May 2013

Payday lenders should face stronger action by regulators, say MPs

The House of Commons Public Accounts Committee has condemned the Office of Fair Trading as “ineffective and timid” in its dealings with the payday loans industry and door-to-door lenders.

The committee has highlighted unscrupulous practices at what it calls the “shabby end” of the UK’s credit sector, and pointed to the fact that no fines had been handed out to any of the 72,000 companies and only a handful of licences revoked.

The rising tide of female insolvency

A new analysis of Government figures shows that for the first time, more women in England and Wales are set to declared insolvent* than men.  And in 2011, two thirds of insolvencies among 18-24 year olds were women.

New calculations predict more than eight out of ten students will never pay off their loans

Government figures have suggested in the past that 60% of students would earn enough to be able to clear their loans during their working life.  But new research, carried out following changes made last year on the amount of interest charged on outstanding student loans, claims that around 85% will fail to pay off their student loan debt. 

The new figures were commissioned by the Mail on Sunday, and suggest that when the student loan debts are written off after 30 years they will create a new financial burden for the country.  

Debt adviser among the best in the country

Debt Advice Foundation’s Justine McGinnis joined other credit industry professionals at an awards ceremony to honour some of the best in the business.

She reached the finals of the prestigious Credit Today awards, which were held amongst the chandeliers and grandeur of London’s Grosvenor House Hotel.  More than 180 entries were submitted for the 23 awards, and 1400 professionals from the credit industry attended the finals to cheer the winners.

More families resort to savings or borrowing to meet food bills

Latest figures from Which? suggest that as many as five million households either dipped into their savings or borrowed money to pay for food during April.

Out of this group, almost half (45 per cent) are low income families – with £21,000 or less coming in per year – and more than 80 per cent of them said they were worried about the cost of food.

The debt fall-out of interest-only mortgages

Research from the new Financial Conduct Agency (FCA) suggests that more than a million people who have interest-only mortgages have no plans in place to pay off the principle. 

The first wave of these are likely to be people who took out endowment mortgages which failed to make enough money to cover the cost of their loan; they are now facing retirement with much of the cost of their home still outstanding.