Britons are becoming increasingly financially confident, new figures show.
In CreditExpert's latest Personal Credit Index the nation's financial optimism has risen by two points over the last three months to stand at 98. Despite this surge, the online credit report company pointed out this is still below the 100 recorded in April. The study suggested this positive outlook is due to more people feeling financially secure after completing making repayments for their summer holiday and with the spending pressures that come in the run-up to Christmas yet to take effect.
In addition, the findings also indicated that more than three-quarters (76 per cent) of those with credit cards and loans now feel comfortable with their level of debt - a rise of two percentage points from the previous study. Overall, 53 per cent of consumers across all types of borrowing are at ease with how much they are in the red by. Once again this figure is a two percentage point increase from the company's earlier research.
A drive surge in financial confidence was noted throughout Britain, with optimism in London and the Midlands rising by ten and five points to reach 96 and 105 respectively. However, the sole exception was the north of England where the index decreased by three points from July figures to stand at 97. According to the company this fall could have been driven by the collapse of the sub-prime mortgage sector, which was suggested as having a greater impact upon this particular region than any other in the country.
Research from the firm also revealed there is a slowing in the uptake of borrowing, which could well incorporate areas such as personal loans and credit cards. The latest figures show that 13 per cent of consumers have upped the amount of money borrowed over the past six months. However, in CreditExpert's July index growth of 16 per cent was posted.
In spite of swelling confidence, CreditExpert reported millions of homeowners could be coming under unexpected financial pressure. The announcement comes as, when asked what the impact of a 0.5 per cent base rate rise by the Bank of England would have on their monthly payments for a 100,000 pounds interest-only mortgage, 70 per cent of respondents answered incorrectly.
According to the firm, about a fifth of people surveyed state that this increase will hike mortgage costs by at least 80 pounds, although the actual move would stand at about 40 pounds. Difficulties in paying back mortgages, personal loans and other constraints on spending may be more evident for the 17 per cent who believe such an increase will see their monthly payments rise by no more than 10 pounds.
Meanwhile, more than three-quarters of consumers are unaware as to what the term annual percentage rate (APR) means. About half of those surveyed believe it is solely the interest rate payable on borrowing. However, the true definition of APR is the interest rate and the cost of a loan.
Commenting on figures, Jim Hodgkins, managing director of CreditExpert, said: "Although the current Personal Credit Index shows that people generally are more confident than in the last quarter, the lack of understanding of key terms and the effect of interest rate changes is worrying. It's important for people to be familiar with standard financial terms and stay on top of changes that affect their personal finances so they can make the best possible decisions and choices."
In addition, Credit Expert stated that the financial strain that the forthcoming festive period brings as well as predictions that the Bank could change the base rate may cause the nation's financial confidence to dip as they may develop difficulties making repayments on various forms of borrowing such as loans and overdrafts.
As a result, those people who are concerned about future hardship their finances may come under might well wish to think about applying for a debt consolidation loan. Taking out such a form of borrowing could see them with more disposable income left at the end of each month, extra money which could prove useful in the run-up to Christmas. Earlier this month, Martin Lewis from MoneySavingExpert reported that although the festive period often sees many people struggle to handle their money, consumers can avoid "costly debts" in the new year by preparing their finances adequately and saving during the autumn and winter months.
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Thursday, February 14, 2008
Students 'Struggling With Debt'
Students are increasingly developing difficulties in handling their money, new research shows.
In a recent survey of university attendees conducted by Equifax, almost half (44 per cent) of respondents are spending more than 300 pounds every month on living expenses, with this figure not including rent costs. However, with more than one in five (22 per cent) being unaware what their total expenditure accounted for until they have recieved their monthly credit cards and bank statements, continuing such a habit may see these people developing problems in making repayments on personal loans and credit cards in later life.
Financial difficulties could become even more pronounced for the 36 per cent of those attending university who have less than 1,000 pounds saved before starting higher education.
Commenting on the figures, Neil Munroe, external affairs director for Equifax, said: "It is expected that more than 400,000 students will start university this autumn. However, the cost of pursuing a degree continues to rise, with our survey showing that students really struggle with debt on a day-to-day basis. Worryingly, 40 per cent claimed to hide debt from parents and partners, but burying their head in the sand won't help. It is probably more important for students, than almost any other sector of society, to be proactive when it comes to dealing with their finances."
In addition, the company reported the average student starting a three-year undergradute course this autumn could be some 30,000 pounds in debt by the time they graduate in 2010. Over this period, the typical student will spend between 39,000 and 45,000 pounds.
"Young people shouldn't miss out on the opportunity to go to university because of the cost. But it means they have to be more financially savvy than ever. With a little preparation and careful budgeting, students can avoid getting into financial difficulty, securing the future of their finances as well as their education," Mr Munroe added.
He also asserted that unless young people are able to get their capacity for money management "on an even-keel at this stage of their life, they could well be catching up for a very long time" Consequently, to avoid developing an untenable debt situation both while they are in education and post-graduation, the firm urged that students should draw up a budget tracking their incomings and expenditure. By having a set idea of how much expenses such as tuition fees, living costs and transport will see them back, Equifax reported that people should be able to get a better grip on their spending.
In addition, those who choose to borrow money, whether this be through plastic cards or personal loans, were advised to make sure they keep up with demands for payment. Should they not do so however, the company warned that borrowers could discover that their financial history is damaged, so reducing their access to cheap loans in the future. Equifax pointed out that many students who use credit cards to fund their spending "end up paying thousands in interest and late payments". However, those who find that they are becoming unable to manage their finances were advised to seek guidance from a professional advisory service or their university's student welfare officer.
Such sentiments were echoed earlier this year by Joanne Gill, head of marketing at Chiltern Debt Management. She claimed that those people who seek advice on managing their personal loans and other types of debts are often treated "sympathetically and positively". Meanwhile, should consumers still find that they are struggling to meet various demands on their finances after graduating, applying for debt consolidation loans could well be an advisable move. Doing so could see borrowers consolidate numerous debts into a single low-rate repayment.
77415
In a recent survey of university attendees conducted by Equifax, almost half (44 per cent) of respondents are spending more than 300 pounds every month on living expenses, with this figure not including rent costs. However, with more than one in five (22 per cent) being unaware what their total expenditure accounted for until they have recieved their monthly credit cards and bank statements, continuing such a habit may see these people developing problems in making repayments on personal loans and credit cards in later life.
Financial difficulties could become even more pronounced for the 36 per cent of those attending university who have less than 1,000 pounds saved before starting higher education.
Commenting on the figures, Neil Munroe, external affairs director for Equifax, said: "It is expected that more than 400,000 students will start university this autumn. However, the cost of pursuing a degree continues to rise, with our survey showing that students really struggle with debt on a day-to-day basis. Worryingly, 40 per cent claimed to hide debt from parents and partners, but burying their head in the sand won't help. It is probably more important for students, than almost any other sector of society, to be proactive when it comes to dealing with their finances."
In addition, the company reported the average student starting a three-year undergradute course this autumn could be some 30,000 pounds in debt by the time they graduate in 2010. Over this period, the typical student will spend between 39,000 and 45,000 pounds.
"Young people shouldn't miss out on the opportunity to go to university because of the cost. But it means they have to be more financially savvy than ever. With a little preparation and careful budgeting, students can avoid getting into financial difficulty, securing the future of their finances as well as their education," Mr Munroe added.
He also asserted that unless young people are able to get their capacity for money management "on an even-keel at this stage of their life, they could well be catching up for a very long time" Consequently, to avoid developing an untenable debt situation both while they are in education and post-graduation, the firm urged that students should draw up a budget tracking their incomings and expenditure. By having a set idea of how much expenses such as tuition fees, living costs and transport will see them back, Equifax reported that people should be able to get a better grip on their spending.
In addition, those who choose to borrow money, whether this be through plastic cards or personal loans, were advised to make sure they keep up with demands for payment. Should they not do so however, the company warned that borrowers could discover that their financial history is damaged, so reducing their access to cheap loans in the future. Equifax pointed out that many students who use credit cards to fund their spending "end up paying thousands in interest and late payments". However, those who find that they are becoming unable to manage their finances were advised to seek guidance from a professional advisory service or their university's student welfare officer.
Such sentiments were echoed earlier this year by Joanne Gill, head of marketing at Chiltern Debt Management. She claimed that those people who seek advice on managing their personal loans and other types of debts are often treated "sympathetically and positively". Meanwhile, should consumers still find that they are struggling to meet various demands on their finances after graduating, applying for debt consolidation loans could well be an advisable move. Doing so could see borrowers consolidate numerous debts into a single low-rate repayment.
77415
Older People 'Looking To Achieve Travel Dreams'
The post-war generation are increasingly looking to make the most of their retirement, a new set of figures has revealed.
In research carried out by Bradford & Bingley, many people who are beginning to approach the retirement age are wishing that they had gone abroad more often. According to the company, nearly half (48 per cent) of those over the age of 55 claim to have wanted to travel abroad more often. Meanwhile, just under a fifth of consumers surveyed have revealed a desire to either live or work abroad.
However, findings from the company showed that such people are now taking the oppourtunity to go travelling, with the taking out of a cheap loan one possible way in which to fund such plans. According to the firm, the over-50s account for more than a third of all journeys made abroad by Britons, as "there's no stopping globetrotting grandparents or restless retirees".
Paul Whitlock, head of savings for the financial services firm, said: "It appears many over-55s do have something they regret, but in most cases it is not too late to do something about it. Putting money aside and making it work for them means they are one step closer to realising their dreams, whether this be travel to exciting destinations or making a more permanent move abroad."
In addition, the firm pointed to research revealing that the majority (57 per cent) of Britons owning property abroad are over the age of 55. And with Bradford & Bingley suggesting that this proportion could be set to increase even further as more people choose to live overseas every year, taking out a personal loan could well be one advisable way in which to meet the costs of making such a purchase.
The study also uncovered that a significant proportion of the over-55s have regrets about their current monetary standing. More than a third (37 per cent) state that they wish they had started saving earlier on in life - which in doing so could have seen many find themselves in a better position to meet demands for payment on personal loans, utililty bills and other sources of spending. Meanwhile, 27 per cent of those questioned expressed that they would have liked to have begun setting money aside for a pension scheme before they actually did so.
Consequently, 18 per cent of those surveyed reported that if they had the opportunity to go back in time and modify any aspect of their life it would be their finances. This compares to the 17 and nine per cent of respondents who pointed out that if they could change anything then it would be their health and main relationship respectively.
However, consumers of all ages have recently been warned that should they not lend enough time towards thinking about how they are to finance going abroad they could find themselves experiencing monetary difficulties. The news comes as research carried out by Lloyds TSB shows that young people struggle to manage spending while on holiday, as 32 per cent look to borrow cash from their friends and loved ones while a quarter of teenagers claim that they will phone home to get their parents to send them more money.
Philip Robinson, head of debit cards and travel services for Lloyds TSB, suggested: "Parents are understandably nervous about picking up the bill for their children's fortnightly holiday excesses." And with a fifth of teenage tourists taking up to 1,000 pounds away with them in spending money, it is possible that paying off their children's debt may see mums and dads struggle to meet repayments on their own borrowing, for instance personal loans and credit cards.
77414
In research carried out by Bradford & Bingley, many people who are beginning to approach the retirement age are wishing that they had gone abroad more often. According to the company, nearly half (48 per cent) of those over the age of 55 claim to have wanted to travel abroad more often. Meanwhile, just under a fifth of consumers surveyed have revealed a desire to either live or work abroad.
However, findings from the company showed that such people are now taking the oppourtunity to go travelling, with the taking out of a cheap loan one possible way in which to fund such plans. According to the firm, the over-50s account for more than a third of all journeys made abroad by Britons, as "there's no stopping globetrotting grandparents or restless retirees".
Paul Whitlock, head of savings for the financial services firm, said: "It appears many over-55s do have something they regret, but in most cases it is not too late to do something about it. Putting money aside and making it work for them means they are one step closer to realising their dreams, whether this be travel to exciting destinations or making a more permanent move abroad."
In addition, the firm pointed to research revealing that the majority (57 per cent) of Britons owning property abroad are over the age of 55. And with Bradford & Bingley suggesting that this proportion could be set to increase even further as more people choose to live overseas every year, taking out a personal loan could well be one advisable way in which to meet the costs of making such a purchase.
The study also uncovered that a significant proportion of the over-55s have regrets about their current monetary standing. More than a third (37 per cent) state that they wish they had started saving earlier on in life - which in doing so could have seen many find themselves in a better position to meet demands for payment on personal loans, utililty bills and other sources of spending. Meanwhile, 27 per cent of those questioned expressed that they would have liked to have begun setting money aside for a pension scheme before they actually did so.
Consequently, 18 per cent of those surveyed reported that if they had the opportunity to go back in time and modify any aspect of their life it would be their finances. This compares to the 17 and nine per cent of respondents who pointed out that if they could change anything then it would be their health and main relationship respectively.
However, consumers of all ages have recently been warned that should they not lend enough time towards thinking about how they are to finance going abroad they could find themselves experiencing monetary difficulties. The news comes as research carried out by Lloyds TSB shows that young people struggle to manage spending while on holiday, as 32 per cent look to borrow cash from their friends and loved ones while a quarter of teenagers claim that they will phone home to get their parents to send them more money.
Philip Robinson, head of debit cards and travel services for Lloyds TSB, suggested: "Parents are understandably nervous about picking up the bill for their children's fortnightly holiday excesses." And with a fifth of teenage tourists taking up to 1,000 pounds away with them in spending money, it is possible that paying off their children's debt may see mums and dads struggle to meet repayments on their own borrowing, for instance personal loans and credit cards.
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