October 2013

The language of loans

Despite the cuddly, cartoon ads you see and hear everywhere for loans, borrowing money is deadly serious.  And despite what they say in the ads, they are not easy to understand. 

The top line may be straightforward – “borrow £100, pay back £139 in 30 days’ time” or “Apply now for our low 4.9% APR representative* personal loan” – but the detail of all loans are incredibly complex (that asterisk is always a warning sign of trouble ahead...).

Following in the family’s financial footsteps

A new study from the Money Advice Service has put hard numbers to something that has been very clear to everyone working in financial education for a long time – that young people’s approach to handling money is “heavily influenced” by their parents’.  The study demonstrates that the harder a family finds coping with their finances, the less confident a young person is at handling their own money.

Which? targets sky-high overdraft costs

A new campaign has been launched by Which? aimed at persuading regulators to target high levels of fees and interest rates charged by some mainstream lenders.  The campaign is spotlighting overdrafts in particular, where, as we have pointed out in the past, interest rates can be as high as those of payday lenders.

Facing retirement in debt

People facing retirement in the next ten years are struggling to clear their debts and save, according to research from insurance and pension company Aviva’s Real Retirement Report.

Forty per cent of those in the 55-64 age bracket are not able to save regularly – and for those who can put money away each month, the average amount has dropped by 15 per cent from £39 t0 £33.

The myths of credit checking

We read constantly in the media about how easy it is to access our personal information, so it is hardly surprising that most people assume that credit checking by loan companies is comprehensive and thorough.

You fill out an online loan application form and instantly the computer wizardry of which they are so proud checks your story and confirms you are a suitable person to receive £500. Isn’t that what happens?

Not true.  Not by a long way.

Bringing payday lending under control

The announcement by the new Financial Conduct Authority (FCA) of proposed new regulations for the payday lending industry brought a qualified welcome from all sides.

There were five key proposals, which would require firms in the high-cost short-term credit sector to: