December 2013

Homeowners to be pushed into severe debt when interest rates rise, says think tank

New research from the Resolution Foundation suggests that at least a million British families, and possibly as many as two million, could be spending more than half their disposable income on mortgage and credit repayments by 2018. 

The current number of people with that much of their income committed to repayments is likely to double to 1.1 million when, as is forecast, interest rates start to rise.

Sales spending aftershock?

Whether you see it as consumer confidence or reckless overspending, the £2.7billion that flew into the tills on Boxing Day will have meant one thing for certain – the vast majority will have been on credit and much of that will have been simply unaffordable.

Halifax Bank reported on Twitter that on Boxing Day 2,500 people applied for a new overdraft or extended an existing one, and 1,400 applied for a credit card online.  And that’s on top of the average of around £3000 that is owed on the UK’s credit cards.

More men calling Samaritans about money worries

The Samaritans have reported a significant increase in the number of men calling about financial worries, despite a slight drop in the total number of calls about money problems since 2012.

Of those talking about money worries, about a quarter mentioned debt specifically – a slight drop; however almost a third mentioned housing, up from just under a quarter last year.

Money secrets putting family finances at risk

A couple of generations ago it was commonplace for a working husband not to tell his home-based wife how much he earned. And it appears that secrecy about finances is still blighting peoples’ lives.

A survey by Prudential of couples over the age of 40 suggests that 22 per cent hid debts worth on average £7,800 from each other.  Almost half said they had borrowed to cover everyday living costs.

Just over a quarter of the respondents also said they had savings they had kept secret from their partner – and average stash of £4,000. 

The hard facts on children’s exposure to payday lending advertising

News scrolls past so quickly these days that sometimes we have to press the pause button in order to properly digest a significant fact.

And this week, that fact is this: children in the UK between the ages of four and 15 are estimated to have watched a total of 596 million payday loan advertisements on television in 2012 – an average of 70 each. 

Almost 18 million of those “impacts” – the times when an individual child saw an ad – were on children’s TV channels.

Halifax credit cards to attract automatic interest rate rises

Credit card customers at Halifax and Bank of Scotland will see their interest rate rise or fall automatically in line with Bank of England base rate rises from February next year. 

In a move seen as “unusual” in the industry, Halifax has written to customers to say that when a change in the base rate is announced, it will be passed on in full.  The new rate be introduced at the end of the month in which the rate change is announced.

Landlords and tenants urged to build better relationships

Landlords and tenants should build better relationships and a better understanding of each other’s financial circumstances, according to the National Landlords Association.

A survey of its members suggested that some 40 per cent of landlords are financially vulnerable if tenants miss just one payment.  And very small scale businesses – so called “accidental landlords” – are particularly at risk.