Financial Pressures Hitting the Older Generation Harder

The latest available data from The Insolvency Service shows that while the 35-44 year old range has the largest number of individual insolvencies, the 45-54 year old group had leapt from representing fewer than 15% of individual insolvencies a decade ago to making up 25% in 2011. 

The older generations are now being hit harder by insolvency and the number of individual insolvencies for over 55’s increased between 2009 and 2011.

Tim Corfield commented “The impact of insolvency on an older person is much greater. Younger people have a much better opportunity to start again and psychologically won’t have felt such an impact of losing everything. It’s much more difficult for older people to re-train and re-enter the job market even though they may well have great skills to compliment any business or workplace.”…“I am seeing many more situations where the younger generation are now supporting the older generation rather than the other way around.”

The good news is that the overall number of personal insolvencies has fallen from 135,089 in 2010 to 119,031 in 2011.

Written by Tim Corfield

OFT Announce Revised Debt Management Guidance

The Office of Fair Trading (OFT) has estimated commercial fee charging debt management companies (DMC’s) make £250 Million a year from over-indebted clients.

Since the last review issues have continued to be raised over advertising and marketing practices as well as the quality of advice given by these firms.

Following the OFT’s earlier review, 129 warnings were issued to DMC’s while a further 67 warning letters were sent out. The OFT has since claimed 87 firms have left the market either voluntarily or due to enforcement action.

However, there remains concern over the quality of the management advice in this sector where there are “vulnerable consumers”.

The new guidance looks to clamp down on firms making “false or misleading claims” about the business such as operating websites which appeared to be run by a Government of a charitable body.

Any “unfair or improper practices” could lead to the loss of a firm’s consumer credit licence. Among the practices identified were the sending of unsolicited text messages, email or voicemails and the issue of inappropriate financial incentives to staff giving debt advice.

The latest guidance has been welcomed by the two leading trade associations for the industry: The Debt Manager Standards Associate (DEMSA) and the Debt Resolution Forum (DRF). The pair together represent some 46 DMC’s and aim to promote professional standards in the industry.

Tim Corfield

http://straightalkdebt.com/ 

TASKFORCE WARNS OF BUSINESS FUNDING GAP

Business may face a £190 billion funding gap within 5 years unless more is done to stimulate lending - a Government backed taskforce warned recently.

Many small businesses are struggling as banks rein in loans. The committee, lead by Legal & General boss Tim Breedon warned that problems will intensify when demand for credit increases as the economy expands in recovery.

The report predicts that demand from businesses for credit will outstrip supply by at least £84 Billion and up to £190 Billion over the next five years.

This report comes at a time when George Osbourne has intensified his efforts to make funds more accessible to SMEs.

Tim Corfield April 2012