Finance Matters

• 11Aug

  Rising Cost of Back to School for Parents

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  From IVANews:

  The school holidays are now under way and national charity Citizens Advice issued a  warning  this week that there is an even bigger worry for parents this summer than how to keep their kids occupied for six weeks:  the escalating costs of sending them back to school in September.Despite the current supermarket price wars on uniform, with total uniform packages available for just £4.75, CAB evidence shows many parents are still struggling because their childrens’ schools insist on expensive uniform only available from exclusive stockists, rather than letting parents purchase these competitively priced generic items from the high street. On top of this parents can face numerous additional costs such as specialist equipment, school trips and ‘contributions’.A survey at the start of 2009 by the Department for Children, Schools and Families (DCSF) echoed CAB evidence and showed that 65% of families on the lowest incomes said they were struggling to meet school costs David Harker,…

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• 11Aug

  Regulation of Sell and Rent Back schemes.

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  From IVANews:

  Shelter, the Housing and Homelessness charity, is calling on struggling homeowners considering using a private sale and rent back scheme to make sure the company they use is regulated before making a commitment about their property. With effect from 1 July 2009 all private sale and rent back companies are required to be regulated by financial watchdog The Financial Services Authority (FSA) or they are operating illegally. Shelter has urged vulnerable home owners to think very carefully before entering any arrangement, and to make sure their company is authorised by the FSA before signing up to any schemes.
  Sale and rent back companies provide vulnerable and struggling homeowners with the chance to sell their home at a discounted price and rent it back. This enables people who may not wish to leave their home to remain and become a tenant instead.
  Last year, an investigation into sale and rent back by the Office of Fair Trading (OFT) uncovered evidence that some scheme operators misle…

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• 27Jul

  Untitled

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  From IVANews:

  This is a busy week for the insolvency industry. The insolvency stats come out this Friday and they will likely show an increase in IVAs and Bankruptcies.
  IVA.co.uk Petition for the abolition of the Insolvency Register
  Full name of petition: We the undersigned petition the Prime Minister to ‘abolish,regulate or limit private company access to the Insolvency Website.
  The petition will now be handed to the government.
  Petition: http://petitions.number10.gov.uk/InsolvReg/
   
  Insolvency Register for some – but not for others!
  Staveley’s name does not appear on the register of individuals authorised and regulated by the Financial Services Authority.
  It seems that there are ways to avoid being on the register (which probably involve having powerful friends)
  Source: http://www.guardian.co.uk/business/2008/nov/04/amanda-staveley-barclays-debts-iva
  Insolvency rate to rise 41% by end of 2009 (for small companies)
  Smaller company insolvencies are set to rise by a “catastrophic 

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• 27Jul

  Credit card use is declining

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  From IVANews:

  With the credit meltdown of last fall and all the fallout in the business since then, it was only a matter of time before you’d get a letter from your credit card issuer phrased something like this.
  “We’re notifying you that the terms of your account are changing.”
  The Hodges house got one of these from Capital One this past week. It’s a Visa with no balance, and we don’t use it any more (part of the credit card purge we and many others have done). The old annual percentage rate (APR) was 12.65 percent for purchases and a 19.74 percent rate for cash advances.
  The letter advised us of a new rate at 17.9 percent for purchases and balance transfers. As with many deals, it’s adjustable and is essentially 14.65 percent added to the prime rate. The default rate, which is triggered when your payment is late twice in any 12 billing periods, will be 29.4 percent.
  It was the rationale that got my attention.
  “Due to extraordinary changes in the econ…

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• 27Jul

  Are IVAs easier to obtain ?

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  From IVANews:

  Banks and other lenders seem to be relaxing their payment thresholds for individual voluntary arrangements (IVAs) and are approving lower-repayment applications for the first time
  Previously, only debtors able to commit to monthly payments of at least £200, paid over five years, were accepted, which is beyond the means of many people. In the past few months, though, creditors have agreed to hundreds of more flexible IVAs with monthly payments of under £200.
  The main IVA selling point, as an alternative to bankruptcy, is that debtors are able to reduce their debts to a single monthly payment and have a legally binding agreement to become debt-free upon completion of the arrangement. From the creditors’ point of view they can claw back a proportion of what they are owed in a relatively short amount of time, and IVAs offer better returns for lenders than bankruptcies.
  While lower monthly payments may be welcome to some debtors who would have been unable to meet a £200 payment,…

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• 27Jul

  Debt Collection Agencies could change ownership

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  From IVANews:

  One in six companies in the UK debt collection agency industry could change ownership as a result of the current economic climate, claims a new study by financial analysts Plimsoll.
  The analysts claim that while a “surprising” number of cash rich competitors wait in the wings, the market could be set for a prolonged period of consolidation. Plimsoll analysed 208 companies with a turnover of more than £1m per annum and the company picked out 64 that it claimed are primed to be taken over.
  David Pattison, author of the new Plimsoll Industry Analysis – Debt Collection Agencies, said: “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market. With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyer’s market out there for cash rich companies.”
  Pattison added: “In the Plimsoll Industry Analysis…

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• 26Jul

  Debt Management Companies should be transparent about fees

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  From IVANews:

  Debt management companies – hired by borrowers to renegotiate terms with their creditors – should be more transparent about their charges, a charity has said.
  A report due out tomorrow from the Money Advice Trust found many debt management firms guilty of poor practice.
  The report, based on research by the Personal Finance Research Centre at Bristol University, says customers are often not told about the fees they will incur until late in the process. Some borrowers even felt they were worse off than before they contacted the debt management company.
  Worrying: Debt problems can cause months, even years, of constant anxiety
  The report also concludes that some companies do not make clear that in addition to an initial set-up charge, ongoing fees eat into the monthly repayments of those borrowers unable to meet former terms.
  Joanna Elson, chief executive of the trust, says: ‘Consumers have the choice to pay for debt advice, but this must be an informed decision.
  ‘We want regul…

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• 02Sep

  IVA.co.uk Survey Reveals One in Four Have Talked About Their Debt Problems

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  From IVANews:

  People are increasingly willing to talk about their debt problems, a new survey by IVA.co.uk has revealed, with over a quarter of adults in the UK (27%) having talked about their money problems with friends and family. Interestingly, the numbers vary greatly in different parts of the country. Londoners are the most likely to talk to have discussed their debt troubles, with £2% having done so, whereas figures are lower in the North (29%) and even lower in the Midlands (18%).
  That people are showing a greater willingness to talk about debt is a vital step in solving the UK’s debt problem. Perhaps, in a strange sense, the downturn in house prices and the heightened cost of living have made it more acceptable to talk about money troubles, as so many people are struggling to make ends meet. Personal debt has been in the news a lot over the past few months, which has helped to break down some of the old taboos; the media, the government and individual debtors are increasingly able to…

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• 02Sep

  Service Industry Sees Biggest Drop in Activity Since 2001

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  From IVANews:

  Britain’s economic woes have hit the high street, new research has revealed, as the service industry has reported consumer spending has dropped to the lowest it has been for a decade. Restaurants, bars and cinemas have seen a profitability drop to the lowest levels since the survey began in 1998, and business volumes have dropped by -44%, the lowest since 2001.
  Interestingly, holiday spending has held steady in the face of a downturn in almost every other service sector. It seems that even in the throes of a severe economic crisis, there’s nothing that can stop Britons from grabbing a little time in the sun. Professional businesses, like law, accountancy and IT have all done well despite (or perhaps because of) the harsher conditions.
  From a consumer debt point of view, the downturn isn’t necessarily bad news. It’s a sign that people are tightening their belts and cutting down on non essential purchases. Statistics earlier in the year suggested that people were…

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• 02Sep

  As House Prices Tumble, High Street Prices Rise

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  From IVANews:

  The gloomy statistics keep pouring in, it seems, and not day goes by without some kind of grim prediction or new revelation about the economic downturn. This week has been no exception – first, the news that the largest majority of retailers in 16 years raised their prices last month, which is likely to further raise the cost of living in the UK. Retailers have had their prices driven up by a downturn in sales and an increase in fuel, food and raw goods prices – the very same increases that are affecting ordinary consumers are also putting the squeeze on the high street.
  The second grim statistic has once again concerned house prices. Nationwide reported this week that prices fell by 2.5% compared to the previous month, the biggest month on month fall since the recession in the early 1990s. Year on year, the average house price fell by 4.4.% to £173,583, the biggest annual drop since 1992. Whatever way you look at it, house prices are tumbling, and they are expected to do so for a…

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