According to research carried out by LV=, Brits are doing all they can to make sure that they are able to stay in their homes, even with bills and repayments looming over them.

It found that just over half of homeowners say they would take on a second job to help meet their mortgage payments, and four in ten would withdraw some or all of their life savings to make ends meet. Almost a third would even be prepared to sell off the family silver.

One in five homeowners would be prepared to take in a lodger to help pay the mortgage and almost as many would rather go cap in hand to friends than face repossession. One in ten say they would move out and rent their property to someone else, if that was necessary to be able to cling on to ownership.

Chris McFarlane, LV= head of protection, says: “The financial turmoil of the last year has done nothing to dampen our national obsession with home ownership. It’s fascinating to note just how far people would go to avoid having to give up the keys to their castle.”

Yet fewer than one in ten homeowners have insurance that would pay their mortgage repayments and other regular outgoings over the long term, in the event of a sudden loss of income. By having insurance to cover your debts and your home you could be sure that whatever happens, your home is safe.

While just over a third of homeowners have some kind of mortgage protection in place, most of them have simple mortgage payment protection insurance, which often only covers mortgage payments over the short term says LV=. Less than one in ten homeowners have more comprehensive income protection insurance that could cover their mortgage and other living expenses over the long term not just for a limited period.

McFarlane says: “We need a sea change in the way we view threats to our homes. We install locks and alarms because we fear burglary and we have buildings insurance to protect the property structure. But typically we don’t protect the regular income that we need to be able to maintain over the long term to pay for our homes and other living costs. Proper income protection can cost as little as 50p a day, which in the current climate should be food for thought for everyone.”

SOURCE: LV=, 19/08/09

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If you used your credit card today did you ask yourself if you could really afford what you bought? If the answer is no then you need to start thinking about a life without plastic.

For many years people have been ‘putting it off by putting it on the card’. They have been living for today, hoping to pay for it tomorrow. Well now, in this new post-credit crunch world, it is tomorrow and it’s time to begin paying back your unsecured debts.

Because there are no more chances for those who spend beyond their means. The world almost came to a standstill thanks in part to people spending more and more on their credit cards, on loans and on store cards. They remortgaged, took out secured debts and carried on. But house prices have bottomed out and lenders are now saying no to refinance. The party has ended and people have to begin to look at ways to pay off their debts, safely and with the long-term in mind.

This starts by getting some professional help. Promises of quick-fix credit and adverts promising that you do not have to pay off your debts are stupid at best, criminal at worst – the only way that debt can be reduced and cleared is careful saving and sensible use of secured equity.

So talk to a Financial Services Authority regulated adviser who, by law, will only give you the correct answers. If you cannot get more credit, then they will tell you so, but they will then help you explore the alternatives.

Because there are always alternatives – there are always ways in which you can begin to wean yourself off the plastic and begin moving into the black. It might take a long time and it might not be easy, but with some professional advice it is possible.

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

The debt problems faced by millions of Brits are still growing – if you want to be rid of your unsecured debt and reduce your secured borrowings then the time to act is now.

Debt charity Credit Action has found that the total UK personal debt at the end of June 2009 stood at £1.45 trillion. And while this has slowed by 1.2% in the last 12 months, debt levels are still at unsustainable levels.

Total secured lending on dwellings at the end of June 2009 stood at £1.22 trillion, which means hundreds of billions of pounds are still owed on credit cards, store cards and personal loans – in fact consumer credit lending grew by £100m in June alone.

Without mortgages, the average British household debt is around £9,240, and this figure increases to £21,480 if the average is based on the number of households who actually have some form of unsecured loan.

This has to be reduced. If you think your debts are getting too much then you need to act now. Talk to a mortgage adviser about turning your unsafe unsecured debt into some form of secured debt. You may want to be debt free, but it takes time to pay off and by turning it into secured finance then you will have more time and space to begin paying off your debts.

The time to act is now – Credit Action says every 10 minutes someone is repossessed, and one person every 4.35 minutes is declared bankrupt or insolvent. This isn’t surprising when you see that £182m is paid in interest in UK daily. So act now before it’s too late and get off the debt pile. With some professional help you can begin creating a debt-free future for yourself.

SOURCE: Credit Action, 31/07/09

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The latest UK debt figures have found that the total UK personal debt at the end of March 2009 stood at £1.459 trillion, a huge debt problem, but one that is slowing down.

CreditAction, the debt charity, has calculated that debt figures have slowed further to 2.2% in the last 12 months which equates to an increase of just £28bn compared with the increase of £116bn in January 2008.

Total consumer credit lending to individuals at the end of March 2009 was £232bn. Thankfully this has also continued to fall by 3.2% in the last 12 months. CreditAction found that total lending in March 2009 grew by £0.9bn and secured lending grew by £0.8bn in the month.

But these numbers are still astronomical; the average household debt in the UK is around £9,280, excluding mortgages. Also, this figure increases to £21,580 if the average is based on the number of households who actually have some form of unsecured loan.

The only way to reduce debt is to find ways to pay it off, and that isn’t easy if you owe more than £9,000. You need to consolidate and plan a way to pay off the debt as best you can. Using your home’s equity is a great way of doing this – it turns several costly loans into one, affordable loan. This means you have time and space to clear the debt.

Debt is slowing, which shows people who do owe money are seeking ways to slowly turn the tide. But the UK isn’t out of the woods yet, it’s going to take a lot more hard work and sacrifice. But it’s worth it – if you eventually find yourself debt-free it will be the best feeling in the world.

SOURCE: CreditAction, 01/05/09

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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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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

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Almost a third of UK couples who argue over finances have had more frequent arguments as a result of economic turmoil, showing that money worries are fraying relationships more than ever.

But there is some good news – nearly one in five couples say that the recession has prompted them to talk more openly about their finance, according to research from online payment provider PayPal. This willingness to talk openly about money will almost certainly help the one in ten couples who have seen the main breadwinner in their relationship change in the last twelve months. Almost two thirds of these couples have changed breadwinner because one of them has either lost their job or had a pay cut, while over a third have switched places following a new job, promotion or pay rise.

Carl Scheible, managing director of PayPal UK, says: “As the recession becomes reality, British couples are facing new challenges within their relationships. It’s good to see that difficult times are prompting us to talk about money, as it’s far easier to cope with financial worries when we’re open with each other about them. It’s also good to see that even in these uncertain times money is causing fewer arguments within couples in Britain than in many other countries, such as the United States and Australia.”

This research proves ones thing – talking about your money problems is much more constructive and rewarding than bottling them up. If you are hiding problems, talk to your partner and your friends, but also get some professional financial advice. Things might look black now, but once you get things out in the open you will suddenly realise you have options to solve your problems.

Remember, a problem shared is a problem halved – an adage that is important during this difficult time.

SOURCE: PayPal, 10/02/09

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UK personal debt swelled to a huge £1,456bn in November 2008 – proving more than ever that the unsecure debt bubble must be let down gently before it pops.

According to the charity Credit Action, this huge was an increase of £56bn on 2007 figures – meaning personal debt has now forged ahead of the UK GDP.

The only way people are going to be able to control this unrelenting mountain of debt is by consolidating and taking sensible steps towards securing and controlling the red.

Worryingly, the daily increase in UK debt is now a whopping £154m, with one person every 4.8 minutes being declared bankrupt or insolvent – and that’s no surprise when you find out that the UK is paying £252m in interest alone.

This has to change, and it can. If you are one of those who are part of this huge debt, take steps to secure all your responsibilities with a secured loan – you will find almost immediately that your life is much better knowing you are not paying nearly as much as that daily £252m. You will also be able to sleep a little better knowing your house will be safe, and you will not be one of the nearly 300 made bankrupt every day.

Debt is an ever-growing, dangerous thing. Don’t let it control you – control it instead with a secured loan.

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

More than 7.5 million Brits prefer to use their credit cards for day-to-day purchases over cash, according to Sainsbury’s Bank.

The supermarket lender found that £3.64bn is spent on their cards every month. The average monthly spending figure for a typical everyday credit card user is £483, but some 1.41 million everyday card users regularly put £750 or more of their overall monthly expenditure on their credit card.

There is nothing wrong with using unsecured debt if it is regularly paid off, every month – in fact it helps your credit score. The problem comes if something goes wrong – a sharp reduction in earnings, for example – means a credit card goes unpaid and unsecured debt begins to rise.

Donald MacLeod, head of Cards at Sainsbury’s said: “Although we’d never advocate people using their credit cards for everyday inexpensive purchases if they are likely to incur interest, we’ve identified a number of people who clearly like to use their credit card in the same way as they would cash or debit cards and who pay off their balances each month.”

If you handle your credit card each month, reassess your finances and predict what could happen if you were unable to pay off your card. How much would you have to pay in interest? What are the implications of a missed payment? How much more would you rely on the card as time goes on?

We never like to think of the worst, but anything can happen during this tough time. Talk to your financial adviser and see what they can do to help you plan for any eventuality.

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