Money worries linked to rise in depression

Apr 14th, 2011
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Debt and money worries may be fuelling a rise in depression in England.

According to data obtained by the BBC, prescriptions for anti-depressant drugs such as Prozac have risen by over 40% in the last four years. Additionally doctors and charities are increasingly being contacted by people struggling with financial worries.

Head of the Royal College of GPs, Dr Clare Gerada said ‘ Of course in times of economic problems we would expect mental health to worsen and GPs are seeing more people coming in with debts racking up, or who have lost their job and are cancelling their holidays.’

‘They feel guilty that they can’t provide for their family and these things can often act as a trigger for depression.’

Chief Executive of mental health charity Sane, Marjorie Wallace said ‘It is impossible to say for sure that economic problems are leading to a rise in depression. But we are certainly hearing more from people who are worried where the next meal is coming from, job security and cuts in benefits.

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Budget changes will cut income by £200

Apr 6th, 2011
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The recent budget is likely to leave UK households £200 a year worse off according to financial education charity Credit Action.

Changes outlined in the March budget include a 1% rise in National Insurance and a lower threshold at which the higher rate of tax applies. Credit Action says that of the 44 changes to both systems only 13 will have a positive impact.

One of the biggest changes outlined in the budget is to reduce the amount of income at which people start to pay the higher 40% tax rate down to £35000. It is estimated that this will bring an extra 750,000 people into the upper tax band for the first time.

The main rate at which National Insurance is paid has been increased from 11% to 12%. In turn the level at which payments begin has been raised to £139 from £110.

Overall the biggest losers will be those earning more than £35000 with someone on £50000 a year seeing their take home pay reduced by £500.

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Take home pay drops by £1000

Mar 28th, 2011
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UK workers are more than £1000 worse off than they were in 2009, according to new research by the BBC’s Panarama programme.

The average employee has seen their take home pay fall in real terms by 5 per cent. According to the study the average annual salary is currently £20,419 after tax. However when inflation is factored in the buying power of people’s pay is actually lower now than it was in 2004. Construction sector workers are amongst the hardest hit with the value of their take home pay falling in real terms by £1,188 a year. This fall in living standards has been exasperated by workers being afraid to request a payrise from their employers.

Responding to the findings David Blachflower, former member of the Bank of England’s Monetary Policy Committee said -

‘One of the bleak things going on right now is that people fear for their jobs. Company profits have been relatively low so the ability of firms to pay has actually prevented wages from rising. So unemployment and the fear that it will rise further is what is containing wage pressure right now.’

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Personal debt repayments reach record high

Mar 25th, 2011
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Research by unbiased.co.uk has shown that 2010 was a record year for UK borrowers repaying their debts.  In total just over £12 billion of debt was repaid last year.

Unbiased.co.uk’s research revealed that during the final quarter of 2010 borrowers paid back 14 pence of debt for every pound saved. In the first quarter of the year repayments reached as high as 19 pence for each pound.

However as debt repayments rise savings levels suffer- as borrowers repay more debt they save less and less. Almost £20 billion of new savings were recorded in the first three months of 2010 with this falling to £15 billion in the final quarter – a decrease of 20 percent.

These figures demonstrate that consumers are becoming more conscious of their debts and are prioritising repaying them over making savings.

 

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Savers warned over Isa deals

Mar 17th, 2011
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Holders of Individual Savings Accounts (Isa) are being urged to look out for misleading offers on interest rates. Moneyfacts, a financial information group are warning savers not to be swayed by introductory offers. They state that introductory bonus rates with many Isas actually expire once the initial year has come to an end. Interest rates then curtail to a smaller default rate, often posing diminished returns.

A survey conducted by the Office of Fair Trading revealed that an average of 11% of Isa holders change to a different provider every year.

Twelve years ago, tax-free Isas were pioneered in an effort to inspire people to save money. At present time, the latest data reveals that 17.5 million people in the UK currently have Isas, holding in excess of £143 billion.

This time of year usually sees an increase in action from Isa providers, with the current tax year coming to an end and the beginning of a new one.

The current annual Isa limit will grow from £10,200 to £10,680 in April this year, with the figure being £5,340 for a cash-only Isa.

Current Isa holders, in addition to savers looking to open a new account, should be alert in assessing offers on long-term interest rates.

Sylvia Waycot, a spokeswoman for Moneyfacts, advises “Interest paid in the second or subsequent year of an Isa that had an introductory bonus can be a very sad imitation of the original attention grabbing rate because, without the bonus element to prop it up, the remaining rate paid can be very low.”

She continues, “Pitfalls to watch out for are long-standing account names, as they will be issue-based and each issue will pay a different rate. The older the account generally means the worse the rate.”

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UK unemployment reaches 17-year high

Mar 17th, 2011
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In figures released by the Office for National Statistics (ONS), it has emerged that UK unemployment currently stands at the highest level since 1996.

During the three months between November 2010 to January 2011, the figure grew by 27, 000 to a total of 2.53 million people without jobs.

At present, the unemployment rate stands at 8%, although the ONS also revealed that the total number of people collecting jobseeker’s allowance decreased by 10,200 in February to 1.45 million.

The ONS report also uncovered other all-time highs. The unemployment rate for 16-24 year olds now stands at 20.6%, an increase of 0.8%. It was also revealed that the unemployment rate for 18-24 year olds, currently 18.3%, is also a record high. Students presently looking for work were not included in the data, however.

The figures showed that January’s average earnings grew 2.3% from the same time in 2010. It is thought that this figure can be attributed to bonus payments accrued in the finance and business services sector. Including bonus pay, the average wage was deduced to be £452 per week.

In an increase of 32, 000, the number of people currently employed was revealed to stand at 29.16 million. This is the greatest figure since the autumn months.

The number of those between the ages 50 and 64 and employed also grew to a record high to 7.3 million, an increase of 25,000.

Prime Minister David Cameron commented that the report presented a “very mixed picture”, citing the greater numbers of people with jobs and a lesser amount collecting unemployment benefit, but expressed his disappointment over the unemployment figures for younger people.

The Employment Minister, Chris Grayling stated, “Clearly any increase in unemployment is unwelcome and a disappointment and it underlines the need for a Budget next week which focuses on growth, on creating an environment where businesses are growing and developing and creating jobs.”

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Complaints against UK banks increasing

Mar 4th, 2011
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The latter half of 2010 witnessed a rise in the number of financial complaints to the Ombudsman. The Financial Ombudsman Service (FOS) received 15% more official grievances in the second half of the year than in the first half. Coming in at the very top of the list of annoyances was the UK’s largest bank, Lloyds Banking Group.

The FOS were the recipients of 97,237 new recorded grievances, a figure encompassing banks, insurance and investment firms. 53% of all complaints logged were upheld by the ombudsman in countenance of the consumer, an increase from the 44% upheld in the first half of 2010.

It appears that the grievances dealt with by the FOS were continuing queries from the complainants, after having received disappointing responses from their own banks following an initial complaint.

In an issue unrelated to the figures received by the Financial Ombudsman, the banks of the UK have explained that they are continuing to attain large numbers of customer complaints. In adhering to the demands of The Financial Services Authority (FSA), the UK’s banks are required to publish figures every six months. The total number of complaints at RBS rose by 41% to 53,806. NatWest, a part of the wider RBS group, acquired 118,765 grievances, an increase of 41%. Annoyances logged with HSBC fell to a figure of 80,794, a fall of 1%. Barclays received 294,891 complaints, which was a decrease of 4%. Santander slashed their total number of complaints by 20% to a total of 195,475. The bank most complained about, was Lloyds. The second half of 2010 saw their total number rise by 14% to 330,000.

“Our customers tell us the two areas we need to improve are the length of time it takes to resolve complaints and the perception that the bank is not taking sufficient ownership of them. We are committed to getting this right,” said Martin Dodd, customer services director at Lloyds.

Source: http://www.bbc.co.uk/news/business/your_money/

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UK unemployment rises

Feb 24th, 2011
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In the closing quarter of 2010, UK unemployment figures were up by 44,000 to a total of almost 2.5million. In data shared by the Office for National Statistics (ONS), it is revealed that the unemployment rate now stands at 7.9%. The figure for youth unemployment rose from 66,000 to 965,000 to a significantly higher rate of 20.5%. This is a record high for those aged between 16-24, and is perhaps an indication of many university graduates being unable to attain employment following completion of their degree.

Also on the rise, is the total number of people collecting Jobseeker’s Allowance, which stood last month at 1.46 million, an increase of 2,400.

In another record high, the figure for those with part time jobs as a result of being unable to attain full time positions increased by 44,000 to a sum of 1.9 million. This is the highest figure since information began being recorded 19 years ago.

The ONS also revealed evidence of  long-term unemployment worsening, with a further 17,000 unemployed for a period longer than a year, adding to a total figure of 833,000. While unemployment levels grew in England, Wales and Northern Ireland, the number fell in Scotland by 13,000.

The government’s spending cuts in the public sector mean unemployment levels are expected to rise in the proceeding months.

Howard Archer at IHS Global Insight stated, “The labour market data are disappointingly softer overall and fuel our suspicion that unemployment is likely to trend up gradually in 2011 in the face of below-trend growth and increasing job losses in the public sector.”

An annual growth rate of 2% is imperative in order for employment to rise, financial experts suggest.

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£150m wasted on credit card charges

Feb 24th, 2011
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In a survey conducted by confused.com, it has been revealed that a combined total sum of £150 million is being overspent on tardy payments by holders of credit cards. The late payments incur charges, meaning that many credit card users are actually making payments of a sum much higher than is necessary.

It has emerged that many consumers simply do not have a direct debit set up in their bank account. A direct debit could automatically make at least the minimum repayment, avoiding any superfluous charges. 57.5% of credit card users are currently failing to recognise this, resulting in them not meeting the monthly instalment deadline. An average fee of £12 is incurred for each delayed repayment.

The confused.com poll also states that the year 2010 saw 26% of credit card holders as recipients of late charges on at least one occasion. 8.5% of credit card patrons experienced three or more incidents of fees over failure to meet minimum repayments. A figure totalling slightly more than 1% of users, incurred ten or more separate instances of late fees over the past year. On average, this resulted in excess of £100 in late repayment charges.

Financial experts acknowledge that credit cards pose a particularly expensive form of debt, with potential to grow and spiral out of control. It is suggested that credit card users establish a direct debit to help manage repayments. It is an easy way of ensuring users do not fall short on their monthly instalments. It could also prove to be advantageous to pay more than the minimum amount required on a monthly basis, as this would take much longer to pay the full amount and would also accrue a superfluous amount of interest.

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Personal insolvencies hit peak

Feb 7th, 2011
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The number of personal insolvency declarations reached an all time peak in 2010.

The Insolvency Service reveals that there were 135,089 separate cases of people declaring themselves insolvent last year. This is the highest figure since the beginning of such records, dating back to 1960.

The figure refers to insolvencies in England and Wales. Although the number of cases reached a record high, the total actually fell during the last quarter. In comparison with the last three months of 2009, there were 13.6% fewer insolvencies.

The total for 2010 was an increase of 0.7% from that of 2009, and twice the number in 2005.

Also on the decline in 2010 was the total number of companies making declarations of insolvency, which was 23% down on 2009.

The decline during the last three months of 2010 can be attributed to adverse weather conditions, resulting in fewer people being able to attend court hearings; money lenders adopting a more considerate attitude due to the holiday season; and procrastination – people avoiding the issue of insolvency until the incoming of 2011.

Individual Voluntary Arrangements (IVAs) grew by 6.5% in 2010 with a figure of 50,716. IVAs have less of a stigma attached to them, and allow for an agreement between debtor and creditors.

Last year also saw a total of 25,179 Debt Relief Orders. Since their inception in spring 2009, Debt Relief Orders allow people to manage smaller debts of £15,000 and under to evade bankruptcy.

The more established route of bankruptcy was opted for by significantly fewer people in 2010. The total number declaring bankruptcy was 59,194; 20.7% lower than the preceding year.

Source: http://www.bbc.co.uk/news/business/

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