May 2012

Lending on credit cards down as consumers pay off debts

New figures from the Bank of England show that in April this year, borrowing on credit cards contracted by the highest monthly amount since August 2006.   Card repayments outstripped new borrowing by £118 million as consumers paid back debts

However, borrowing continued to rise via loans and overdrafts, increasing by £1.4bn.  This was in line with the previous six months, according to the new report.

Separately, there is some evidence that people are using their savings instead of borrowing.

Retirement retreating as financial pressures grow on the over-55s

Only a third of people stopped work when they reached the state pension age in the 12 months to February this year, according to new figures from research company Mintel.  This was a drop of 48 per cent on the previous year.   

Only one in eight of those questioned said that they had retired because they could afford to last year – demonstrating the financial pressures facing the majority of those reaching their official retirement age.

New payday lenders' code of practice welcomed, but must go further

National debt advice charity Debt Advice Foundation has welcomed the new code of practice for the payday and short-term loan industry, but warned that the Government must find a way to tackle the worst offending payday lenders who are not signed up to the code. 

Free banking is a myth, says Bank of England executive director

Andrew Bailey, an executive director at the Bank of England who is about to become chief executive of the new Prudential Regulatory Authority (PRA), has described free banking as a “myth” that “encouraged the mis-selling” of products such as payment protection insurance.

The PRA is one of the organisations that will replace the Financial Services Authority. It will be part of the Bank of England and will regulate banks, building societies and insurance companies.

Official figures ignore almost three out of every four insolvent households

New regional insolvency figures are missing the true scale of debt in households up and down the country, according to national debt charity Debt Advice Foundation.  An analysis of calls to the charity’s helpline show that for every Debt Relief Order (DRO), Individual Voluntary Arrangement (IVA) and Bankruptcy in 2011, there were almost three more households with less coming in than going out.

Debt Advice Foundation runner-up in prestigious national awards

Debt Advice Foundation was delighted to be named a finalist in this year’s Credit Today Awards – the first time the charity has entered what are seen as the most significant awards for all those working in and around the credit industry.

Our success, in the Money Advice Initiative category, was acknowledgement of our education programme, which is focused on a ground-breaking peer-to-peer schools financial education project developed with Southlands High School in Chorley, Lancashire.

Unexpected rise in consumer savings in first three months of this year

UK consumers’ savings in easy access accounts jumped by 18 per cent during the first quarter of 2012 - the first consecutive quarterly rise since ING Direct’s consumer savings monitor began in 2009, according to its latest report.

Average savings now stand at £1,858, up by £284 on the last quarter of 2011. The rise is attributed mainly to careful spending by consumers; however it is estimated that about a third of those who have received or are claiming refunds following Payment Protection Insurance mis-selling, plan to save their windfalls.

Debt charity warns downward trend in personal insolvencies could reverse

Latest figures from the Insolvency Service show that there has been a decline of just over one per cent in personal insolvencies in the first quarter of 2012, compared with the last three months of 2011.  However Debt Advice Foundation has warned of worrying signs that this trend could be set to reverse.