring and financial services group KPMG predicted the total number of insolvencies this year would top 100,000 – the equivalent of one every minute of the working day.
It has provided a boost for Debt Free Direct, whose shares lifted more than 4% today. Shares in the company have soared by as much as 189% this year.??Altium Securities analyst Martin Cross said it was “another very positive trading update” from the firm.??Mr Cross also forecast the number of monthly IVAs issued by the firm to rise to 900 next year and 1,100 the following year.??Chief executive Andrew Redmond said recent research by PricewaterhouseCoopers showed that lenders got on average 29% more money back through IVAs issued by Debt Free Direct than the rest of the industry.??“This can only contribute positively to our market-leading position,” he said.??The firm added that its recently opened operations in Northern Ireland and Australia were going well.
CreditExpert warns customers over financial awareness
from www.creditcards-gb.co.uk
CreditExpert warns customers over financial awareness
Scoring agency CreditExpert has issued a warning to people in the UK who are unaware of their own credit rating.
According to the agency, consumer debt in the UK is now the equivalent of £23,000 for every adult, yet most people are unaware of the contents of their credit report.
CreditExpert's analysis of this situation has shown that the national average credit score among UK consumers, based on an Experian credit report, is 763 out of a possible 1,000. This is the equivalent of a "moderate risk" for lenders.
Some 61.9 per cent of people score 721 or higher, according to the research, a number which would assess them as fair, good or excellent risks to providers.
Jim Hodgkins, managing director of CreditExpert, points out: "Credit scores change as your credit history changes – and you can't estimate your current position unless you know your credit history."
Mr Hodgkins identifies a number of factors people should be aware of, including whether they have missed repayments, if they are still associated with someone they used to live with, whether they are registered to vote and if they suspect that someone may be using their identity.
According to CreditExpert, 95 per cent of Britons have never checked their credit report, despite two-thirds of people having borrowings and 13 per cent of these admitting to being uncomfortable with their debt.
PROFESSIONALS who give us financial advice often recommend the wrong course of action with no explanation of their methods, says the country's chief financial watchdog
Earlier this year The FSA sent inspectors working undercover to pose as customers at 50 independent financial advice firms.
In each case, the 'mystery shoppers' presented the unwitting adviser with a scenario – typically that a pay rise, inheritance, retirement or redundancy had left them with a cash windfall and that they needed advice on how best to use it.
Other factors like outstanding debts, mortgages or the need for an income were also thrown in for the adviser to handle.
Overall, said the FSA, two thirds of advisers did not carry out a full and fair recommendation process. The inspectors reported that in almost half of cases – 23 of the 50 undercover visits – advisers did not establish all the facts of a client's circumstances before they gave advice.
In these cases, key details of existing debts or the client's willingness to risk money on the stock markets were not taken into account.
Karen Barrett, marketing director for IFA Promotion, the industry body responsible for promoting independent financial advice in the UK, said: 'Like any profession, there are good and bad advisers. You can do things to make sure you get treated better. You will get more out of a meeting with an adviser if you regard it as an assessment of your whole financial position, not just a way to buy a financial product.'
Holidaymakers who used credit cards while abroad to take out cash will be dealt a hammer blow when they come home, experts have warned.
Credit card firms were slammed for hiking interest charges by up to 50 per cent this year in a bid to boost their massive profits.
A Daily Mail investigation reveals more than 10 million customers - equal to one in six Britons - could be hit by the steep new interest charges.
Since January, the majority of Britain's biggest credit cards, such as Barclaycard and Halifax, have sharply raised their interest rates.
The move has been attacked as a cynical response to the Office of Fair Trading's ruling that they must slash their late payment charges by 40 per cent.
Experts said that they have cut their charges to £12 to comply with the OFT - but made sure to get the money back by raising the interest rate. Before the OFT's crackdown, they were charging up to an eyewatering £25 if a payment was made late or an account went over its limit.
Since January, interest rates for taking money out of a cash machine or making a purchases have been raised.
In a grim warning, one expert warned at the time of the OFT announcement: 'Any cut is going to be great news for the consumer but I wonder where the banks will try to make up the money. 'They are not going to be happy to lose this revenue.'
The move will hit holidaymakers enjoying their summer holidays as millions use their credit cards to withdraw cash while they are abroad. On a balance of £1,000, some customers are having to pay a staggering £349 a year in interest, an increase of £50.
One expert slammed the credit cards, which make huge profits every year, for trying to make up the 'lost money' following the OFT ruling. Michelle Slade from the financial research firm Moneyfacts said: 'The rate rises have been in response to the cut in charges they have had to make.
'It is plain and simply a bid to increase their profits. There is no other explanation for it.' As the debt mountain in Britain tops £1.2 trillion, she urged people to be extremely cautious about how they use their credit card in the future.
She said: 'Consumers now need to think very carefully about what they use certain cards for. 'You certainly do not want a large balance sitting around on a credit card with an interest rate of 30 plus per cent.'
Of the 'Big 10', only MBNA, Morgan Stanley which owns Goldfish and Egg have not increased the interest rate for purchases and cash withdrawals. One of the biggest culprits is the banking giant Halifax which increased its rate by 5 percentage points to 15.9 per cent on its Balance Transfer card.
Rival Capital One also raised the interest charge by the same amount to 34.9 per cent, the highest interest rate among the top 10 biggest cards.
The cheapest rate comes from American Express at 14.9 per cent.
The higher interest rates can add up to at least £50 a year extra interest on a £1,000 balance. Halifax customers with its Balance Transfer card would pay an extra £54 a year in interest, £50 with Capital One, and £20 with Lloyds TSB and HSBC.
However, Halifax has lowered the rate on its One credit card, with interest starting at 9.9 per cent, falling from 15.9 per cent earlier in the year.
This is effectively discourages customers from spending on its Balance Transfer card, and persuades them to use the One card for transactions instead. This would save you £60 a year in interest payments with a balance of £1,000.
Of the top 10, Halifax and Barclaycard have decreased the rate for cash withdrawals, but only by the tiniest amount. With Halifax this would equate to a saving of just 10p in interest payments over 12 months on a balance of £1,000, but with Barclaycard £23.45.
But Capital One, Barclaycard, HSBC, Lloyds TSB, and Royal Bank of Scotland/Natwest have all increased theirs. Again on a balance of £1,000 accrued through cash withdrawals you would pay £50.81 a year in extra interest to RBS, £50 to Capital One, £46 to HSBC, £28 to Barclaycard, and £19.63 to Lloyds TSB.
With these rises in fees has also come a reduction in the number of interest-free fee-free balance transfers and the length of time you can get this 0 pc credit.
None of the top 10 providers offer this anymore, while Halifax and RBS both have an uncapped 3 pc balance transfer fee which could potentially add on £150 to a balance transfer of £5,000.
A typical adult now has at least two different credit cards although about one in 20 people has five or more.
They have been blamed for several suicides by people who built up debts that they could not cope with, and were far higher than their income.
Latest figures show borrowing is still rising in the UK and debt help experts The Debt Counsellors are recommending consumers tackle their debt problems with the aim of becoming debt free.
As borrowing increases in the UK, debt help organisation The Debt Counsellors is recommending that consumers make it their goal to become debt free in order to secure a stress-free and financially sound future.
In a survey conducted by the members of the Credit Service Association (CSA), which represents the UK debt collection industry had reported a trend towards business enterprises requesting debt agencies to commence the legal proceedings against their clients at their soonest.??The move could potentially damage the possibilities of establishment of future business relationship between the two firms. The CSA's Godfrey Lancashire commented that debt collection agencies were instructed to go legal within a matter of days. He also added that the current trend suggested that the businesses wanted their cash and saw litigation as the fastest way of getting it. ??Mr Lancashire had further revealed that the majority of debts were recovered without having to resort to the courts and without any additional coats. The relationships between the two businesses firms in no way jeopardised for future.
The Credit Services Association (CSA) reveals the new search report suggesting that majority of the British business firms are seeking court's help at an early stage to recover the debts. The trend is expected to bring a lasting impact on the business relationships between the firms in future.
Britons are collectively missing out on £1.7bn in interest every year by leaving their extra cash sitting idle in their current accounts, research found today.
Almost two thirds of people have money left in their current account by the end of the month, with the average balance coming in at £316.15.
But many are losing out on around £88 of interest each year as just one in five people move surplus cash into a higher rate savings account, according to Yorkshire Bank.
When it comes to setting money aside for future use, almost half of those surveyed said they had less than £250 in savings.
The younger generation is most averse to saving with 28% of those aged between 16 and 24 choosing not to have a savings account and the same percentage setting aside less than £250.
Some 44% of people without a savings account said they did not think they would be able to afford to put anything into it, yet half of these still have money left in their current account at the end of the month.
The research also revealed that parents are more likely to encourage their children to put money aside regularly if they do so themselves.
But one in two people across all age groups who do not have a savings account admit they have needed to borrow from their parents when they have run out of money.
Gary Lumby, head of retail at Yorkshire Bank, said: "Adults should get into the saving habit as soon as possible. When personal debt in the UK has already broken the £1 trillion barrier, it is concerning that unless people start saving soon, this figure will continue to rise and rise.
"It is astonishing in this day and age that people would rather let their hard earned cash gather dust rather than interest by squirrelling it away in drawers and jars at home.
Not only is this unsafe, but it is also unwise as they are not making the most of their money."
PEOPLE living in the south west and south east of England have the best credit ratings in the UK, according to new research.
Nearly two thirds of people living in that area had a credit card that was classed as fair, good or excellent, meaning they would get top rates on most financial products.
Research from credit reference agency Experian found that those living in Wales, Scotland and the North of England had the lowest proportion of people with good credit records, with one in every two people struggling to come up to scratch.
Experian analysed the records of 100,000 people on its books and found the average credit score was 763 out of 1,000. To gain a 'fair' credit record you need a score of 721 or above, with 61.9% of the population making the grade.
To be classed as excellent, a borrower would need a credit record of 961 out of 1,000. The south east, south west, East Anglia and East Midlands had the highest proportion of people achieving this score, with Greater London having the lowest proportion with just 12.8%.
Despite the importance of your credit record when applying for a loan or seeing if you have been a victim of ID fraud, 95% of people still haven't checked theirs.
Children grow up £32,000 richer after money lessons
from www.gulf-daily-news.com
LONDON: Children who receive financial education when at school could be £32,000 ($58,313) richer by the time they are 35, a leading think-tank said yesterday.
Classes on personal finance and budgeting in schools could make children richer by up to £32,000 between the ages of 35-49, according to the Institute for Public Policy Research (IPPR).
The finding, based on an American study, comes ahead of the first full year of financial education in schools in England and Wales from September.
Lessons in basic finance skills - including budgeting, credit management, balancing chequebooks, compound interest and other investment principles - have been compulsory in some areas of the US since 1957.
Researchers found that this had led to people being richer by an average year's earnings.
In the UK this could mean that a couple with two children aged five and 11 could be better off by about £32,000, a couple with no children could £22,000 richer, while a single person with no children could have £13,000 more.
Miranda Lewis, a senior research fellow at the IPPR, said: "It pays to get clued up. Lessons that teach young people the basics of personal finance - like how to calculate interest, household budgeting and understanding mortgages - can help them make the right financial decisions later in life and avoid debt problems.
"The evidence from America shows that financial education can pay real dividends." Classes on money, saving and spending will be part of personal, social and health education, and citizenship classes in schools from next month.
From September 2010 basic finance skills will be taught as apart of the functional maths GCSE.
LONDON (Reuters) - A new mortgage that allows homeowners to pass on their mortgage debt when they die -- and cut any inheritance tax bill -- is set to hit the market.
The Kent Reliance Building Society is poised to launch an "inter-generational mortgage", which allows consumers to pass on their home loan to their children or another beneficiary.
The scheme will mean that homeowners will never repay any of the money borrowed to buy their home, as the mortgage works on an interest-only basis.
Under the scheme, homeowners repay only the interest on their mortgage debt, which passes to their offspring, a non-family member or friend on their death.
That could entail a drastic cut in the amount of their estate that goes to the taxman in the form of inheritance tax.
However, experts warn that this type of mortgage -- already popular in other countries, such as Switzerland and Japan -- will mean paying a huge amount of mortgage interest without ever owning the property.
"As affordability continues to be a struggle for first-time buyers, being able to reduce your monthly mortgage payments by going interest-only is bound to be attractive, particularly when it's combined with reducing your inheritance tax bill," said Melanie Bien, an associate director of independent mortgage broker Savills Private Finance.
"But the reality of this mortgage is that you will pay considerably more interest over the term of the loan than you would with a shorter term or repayment deal, while your family will never own the property."
For example, a 200,000 pound loan on a 25-year repayment basis would cost around 350,754 pounds. At the end of the term, you would own the property outright.
However, if you borrowed the same amount over 40 years on an interest-only basis, you would pay some 400,000 pounds in interest and still owe the original 200,000 pounds.
Bien added that the product might not have the desired effect of reducing liability to IHT.
"If your children don't want to take the mortgage on when you die, it is likely that the property will have to be sold to pay back the capital to the lender anyway, and IHT will be payable if your estate is worth more than the threshold," she said.
Over the past five years, there has been a 49 percent rise in IHT revenue, according to data from the Halifax.
In the last tax year the government collected 3.3 billion in IHT. That is expected to grow to 3.6 billion pounds this financial year.
The tax is charged at 40 percent and levied on the value of estates over the nil rate band, currently 285,000 pounds.
Millions don’t know their credit rating as lending reaches new heights
from www.creditman.biz
As interest
rates rise and consumer debt is now the equivalent of nearly £23,000 for every
adult in the UK, most people are unaware of the contents of their credit report
and how this information affects their credit score - which lenders calculate
to help them decide whether to grant credit and, increasingly, what interest
rate to charge.
An analysis of more than 100,000 Experian National Credit Scores reveals the average National Credit Score (based on your Experian credit report) among UK consumers is 763 out of a possible 1,000 – the equivalent of a moderate risk for lenders.
The study, conducted by CreditExpert.co.uk, the online credit monitoring service from Experian, reveals nearly two-thirds (61.9 per cent) of people score 721 out of 1,000 or higher – which would suggest lenders would regard them as fair, good or excellent risks.
The key to credit ?A credit report is the key to an individual’s credit rating, because lenders use it (along with application information) when they decide whether to make an offer of credit and what interest to charge – so it’s crucial that it is up to date and accurately reflects your credit history and circumstances.
But 95 per cent of Britons have never checked their credit report, , despite two-thirds of people having borrowings and 13 per cent of these admitting to being uncomfortable with their level of debt.
What’s the score? ?Of those who have seen their Experian National Credit Score, men have a slightly better credit score than women, with 63.1 per cent scoring 721 or more, against 59.4 per cent of women.
National Credit Scores also vary across the country, from a high of 64.1 per cent of people with a fair or better score in the South West to a low of 57.9 per cent in the North. Nearly a fifth of those checking their credit score in the South West have an excellent score of 961 or above, compared to 12.8 per cent of those in London.
Area of the UK Fair, good, excellent ?score (721-1000) Excellent score ?(961-1000) ?South West England 64.1% 19.6% ?South East England 63.8% 19.3% ?Northern Ireland 63.6% 17.1% ?East Anglia 63.4% 19.2% ?East Midlands 62.8% 19.2% ?Greater London 61.5% 12.8% ?Yorks & Humber 61.1% 18.0% ?West Midlands 59.7% 17.6% ?North West England 58.7% 15.9%
?
North of England 57.9% 15.3% ?Scotland 62.9% 17.7% ?Wales 58.9% 15.7%
Britons are collectively missing out on £1.7bn in interest every year by leaving their extra cash sitting idle in their current accounts, research found today.
Almost two thirds of people have money left in their current account by the end of the month, with the average balance coming in at £316.15.
But many are losing out on around £88 of interest each year as just one in five people move surplus cash into a higher rate savings account, according to Yorkshire Bank.
When it comes to setting money aside for future use, almost half of those surveyed said they had less than £250 in savings.
The younger generation is most averse to saving with 28% of those aged between 16 and 24 choosing not to have a savings account and the same percentage setting aside less than £250.
Some 44% of people without a savings account said they did not think they would be able to afford to put anything into it, yet half of these still have money left in their current account at the end of the month.
The research also revealed that parents are more likely to encourage their children to put money aside regularly if they do so themselves.
But one in two people across all age groups who do not have a savings account admit they have needed to borrow from their parents when they have run out of money.
Gary Lumby, head of retail at Yorkshire Bank, said: "Adults should get into the saving habit as soon as possible. When personal debt in the UK has already broken the £1 trillion barrier, it is concerning that unless people start saving soon, this figure will continue to rise and rise.
"It is astonishing in this day and age that people would rather let their hard earned cash gather dust rather than interest by squirrelling it away in drawers and jars at home. Not only is this unsafe, but it is also unwise as they are not making the most of their money."
PEOPLE living in the south west and south east of England have the best credit ratings in the UK, according to new research.
Nearly two thirds of people living in that area had a credit card that was classed as fair, good or excellent, meaning they would get top rates on most financial products.
Research from credit reference agency Experian found that those living in Wales, Scotland and the North of England had the lowest proportion of people with good credit records, with one in every two people struggling to come up to scratch.
Experian analysed the records of 100,000 people on its books and found the average credit score was 763 out of 1,000. To gain a 'fair' credit record you need a score of 721 or above, with 61.9% of the population making the grade.
To be classed as excellent, a borrower would need a credit record of 961 out of 1,000. The south east, south west, East Anglia and East Midlands had the highest proportion of people achieving this score, with Greater London having the lowest proportion with just 12.8%.
Despite the importance of your credit record when applying for a loan or seeing if you have been a victim of ID fraud, 95% of people still haven't checked theirs.
Children grow up £32,000 richer after money lessons
from www.gulf-daily-news.com
LONDON: Children who receive financial education when at school could be £32,000 ($58,313) richer by the time they are 35, a leading think-tank said yesterday.
Classes on personal finance and budgeting in schools could make children richer by up to £32,000 between the ages of 35-49, according to the Institute for Public Policy Research (IPPR).
The finding, based on an American study, comes ahead of the first full year of financial education in schools in England and Wales from September.
Lessons in basic finance skills - including budgeting, credit management, balancing chequebooks, compound interest and other investment principles - have been compulsory in some areas of the US since 1957.
Researchers found that this had led to people being richer by an average year's earnings.
In the UK this could mean that a couple with two children aged five and 11 could be better off by about £32,000, a couple with no children could £22,000 richer, while a single person with no children could have £13,000 more.
Miranda Lewis, a senior research fellow at the IPPR, said: "It pays to get clued up. Lessons that teach young people the basics of personal finance - like how to calculate interest, household budgeting and understanding mortgages - can help them make the right financial decisions later in life and avoid debt problems.
"The evidence from America shows that financial education can pay real dividends." Classes on money, saving and spending will be part of personal, social and health education, and citizenship classes in schools from next month.
personal, social and health education, and citizenship classes in schools from next month.
From September 2010 basic finance skills will be taught as apart of the functional maths GCSE.
LONDON (Reuters) - A new mortgage that allows homeowners to pass on their mortgage debt when they die -- and cut any inheritance tax bill -- is set to hit the market.
The Kent Reliance Building Society is poised to launch an "inter-generational mortgage", which allows consumers to pass on their home loan to their children or another beneficiary.
The scheme will mean that homeowners will never repay any of the money borrowed to buy their home, as the mortgage works on an interest-only basis.
Under the scheme, homeowners repay only the interest on their mortgage debt, which passes to their offspring, a non-family member or friend on their death.
That could entail a drastic cut in the amount of their estate that goes to the taxman in the form of inheritance tax.
However, experts warn that this type of mortgage -- already popular in other countries, such as Switzerland and Japan -- will mean paying a huge amount of mortgage interest without ever owning the property.
"As affordability continues to be a struggle for first-time buyers, being able to reduce your monthly mortgage payments by going interest-only is bound to be attractive, particularly when it's combined with reducing your inheritance tax bill," said Melanie Bien, an associate director of independent mortgage broker Savills Private Finance.
"But the reality of this mortgage is that you will pay considerably more interest over the term of the loan than you would with a shorter term or repayment deal, while your family will never own the property."
For example, a 200,000 pound loan on a 25-year repayment basis would cost around 350,754 pounds. At the end of the term, you would own the property outright.
However, if you borrowed the same amount over 40 years on an interest-only basis, you would pay some 400,000 pounds in interest and still owe the original 200,000 pounds.
Bien added that the product might not have the desired effect of reducing liability to IHT.
"If your children don't want to take the mortgage on when you die, it is likely that the property will have to be sold to pay back the capital to the lender anyway, and IHT will be payable if your estate is worth more than the threshold," she said.
Over the past five years, there has been a 49 percent rise in IHT revenue, according to data from the Halifax.
In the last tax year the government collected 3.3 billion in IHT. That is expected to grow to 3.6 billion pounds this financial year.
The tax is charged at 40 percent and levied on the value of estates over the nil rate band, currently 285,000 pounds.
Millions don’t know their credit rating as lending reaches new heights
from www.creditman.biz
As interest rates rise and consumer debt is now the equivalent of nearly £23,000 for every adult in the UK, most people are unaware of the contents of their credit report and how this information affects their credit score - which lenders calculate to help them decide whether to grant credit and, increasingly, what interest rate to charge. ??An analysis of more than 100,000 Experian National Credit Scores reveals the average National Credit Score (based on your Experian credit report) among UK consumers is 763 out of a possible 1,000 – the equivalent of a moderate risk for lenders.
The study, conducted by CreditExpert.co.uk, the online credit monitoring service from Experian, reveals nearly two-thirds (61.9 per cent) of people score 721 out of 1,000 or higher – which would suggest lenders would regard them as fair, good or excellent risks. ??The key to credit ?A credit report is the key to an individual’s credit rating, because lenders use it (along with application information) when they decide whether to make an offer of credit and what interest to charge – so it’s crucial that it is up to date and accurately reflects your credit history and circumstances. ??But 95 per cent of Britons have never checked their credit report, , despite two-thirds of people having borrowings and 13 per cent of these admitting to being uncomfortable with their level of debt.??
What’s the score? ?Of those who have seen their Experian National Credit Score, men have a slightly better credit score than women, with 63.1 per cent scoring 721 or more, against 59.4 per cent of women. ??National Credit Scores also vary across the country, from a high of 64.1 per cent of people with a fair or better score in the South West to a low of 57.9 per cent in the North. Nearly a fifth of those checking their credit score in the South West have an excellent score of 961 or above, compared to 12.8 per cent of those in London.
Area of the UK Fair, good, excellent ?score (721-1000) Excellent score ?(961-1000) ?South West England 64.1% 19.6% ?South East England 63.8% 19.3% ?Northern Ireland 63.6% 17.1% ?East Anglia 63.4% 19.2% ?East Midlands 62.8% 19.2% ?Greater London 61.5% 12.8% ?Yorks & Humber 61.1% 18.0% ?West Midlands 59.7% 17.6% ?North West England 58.7% 15.9%
?
North of England 57.9% 15.3% ?Scotland 62.9% 17.7% ?Wales 58.9% 15.7%
A growing number of women are becoming bankrupt as a result of credit card debts and rising household bills, according to new research. ??The proportion of female bankruptcies has risen from 42 per cent to 44 per cent over the last year, according to accounting firm Wilkins Kennedy. ??In 2002, just 32 per cent of bankruptcies involved women, but the company predicts that by 2009, females will account for more than half of those going broke. ??
The company said that the rise in the number of female insolvencies was being driven by the failure of employers in keeping women's wages in line with men's, despite their increasing financial independence and the growing number of women who now have their own mortgage.??Keith Stevens, an insolvency partner at Wilkins Kennedy, said the rise was also being fuelled by the increasing number of women who want to indulge in the type of lavish lifestyle enjoyed by a footballer's wife.??He said that female bankruptcies could be divided into two categories – single mothers and divorcees and those women who aspired to have the hairstyles, wardrobes, holidays and beauty treatments enjoyed by the England football team's wives and girlfriends – the so-called "Wags". ??
"The Wag-type is a person who thinks she should have a much higher lifestyle than she can afford," said Mr Stevens. ??"Young women are increasingly choosing this Wag lifestyle but it can't be sustained indefinitely. Eventually the debts catch up with you," he warned. ??He said that "wannabe Wags" were constantly running up fresh bills by transferring their debts from one credit card to another with a zero per cent interest rate. ??Expressing concern at the growing number of female bankruptcies, Mr Stevens added:
"It is difficult to see the situation getting any better because so many people are already teetering on the brink of the precipice."??Wilkins Kennedy surveyed some 1,200 insolvencies across England and Wales for their research.??Recent government figures suggest that the number of people going bankrupt in the UK could hit the 100,000 mark this year, following a steady rise in the number if people going broke
Millions of Britons are carrying credit cards around with them that they never use.
from Myfinances.co.uk
But while the average Briton is carrying 2.1 credit cards with them every day, one person in four has one card in their wallet that they have not used in the last year, while one person in nine has two unused cards and one person in ten has three, figures from Morgan Stanley show. ??
The least likely card to be left languishing at the back of wallets is a cash-back card. Just one unused card in seventeen is a cash-back credit card. ??By contrast, cards handed out by major banks and balance transfer cards with their interest-free period expired make up the majority of unused cards. ??
"There has been much speculation about the increasing use of plastic in the UK but our report shows that British cardholders are perhaps more savvy than they have been given credit for," said Patrick Muir, marketing director for the Morgan Stanley Credit Card ??"Millions of cardholders are taking advantage of loyalty schemes for their everyday spending, with these cards least likely to be lying idle in wallets."
??However, there is a danger to dormant cards. While it makes sense to have a back-up card for emergencies, these are the cards that present the greatest identity fraud risk. ??This is because when people do not use cards, cut them up, or leave them in a draw the account remains open. Identity fraudsters who obtain personal information about the account holder can contact the credit card provider and get the account's address changed. ??After this new/replacement cards - along with bills - are sent to a different address and the fraudster can access the account for months racking up thousands of pounds of debt. They can even get the pin-reissued to the new address. ??
And as the account is dormant the real cardholder is not used to receiving statements, meaning they do not even notice this happening.
Unloved and unused: millions of credit cards languish
from Moneyexpert.com
Millions of adults in the UK are lumbering their wallets with plastic that never gets used, said a Morgan Stanley survey. ??The average adult keeps 2.1 credit card on their person at all times .
A quarter have cards that they have not used for the past year however, while one in nine people has two.??Around one in ten people are still carrying cards that last saw service in mid 2003, the survey revealed.
Most of the unused cards were balance transfer cards with old deals. ??"There has been much speculation about the increasing use of plastic in the UK but our report shows that British cardholders are perhaps more savvy than they have been given credit for," said Patrick Muir, marketing director for the Morgan Stanley Credit Card ??"Millions of cardholders are taking advantage of loyalty schemes for their everyday spending, with these cards least likely to be lying idle in wallets." ??
Morgan Stanley warned that unused cards could leave owners vulnerable, as the account is still active but unlikely to be regularly checked. ??If a fraudster got hold if any personal details they could have the billing address changed – leaving them free to run up debt, with months before the fraud is discovered. ??
The Government has stepped in to help tackle Britain's £1,200bn consumer debt mountain, unveiling plans to fund more free advice and improve consumers' financial knowledge.
The plans, outlined in a cross-Government report Tackling Over-Indebtedness 2006, include a commitment to introduce basic financial skills into the GCSE maths curriculum in England from 2008 and £51m to fund 500 more staff offering free advice to people who are struggling to pay off massive debts. The National Debtline and Consumer Credit Counselling Service will also be expanded.
The moves come after growing concerns that spiralling debt levels, a surge in utility bills and the recent rise in interest rates, are threatening to ruin tens of thousands of British households. Earlier this month, the Insolvency Service said a record 26,021 borrowers filed for bankruptcy between April and June. Two months ago Debt Free Direct, the debt adviser, estimated that 2 million people were facing irreversible financial problems while a recent report from the Financial Services Authority said almost 3 million consumers face a constant struggle to keep up debt repayments.
The UK's five biggest banks have been hit by soaring bad debts, collectively losing £3.25bn from bad loans in the first six months of the year.
Yesterday's report, jointly produced by the Department of Trade and Industry, the Department for Work and Pensions and the Department for Constitutional Affairs, is the third since the Government drew up plans to help consumers tackle ballooning debts. As part of the plan, a £120m Financial Inclusion Fund was announced in the Pre-Budget report in 2004. The Government will direct £36m towards credit unions and has increased the cap on interest they can charge in a bid to make it more attractive to offer affordable credit to those on low incomes.
A spokesman for Citizens' Advice said: "These measures are a good start, but it is not going to solve the problem immediately."
Other measures include a scheme for 200,000 workers in 2006/07 to gain access to information and education on personal finances in their workplace. A "money box" for parents will be created with information on maternity rights and child benefits.
The DTI is also funding pilot projects to crack down on loan sharks and calling on banks to share more data to promote responsible lending. Comment: B2
Credit card debts run up by professionals in their 50s have outstripped those of younger generations, with debtors in Birmingham among the worst offenders.
The stark findings came from the Consumer Credit Counselling Service yesterday which said one debtor, an unnamed 56-year-old, among its cases owed a total of £412,000 on 57 credit cards.
According to the charity, the 53 to 59 age group has the highest outstanding credit card balances.
Even in retirement, one in ten people admitted they owed money, with about 70,000 having debts of between £50,000 and £75,000.
