Saturday, 17 September 2011

Insolvency Service Personal Insolvency - Statistics Insight

The number of people becoming personally insolvent in England and Wales has risen for the first time in a year, according to figures released by the Insolvency Service. After four consecutive quarters of falling personal insolvency levels, this increase reflects the fragility of the economic recovery.

Although these numbers are up on last quarter, this total is actually 12 per cent less than the same point last year, and represents the fourth consecutive quarter of year on year falls.

RSM Tenon now predicts that the number of personal insolvencies this calendar year will be in the region of 120,000 - the lowest tally since 2008.

“Despite the recent negative or stagnant growth in the economy, the fact that unemployment figures remain hundreds of thousands higher than before the recession, and the fact that government spending cuts are starting to bite, the number of people hitting the financial rocks has only now shown signs of the strains of the public sector cuts combined with increased costs of living and falling real incomes,” said Nigel Fox, Director of Personal Insolvency at RSM Tenon.

“It’s very likely that much of this is to do with the low interest rates, which have now been kept close to zero for a staggering 28 months, and look set to stay low in the near future. This particularly benefits homeowners: huge numbers of people the current economic climate would have left struggling to make their mortgage payments are saved from going under.

“It’s worth pointing out though, that people in rented properties seldom see the direct benefit of low interest rates, and neither do people with unsecured debts as interest rates on credit cards and bank loans have not followed the trend of the base rate. So the picture is complicated, and there are more factors influencing the current low number of personal insolvencies than the actions of the MPC.”
Article sourced from: RSM Tenon

Sunday, 11 September 2011

Experian reports rich getting poorer

Experian has reported a massive 100% increase in the level of borrowing amongst high
income families in their 30s and 40s over the past three years, with many citing the
rising cost of living as the main cause.

Over a third (33%) of high income families are now reliant on overdrafts of over
GBP1,000 to keep the family finances ticking over between pay-days, compared to just
15% in 2008. This is according to the results of a three-year survey commissioned by
Experian, the global information services company and the largest credit reference
agency in the UK.

The report reveals a high proportion of these families (52%) are regularly borrowing
money against their overdrafts resulting in expensive repayments because of the high
rates of interest charged on overdrafts compared to other credit products.

47% of UK adults have applied for additional credit in the past two years, with some
borrowing from sources which charge relatively high interest rates, potentially
adding to their financial pressures and risking missed repayments and a chequered
credit history.

Despite this, nearly two-thirds of high income families are actually optimistic
about their financial future, with 61% believing their financial situation will
improve in the next 12 months, despite dipping in to their savings and relying on
their overdrafts to make ends meet.

When many are borrowing to make ends meet, Experian highlights that many people are
missing out on the best rates because they're unaware of the benefits of managing
their credit report with a service such as Credit Expert.

Brits are getting better at accessing and managing their personal information that
lenders see which is inevitably resulting in them securing better borrowing rates.

Making the right decisions where borrowing is concerned is vital, and getting a good
credit rating is one of the ways you can give yourself the best chance of finding the
deals you want.

Peter Turner, Managing Director at Experian Interactive said: "UK families often
rely on their overdraft to get by, but that is not always the best option. Many of
us choose to borrow, but it's where you borrow from that makes all the difference.
The current financial climate is tougher than ever and seeing your credit report
could help families manage their credit better, as well as helping them plan for
their financial futures."

Credit Expert from Experian shows customers what a lender sees in their name. Every
time someone applies for credit or a loan, that request is recorded. Multiple
requests on borrower's credit history can look as if you are over-extending yourself
or a fraud is being committed. For those looking for a good credit deal or mortgage,
Credit Expert allows them to check their report
instantly online to ensure that it accurately reflects their position, and then as
often as they want after that. Credit Expert members can also match their credit
report to credit offers they are more likely to be accepted for using Experian's
Lower My Bills service.
Article sourced from: