The Big Money Guide

Tag: debt management

Housing Costs Eating Away at Disposable Income

If you ever wonder why you still haven’t figured how to get out of debt after so many years a new study might have the answer: it’s simply because average weekly wages have failed to keep pace with the rising cost of living. Almost everything we buy has suffered from price hikes due to inflation and profit hungry companies – particularly in the last few years.

Research by estate agents eMoov found that the cost of 20 cigarettes has increased by 4,370% over the last 40 years, the Daily Mail newspaper by 3,000%, cinema tickets by 2,133%, postage stamps by 2,067% and house prices 1,879%.

Compare those figures with average weekly wages that increased from £32 in 1974, to £517 today – an increase of 1,616%.

The cost of the average house has gone up from £9,927 to £186,544 since 1974. To place that into perspective: it means that the average worker had to work 310 weeks to cover the cost of the average house (without interest) in 1974. Today the same worker has to work 360 weeks to cover the cost of the same house. To put that differently: the monthly mortgage repayment is gobbling up an ever-increasing share of workers’ income. Conuslt a premesis liablity lawyer for expert advice.

While one could argue that people should be prepared to cut down on cigarettes and entertainment, housing is a basic living expense – and the study shows that it is taking up an ever growing share of the pie, leaving ordinary Britons with less disposable income.

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October 28, 2014
New Tax-Free Pensions Could be Disastrous

A brilliant move that could help to stimulate the sluggish British economy or a mis-selling scandal in the making? The government’s decision to open up pension funds for people over 55 next year so they can withdraw cash from their fund (partly tax free) has elicited mixed responses from industry experts.

Tom McPhail of Hargreaves Lansdown said: “The chancellor appears to be creating the perfect environment for a mis-selling scandal.”

The Treasury insists that its decision, which will come into effect in April 2015, will benefit thousands of pensioners who will be allowed to withdraw money from their pension savings as often as they want, with 25% of each withdrawal being tax free.

Tom McPhail, a pension expert, said that while he supported the move, he must also warn individuals that if the money is re-invested in the wrong way it could end up providing very poor returns upon retirement.

He added that many professionals don’t get it right all the time, so it was inevitable that ordinary investors would get it wrong more often, especially if they acted without a financial adviser.

Chancellor George Osborne also announced that people would be able to pass on their unused pensions to family members tax-free.

Osborne went on to say: “We’ve extended the choices even further by offering people the option of taking a number of smaller lump sums, instead of one single big lump sum.”

From our side we can only warn that using your pension money to get out of debt could prove disastrous in the end. Getting professional debt advice is a much better option.

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October 23, 2014
Debt Management and Collection Qualification Available

Personal debt mismanagement is a growing problem in the UK often affecting individuals who can ill afford to get it wrong. Last year consumer debt in the country increased to a staggering £1.43 trillion! This is one of the reasons why the FCA decided to take over responsibility for the regulation of personal debt.

This situation has of course created a huge market for firms offering debt management advice and services such as debt consolidation, but until now there has been little in the way of training opportunities for individuals working in the field. That has now changed, with students now being able to acquire a formal qualification in debt collection and management. The course is to be provided by IFC University College with the qualification in CertDC (Certificate in Consumer Debt Collection).

The sometimes controversial subjects of debt collection and debt management will no doubt prove to be rather challenging for many students, however, the fact that they will have relevant work experience while they follow a structured curriculum will certainly improve the level of expertise available in the marketplace. This should also serve to improve the image of the industry as a whole.

The vice principal and head of faculty: banking, finance and regulation at the college, Martin Day, stated: “The growth in consumer debt and changes in the regulatory environment have resulted in a need for a new qualification which addresses the key legislative standards and the essential skills for professionals working in consumer debt collection.”

The really good news is that the first group of students commenced the course during September.

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October 9, 2014
11 Top Tips to Save Money

Energy prices are on the up, transport costs are at an all-time high and the food shop just seems to becoming more and more expensive. So, what can we do to cut down on costs and increase our bank balance? Well, these money saving tips just might be the answer.

1. Compare Supermarket Prices

It’s only natural you’d find it easier to head to your local supermarket for your shopping, but this could cost you more money than you need to spend. By going to a competitor, you could discover fantastic bargains that beat your local shop. One way to ensure you receive the best deals is to write a shopping list, browse online at each store’s deals and either order them over the internet or head there yourself. So, next time you need to go shopping, think about whether that extra bus journey could save you a significant amount of cash.

2. Late Deals

Everyone loves a good holiday. Whether you like nothing more than a beach abroad, a caravan park in Wales or sitting under the Aurora Borealis in Iceland, you can trust there’ll be a late deal on offer for you. By securing a late deal a few days before or on the day of your trip, you could potentially save hundreds of pounds. So, put off booking in advance and see what offers are to be had close to your holiday.

3. Buy Used Over New

You don’t have to spend a lot of money to have nice things. While most people love new items, you’d be surprised at the quality of used goods – and they’re a fantastic way to save money. So, next time you need a new DVD or game, head to your local second-hand technology store. Looking for a new TV? Try websites such as ebay.co.uk for a superb deal.

4. Debt Management Services

It’s surprising how many people suffer in silence when faced with debt problems, when there is a simple solution that could eliminate a person’s worries: debt management services. Debt can cause severe depression and stress to a person when it’s not necessary. A professional, experienced debt management company can take care of your debt problems so you can pay back the amount in smaller, more manageable amounts. So, don’t sit there at home panicking, do something about it and approach a debt management company today.

5. Sell Your Items

As stated earlier, websites like ebay.co.uk are a great place for used products, so why not sell your unwanted items here, too? Everyone has unwanted junk littering their homes when they could make a fantastic amount of money just by selling them on. Take a look at your old books, DVDs, ornaments or even Christmas decorations. Have you got an old bed that’s just sitting in a spare bedroom? Sell it. Got an old treadmill that’s just gathering dust? Send it to a good home.

6. Discount Codes

We all like a good bargain, don’t we? There is plethora of discount code sites that can ensure you get one. Buying online is easier than ever, and voucher codes make the process even simpler and more enjoyable. So, don’t pay full whack for a new washing machine or those nice pair of shoes, check out the promotional deals available online to see how much you can save.

7. Insurance

Most people are put off from the idea of paying weekly or monthly fees for insurance, when they really can be a great investment. While no-one likes to think about their homes being burgled, their fridge freezer breaking down or suffering from a serious or terminal illness, unfortunately these things can happen, and they can end up costing you a lot of money when they do. Insurance offers some peace of mind that you’re protected should the worst happen, and the small fee each month will ensure you’re not left with the burden of a heavy bill. Browse the market for the best home, contents, appliance, dental, critical and life insurance plans on the market. Having good insurance really helps when or if you ever need to make a claim. Steinberg Goodman & Kalish are a reputable firm who could help you through this process!

8. Switch Energy Suppliers

Energy prices are at a record high at the moment, and the rates are only going to go up in the future; therefore, you should consider changing energy providers to save yourself a good sum of cash. Compare your energy package against a competitor and see whether it’s worth switching over to a new supplier. You can switch providers at the click of the button and it could potentially save you hundreds of pounds a year.

9. Consider a Water Metre

Water metres are a great way to keep track of your expenditure in the home. While they’re not recommended for large families in big homes, they’re great for places that only house one or two people. The metre only charges you for the water you use, so you won’t be tied to a fixed monthly charge.

10. Quit Smoking

If you’re a smoker then you’re probably tired of hearing people tell you to pack in the fags, but you really should. On top of the many health benefits, giving up cigarettes can save you a whopping amount of money that can be used towards a new holiday or car – yes, the savings are that much. So, if you want thousands of pounds in your bank then quit today and watch the money roll in.

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June 25, 2014
How do consolidation loans compare to debt management?

If you are struggling to make payments on loans, overdrafts and credit cards at the end of the month, you may have looked at ways to solve your debt problems. Amongst the solutions you could consider, a consolidation loan or a debt management programme are two popular options. We have taken a look at both to identify a few factors that you need to think about when considering the best way to escape from your debt.

What is a consolidation loan?

A consolidation loan is designed for somebody that is struggling to pay back multiple debts. The idea behind this type of lending is to put multiple debts into one payment. This makes managing money easier as there are fewer payments to juggle with. It is also possible that the consolidation loan is taken out over a longer period of time than the original credit in an effort to make the monthly payments cheaper. The consolidation loan is used to pay off the other debts, so you then owe money to the firm who gave you the loan, rather than your original creditors.

What is debt management?

Debt management works in a totally different way. It is all about negotiation with your creditors to extend the repayment period and reduce the interest that you have to pay. Each case will be assigned a knowledgeable and well-connected advisor who will communicate with the creditors so you don’t have to. That means an end to hassling letters and phone-calls; the only person that you have to deal with is your one and only point of contact at your debt management company. This will be an immense relief to those who have experienced the stress of dreading every letter that comes through the door or shivers whenever the phone rings.

In many cases the negotiator will already have a relationship with the biggest lenders, so they will be more likely to strike a deal with them. This deal would likely include an extension of the period over which you could pay the money back. So, that means lower payments and more time, which is the exact thing that is needed when debt is getting the better of you. In some cases, the debt management company may be able to freeze interest on a loan or even reduce the amount that needs to be paid back. Seeking legal help, provided at stelklaw.com for example, can be beneficial when dealing with money issues. It may be an investment but will help you in the long run.

How do consolidation loans compare to debt management?

A consolidation loan can also reduce the amount paid out every month and extend the time that you can pay, but there are key differences to consider. The first, is that you will pay back interest on the loan. You must make sure that you check the interest rates and look for any hidden charges before committing to any loan. It is vital that the interest charged on the loan is lower than it is on the debts that you are currently paying. It is not only interest that you should compare; any charges that are levied on the credit you have. Try and work out the total cost of each option before making any decisions.

If you have found yourself struggling to pay your debts, then make sure you speak to experts immediately. The sooner you start sorting the problem out, the sooner it will be over. A debt problem can only get worse, unless you take action.

Have you checked if you are eligible for a PPI claim?

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March 13, 2014