Global Economy Lights are flashing, says PM

“Red warning lights” are again flashing over the state of the global economy, the Prime Minister has warner.

Speaking after the G20 meeting of world leaders, David Cameron said a “dangerous backdrop of instability” threatened Britain’s recovery, and we should stick to our long-term plan”.

In a Guardian article, he warned of the impact from conflicts, low growth and a eurozone “on the brink” of another recession.

He said: “The Eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too.

“Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down.”

By contrast, the Bank of England has forecast that the UK economy will grow by 3.5% in 2014, remaining resilient in the face of the “subdued world demand”.

But it its latest update last week, it also warned that there were risks from the global economic situation and it revised down its forecasts for UK output next year.

Source: 

Find us on Google

Bankrupt Goalkeeper David James Auctions Football Memorabilia

The retired England goalkeeper, David James, is to auction hundreds of items of football memorabilia collected during his career.

James who was declared bankrupt in May had a long career playing for Liverpool, Aston Villa, West Ham, Manchester City, Portsmouth and England.

Items to be sold through London-based auctioneer Hilco are 150 signed shirts, shorts and match balls.

The 44-year-old won 53 caps for England in a career that also saw the goalkeeper play for Watford, Bristol City and Bournemouth. James is currently the goalkeeper and manager for Indian Super League side Kerala Blasters FC.

Source: www.bbc.co.uk/news

Straightalkdebt

Find us on Google

The Money Statistics - October 2014

The latest money management statistics have now been published by The Money Charity, which was known as Credit Action until October 2013, and is the UK’s financial capability charity.

These figures have been produced since 2005 and were previously called the debt statistics, but have now been renamed to encompass a wider range of how we spend money in the UK.

The key figures for October 2014 can be seen below.
• £55,008: average household debt (including mortgages) in August, up from £54,981 in July
• 6.7%: percentage of household pre-tax income saved
• £521: average annual increase household debt per UK adult
• 6,405: new debt problems dealt with by Citizens Advice Bureau every working day
• £115,940: average mortgage size for households with mortgages
• 1,000: number of people who became redundant every day between May and July
• 4 Minutes and 51 Seconds: time between each bankruptcy and/or insolvency
• £162.6bn: outstanding consumer credit debt at the end of August 2014
• £4,347 per second: government borrowing in July 2014
• £29,013: average first-time buyer deposit

If you know any businesses or individuals that are struggling with debt, recommend they visit our website to see how we have helped similar people. We are happy to provide a free initial consultation without obligation.

There is Life after Debt!

Source: The Money Charity

Find us on Google

MORTGAGES AND PAYDAY LOANS

Everybody knows it’s more difficult to get a mortgage these days. 

But, did you know that at least one of the leading mortgage providers rejects anyone who has taken a payday loan in the past 3 months or who has had two or more payday loans within a year? 

This rule applies even when the loan has been repaid in full and on time. 

Written by Tim Corfield

Fewer Directors Being Made to Account for Their Actions

A recent report by R3, the Insolvency Trade Body has warned that a shortage of resources at the Insolvency Service has meant that unscrupulous company directors are escaping any action against them. 

Only 1,151 of 5401 reports (21%) sent by Insolvency Practitioners to the Insolvency Service resulted in a disqualification court order or undertaking, the administrative equivalent. This compares with 27% last year and 45% ten years ago. 

R3’s president, Lee Maning said “it is not apathy at the Insolvency Services it is lack of resources. We are reporting “misconduct” and the authorities aren’t acting. Later on, it results in new victims that could have been protected if it wasn’t for the lack of resources. Justice needs to be seen to be done.”… “We need to push up the disqualification rates and make sure those who have been disqualified stick to their terms if we are to maintain public confidence.” 

Tim Corfield said “These comments reflect our experience at Griffin & King and an issue we have been highlighting for some time”.

Written by Tim Corfield

http://www.griffinandking.co.uk

WHY THE HURRY TO PRODUCE GDP FIGURES IF THEY COULD BE MISLEADING?

We are now being told that better than expected construction figures may well mean that the second quarter GDP figures published last month will be revised upwards. The Office for National Statistics (ONS) reported last month that the economy shrank by 0.7% and based on this more recent data this may well now be revised upwards to 0.5%. 

The initial estimate was based partly on the assumption that construction output fell by 5.2% but now more data has been analysed, the ONS believe that the reduction was only 3.9%.

The ONS admits that much of the data gathered for the second quarter was a ‘best guess’. It bases its initial estimates solely on a monthly survey of 44,000 businesses covering the production, manufacturing, services, retail and construction industries. It polls firms of all sizes, but admits that those with fewer employees are less likely to be included – meaning that small fast growing businesses would be excluded from the calculation.

By the time the preliminary estimate is released, the ONS will have around 70%to 80% of responses back from its survey covering the first two months of the quarter (April and May) but for June the responses received is only around 20% to 30% and the ONS fill in the gaps based on historical data and a lot of assumptions.

The ONS admits that the bad weather and extra bank holiday made the estimate ‘more challenging’! These figures are unlikely to be fully revised for up to five years by which time who will care! Are we really to believe that Spain’s economy declined by 0.4% while the UK’s economy was down by 0.7%?

Tim Corfield commented “Given the political turmoil that these figures can produce and influence on business wouldn’t it be better to hold fire with producing figures that could indicate the wrong trends? Sending out the wrong signals could be damaging for the economy.” 

Andrew Sentence (a former member of the Bank of England’s monetary policy committee) has called for the ONS to include broader data including employment information. He commented “What the ONS is not very good at is taking a common sense view of economic data. They need to be much better at cross-checking technical data to give a true picture.”

Written by Tim Corfield

http://straightalkdebt.com/

Tax Incentives Point the Way

Up to 15 major corporations are looking to relocate back to the UK following changes in tax rules.

The identities of the companies are not all known but publishers UBM and Advertisers WPP are believed to be among the names. 

A treasury spokesman said the tax change was part of a package designed to create “the most competitive tax system in the G20”. …”at the budget this year, we cut corporation tax by and extra percentage 24% and by 2014 it will be 22% putting the UK within sight of a 20% business tax rate, helping us move closer to our goal of creating a tax system more competitive for business than that of any other major economy of the world”.

Surely, this is the way to attract the right companies and people into the UK who will pay UK tax rather than the increases in tax that we are seeing across the Channel in France. 

Written by Tim Corfield

Borrowing Overshoot is a Blow to George Osborne

Recent data in shows that the State borrowed more in June this year than it did in 2011. The public sector borrowed £14.4bn which is £500m more than in 2011 and £1bn more than the market expected.

Statistics, produced by ONS (Office for National Statistics) showed that borrowing for the financial year to date is £6.8bn higher than for the same period twelve months earlier - which puts under threat the borrowing targets for the year. 

These figures are the result of the economy falling back into recession which has a significant bearing on tax revenues and social spending. 

June’s figures show a 0.1% drop in income tax raised to £10.8bn while spending on social benefits, including unemployment rose by 2.3% to £15.4bn.

Recently the IMF (International Monetary Fund) has slashed http://www.griffinandking.co.uk/ forecast GDP Growth for the UK to just 0.2% for 2012.

These figures highlight the importance of the UK returning to growth. The IMF has warned that austerity should be eased in 2013 if the economic recovery fails to materialise.

written by Tim Corfield.

http://straightalkdebt.com/

WHO SAYS FOOTBALLERS ARE THICK?

John Carew, the former Aston Villa player has recently been on the wrong end of a bankruptcy order in the High Court following a petition from HM Revenue and Customs.

Last year, Carew reportedly had a tattoo misspelled on his neck. It was meant to say, in French - “My Life, My Rules”. Unfortunately, for Mr Carew there was a misplaced accent and what was actually tattooed was written as “My Life, My Menstruation”!

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/ 

SHOWDOWN ON AUSTERITY GATHERS PACE

Germany and France have moved towards a bruising and potentially destabilising showdown on how to tackle the European debt crisis.

Francois Hollande has made a presidential pledge to re-open the EU’s financial pact. Angela Merkel said in response “the fiscal pact has been negotiated; it has been signed by 25 Government leaders, and has already been ratified by Portugal and Greece. Parliaments all over Europe are about to pass it. Ireland has a referendum on it at the end of May. It cannot be negotiated anew”.

There is a backlash across Europe against austerity and a greater emphasis on boosting growth and job creation. If Hollande wins the French presidency and also secures a parliamentary majority in June he and his team are committed to not ratifying the EU pact unless it is modified to include growth boosting policies. Technically, the pact can come into force without French ratification but this is politically inconceivable.

The Dutch Government has collapsed recently over a failure to agree on spending cuts and comply with the new rules.

Spain’s credit rating has been revised downwards recently because the austerity is defeating the chances of economic growth.

The Romanian Government has recently been ousted in a vote of no confidence triggered by opposition budget cuts.

The Czech Government is fighting for its survival.

Herman Van Rompuy said “Over the past two and a half years the EU has had to react to the economic and financial crisis. This has not been easy and lead to some frustration at times and strains. We have had to deal with the urgent pressures of the sovereign crisis. The emphasis should now shift increasingly to measures that can boost growth and jobs.”

Hollande responded robustly to Merkel “it’s not Germany that decides for the whole of Europe”.

Tim Corfield

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.”

http://www.straightalkdebt.com/

Article sourced from: RSM Tenon

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.

http://www.straightalkdebt.com/

Article sourced from:

Experian

P35 (PAYE) Deadline 19 May: Comment from Frances Coulson, President of insolvency trade body R3

“Typically many businesses will be caught out by the P35 deadline on 19 May, having been ‘getting by’ and not submitting the full amount of PAYE they owe each month. This deadline is traditionally a time when HMRC uncovers any shortcomings in the payments due and the payments made in terms of PAYE, as well as those businesses which do not file at all.

“I suspect this will lead to an increase in actions by HMRC in a couple of months time, as well as pushing up corporate insolvency numbers towards the end of the year.

“One in four (24%) businesses are concerned about their debts, according to the R3’s latest Business Distress Index. Of this group, 37% are worried about Crown debts and this deadline will be a test for them. Seeking professional advice as soon as possible is the best way to allay those fears.”

Frances Coulson, R3 President

Methodology note on R3’s Business Distress Index: BDRC Continental conducted 501 telephone interviews with small, medium and large business owners and Financial Directors between 7th and 18th March 2011. Quotas are set by size, region and sector and the data weighted to the profile of GB businesses. The respondent in each case is a senior financial decision maker. Small businesses are those with a turnover of £50,000 to £1million pa.

R3 is the trade body for Insolvency Professionals, representing 97% of the UK’s Insolvency Practitioners.

P35 (PAYE) Deadline 19 May: Comment from Frances Coulson, President of insolvency trade body R3

“Typically many businesses will be caught out by the P35 deadline on 19 May, having been ‘getting by’ and not submitting the full amount of PAYE they owe each month. This deadline is traditionally a time when HMRC uncovers any shortcomings in the payments due and the payments made in terms of PAYE, as well as those businesses which do not file at all.

“I suspect this will lead to an increase in actions by HMRC in a couple of months time, as well as pushing up corporate insolvency numbers towards the end of the year.

“One in four (24%) businesses are concerned about their debts, according to the R3’s latest Business Distress Index. Of this group, 37% are worried about Crown debts and this deadline will be a test for them. Seeking professional advice as soon as possible is the best way to allay those fears.”

Frances Coulson, R3 President

Methodology note on R3’s Business Distress Index: BDRC Continental conducted 501 telephone interviews with small, medium and large business owners and Financial Directors between 7th and 18th March 2011. Quotas are set by size, region and sector and the data weighted to the profile of GB businesses. The respondent in each case is a senior financial decision maker. Small businesses are those with a turnover of £50,000 to £1million pa.

R3 is the trade body for Insolvency Professionals, representing 97% of the UK’s Insolvency Practitioners.

Credit Action releases May Debt Statistics

May 6 2011
Money education charity Credit Action has today released the May debt statistics, a monthly release which details the level of debt in the UK.
Key statistics from the release, which shows month-by-month trends, include:

* CAB deal with 8,004 new debt problems each working day
* 1,392 people are made redundant daily
* 847,000 people have been unemployed for more than 12 months
* £55,870 is the average household debt (including mortgages)
* £29, 843 is the average amount owed by every UK adult (including mortgages)
* £180m is the personal interest paid in UK daily
* £24.88m is the daily write-offs of loans by banks & building societies
* Every 17 minutes a property is repossessed
* £67.90 is the amount it costs to fill a car with a 50-litre tank with unleaded petrol
* £133,200,000 is the daily increase in Government national debt (PSDN)
* £1,156,000,000 is the total value of all purchases made using plastic cards today

Joanna Parsley, Associate Director at Credit Action says, "May's debt statistics show some interesting trends. Although the amount owed by every UK adult has fallen by approximately £30, in light of rising credit card interest rates- which at an average of 19.1% are now at the highest levels seen in 13 years- paying down debt has never been more sensible advice.

"With the cost of petrol rising still and with households experiencing the changes made last month to tax, national insurance and welfare benefits, 2011 looks set to be a year where household budgets are further squeezed."

The full debt statistics can be accessed from the Credit Action web site:
http://www.creditaction.org.uk/helpful-resources/debt-statistics.html