The recession has pushed many Brits to the absolute limit as they struggle to meet bills and debts without credit and without any opportunity for wage increases.

In fact, according to Bright Grey, 39% of people would be in trouble if they had to find just £50 extra each month – this is worrying because just one credit card payment hike or one extra bill may tip those past their limit. Also, as many as 12 million Brits are currently struggling to cope with their monthly bills as it is. If bills were to increase by £50, this could rise to 18.8 million.

The average Brit spends £1,378 each month on essentials – equating to 68% of their average individual income. But more than half the population would find themselves in money trouble if their bills rose by just £100 a month, according to the insurer.

Roger Edwards, proposition director at Bright Grey says: “The report reveals the average Brit is just £155 away from a money meltdown. The frightening truth is that many Brits are already struggling to afford their monthly bills – and all it would take is a small increase in bills or drop in income for people to find themselves in trouble.”

These figures are not a great deal in the grand scheme of things, particularly when you consider how low interest rates are at the moment and how they are expected to rise again. But only just scrapping through the month not leave a lot of leeway if bills were to increase, and it certainly doesn’t give borrowers much chance to begin repaying debt – for many, their situation can only get worse.

That’s why consolidation loans could be so helpful to Brits who just can’t keep up. By using their home’s equity, they can take out a secured loan and pay off all of their debts in one go, leaving them with just one manageable loan at a lower rate. They can then begin to save rather than spend and work towards paying off their debts.

SOURCE: Bright Grey, 24/09/09

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If you are worried about your financial future during this recession the first thing to do is to stop worrying – you will be able to find solutions to any secured debt problems with a positive, can-do attitude and a new saving plan.

Unfortunately not everyone is so confident – in fact, according to Scottish Widows, people’s confidence in their own finances has also been dampened, with more than a third of people saying they are negative about their long term finances compared to last year. There are similar levels of concern about day to day cash flows – with 37% admitting they feel pessimistic about their short-term finances.

When it comes to our personal worry-ometer, physical wellbeing is a key concern for people, with less than half feeling optimistic about their long term health. However it’s not all doom and gloom, with two thirds saying they feel optimistic about their family life – proving that even though the economy continues to struggle, people still feel good about their family.

Also, two thirds of people admit to feeling pessimistic about the current economic situation – with just one in ten proclaiming they feel positive in their outlook for the economy.

Alison Morris, head of commercial management at Scottish Widows comments: “It’s not surprising that the nation is feeling downbeat considering the economic turmoil that the country has been through in recent months, but this could also be the ideal time for people to review their finances and really sort out their priorities.

“No one wants to live in fear about their day to day cash flow, so if anyone can afford to put some money aside for a rainy day then they should start as soon as possible. Although green shoots may be starting to emerge from the recent economic turmoil, the downturn of the past year should be the wake up call people need to start taking their finances in hand.

“Anyone worried about their longer term finances and retirement should stick to the golden rule and try and save 12% of their income. It might seem like a lot now, but it will be worth it in the long run. If you follow this rule your concerns over retirement savings will start to reduce.”

SOURCE: Scottish Widows, 10/09/09

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The Government has pledged to help those who are struggling with credit card and loan debts and will crack down on any credit firms encouraging unsecured debt.

Gordon Brown met with campaign groups and debt advice agencies and promised a White Paper on consumer rights that would make sure that those with debt problems would be protected.

Laws will be written to prevent credit card companies from raising credit limits and sending out credit card cheques to households unless they have been specifically asked for. Also, any borrowers who have already got themselves into dangerous levels of debt can also expect more leniency in regards to repossession and criminal action. New measures will also allow people on low incomes to write off their debts and start again after a year.

Teresa Perchard, director of policy at Citizens Advice says: “This package of measures shows the government has been listening to people’s concerns and is responding to the problems they are experiencing as a result of the downturn. It will also help encourage more responsible lending, for example by a ban on raising credit card borrowing limits where this has not been requested and a ban on unsolicited credit card cheques.”

Peter Vicary-Smith, chief executive of Which? says: “Credit card companies have been allowed to get away with encouraging people to spend more than they can afford for far too long. Sending people unsolicited credit card cheques and extending their credit limits without being asked, in the hope of tempting them to overspend, is not just irresponsible – it’s immoral.

“Stamping out these toxic credit practices is a clear victory for consumers. If the Government moves quickly to stamp out these temptation tactics, it will send a clear message that there is no going back to the irresponsible lending of the past.”

SOURCE: CAB, Which?, 17/03/09

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More than two-thirds of Britons have at least one credit card, which isn’t necessarily a bad thing, but it is a concern when you find that the average outstanding credit card debt in the UK currently stands at huge £3,256.

Abbey has found that less than a quarter of the nation’s total credit card debt is currently on a 0% deal, which means Britons are needlessly paying out more than £9 billion pounds in credit card interest each year. The biggest problem with unsecured debt is the rates of interest – if you can barely keep up with the high rates, the chances of reducing your debt is small.

Abbey also found that while 36% of credit card holders have no existing debt or pay off their balance in full each month, more than 40% of people have held their credit card debt for over a year and more than one in five for over four years. The longer you have unsecured debt, the greater the rate of interest the greater the chance of slipping into costly arrears.

Callum Gibson, head of Credit Cards at Abbey, comments: “By transferring an outstanding credit card balance Britons could save an average of £443 a year, a huge cost saving in today’s difficult economic climate.”

One way of transferring the debt is to consolidate it by using the equity in your home. Credit card debt is bad debt because the rates of interest are high and the repercussion when defaulting are harsh. Using the equity in your home means you could reduce your repayments by a huge amount and you will be safe in the knowledge that you only have one debt to worry about.

SOURCE: Abbey, 13/03/09

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New research from uSwitch.com has found that 6.5 million households are in debt to energy suppliers to the tune of £820m – more debt that needs to be secured before more bills follows.

The average amount owed has £126 – and over half of those in debt to their energy supplier owe more than they did this time last year. And it’s likely to get worse. 2008 saw energy price hikes of 42% or £381, however many customers have only just started to see these increases reflected in their monthly direct debit payments.

Ann Robinson, director of consumer policy at uSwitch.com, says: “Despite energy prices now starting to fall, almost a third of direct debit households have only started to feel the impact of last year’s price hikes within the last few months. Not only has this raised concerns over affordability, but it also suggests that energy debt is likely to continue to grow as so many households will be playing catch up.”

Energy bills are crucial, obviously, but if you are playing catch-up with them, other bills may suffer. You may have to miss out on a car loan payment to cover them, or a credit card repayment. And then this will lead to penalties or fines on those debts, which will lead you to have to miss other debts, like store card repayments and insurance bills. This could snowball, and before you know it you have a host of arrears, missed mortgage payments and you cannot keep up with any of them.

Don’t let bills get the better of you. Use your home’s equity to clear your name, get back in the black. Using a secured loan will mean you are paying a much smaller rate than you would if you were paying penalties and fees on other debts.

SOURCE: uSwitch.com, 10/03/09

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Recent statistics from the Insolvency Service has found that personal insolvency has risen by 18.5%, meaning more people are letting debt get the better of them.

John Fairhurst, managing director of Payplan, says: “The increase in individual insolvencies can be explained by three major factors: the lack of available credit leading to already indebted individuals ‘falling off the cliff’, lenders encouraging their customers to look at the whole of their financial situation and seek independent help for their debts and the current economic crisis, leading to previously financially sound individuals unable to handle their debt commitments.”

In many of these cases the borrower is already ‘falling’ – they have let their problems get the better of them and have got into a situation where no financial adviser of money lender will be able to help them. The key is to get advice and help long before the situation gets too bad. Talk to your lender and talk to an adviser and see what can be done to avoid the worst.

Fairhurst adds: “This January alone, we have seen a 14% jump in the number of overindebted consumers seeking help from Payplan. This number was by a huge increase in the number of debtors referred by lenders. This huge increase in calls resulting from lender activity shows a demonstrable commitment to responsible lending and treating customers fairly.”

This is a good sign – lenders are ready to work with those in debt. This means there will be more opportunity for financial help in the form of remortgages, equity release and secured loans. The lenders do not want borrowers to get into difficulty – they want them to talk to advisers, debt specialists and mortgage brokers to help clear up any financial messes for good.

SOURCE: Insolvency Service, Payplan, 06/02/09

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

If you are having a tough time keeping up with all your financial demands, maybe it’s time to consider consolidating some of your debts using a secured loan.

According to moneysupermarket.com, more than three-quarters of Brits struggle to pay their utility bills; it’s getting so bad that one in six people is left shivering as they can’t afford to heat their home this winter.

Scott Byrom, utilities manager at moneysupermarket.com says: “Our research shows that people are now resorting to drastic measures by not turning on their heating at all because they can’t afford it. It’s clear to see that sky-high energy bills have been far beyond what people can afford.”

Many of these people may not be able to pay their bills because they are over-stretched: maybe they have a few credit cards, a store card or two and even some personal loans. All these things can add up, especially with little chance of a pay increase or bonuses this year. That’s why, if you are at home shivering because your gas bill is the final straw, you need to consider consolidation.

Using some of your home’s equity you can pay off all those debts, leaving you with your mortgage and a secured loan to meet at the end of the month. This will give you space to save, room to breathe and some extra money to afford to turn up the radiators and start living a decent life again.

SOURCE: Moneysupermarket.com, 30/01/09

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

If you have come into the New Year with debts all over the place your resolution must be to clean up your finances and become debt free.

The year ahead isn’t going to be kind to those with debts – credit card rates will not fall, neither will personal loans. And mortgages will not suddenly become a whole lot cheaper. And refinancing will continue to be as hard as it was in 2008 – the credit ‘merry-go-round’ is over and the only option is to get rid of debt, not amass it.

And what is the best way to get rid of debt as quickly as possible? Consolidation. By taking all your smaller debts – your credit cards, your loans and your store cards – and turning them all into one debt, you save money. You will only have one repayment rate, one bill at the end of the month and one mountain to climb, not five or fifty debt mountains.

The very best source for consolidation is your home’s equity. Using this in the form of a secured loan will allow you to say goodbye to all your debts in a safe way – the money is attached to your home, so the rate is lower and you have security on your side.

So make your resolution to become debt free in 2009. It won’t be a quick fix, and it will take work, but it needs to be done, and it can be done.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

If you are thinking of burning plastic this Christmas, try to think of how bad your financial hangover could be in 2009.

Moneyexpert.com has found that the number of people applying for interest-free credit cards surged by more than 15% in November as cash-strapped shoppers rushed to put Christmas on plastic.

Even so, its research also shows 30% of adults are concerned about their ability to manage their personal debt and that 27% of those owing money have gone further into the red in the last three months. This is thanks to 0% cards that allow them to spend, spend, spend before they are hit with hefty repayments later on.

Around 4% – equivalent to nearly 1.8 million people – have increased their debts by more than 20% in just three months, says the website.

Sean Gardner, director of MoneyExpert.com, says: “It can make financial sense to cash in by taking out interest-free cards and then paying them off. But Christmas tends not to be a time for sensible financial planning and the UK economy has been detached from reality for quite a while now.

“The fear must be that people are having one last turn on the credit card merry-go-round before it comes grinding to a halt.”

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

Borrowers who feel tempted to ignore serious financial difficulties until after Christmas will be putting off the inevitable and find themselves deeper in debt in the New Year – the need for consolidation couldn’t be more apparent.

IVA.com received nearly as many enquiries from worried borrowers in October as last January – which is renowned for being by far the busiest month of the year for debt advice – indicating that this New Year is likely to see even more people asking for help than ever before.

Terry Balfour of IVA.com says: “As the nation contemplates a less extravagant Christmas, many people whose debts have got out of hand are in real hardship – and that’s something that is very difficult to face up to at this time of year.”

IVA.com is right – it is tough to face it if you have debts, but it is crucial not to let them get the better of you. And a secured loan can make sure that doesn’t happen. A secured loan can help cancel and consolidate debts into one loan, making your life easier and making the debt problems a thing of the past.

Of course this option is not for everyone with debts – but what is or everyone is some good, professional financial advice. Whatever your situation, if you need a secured loan or not, get a financial check up from an adviser.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.