‘Featured’ News
Downturn In UK Economic Growth
Posted 2008-04-29
The current credit crunch signalling a sharp increase in the cost of obtaining a loan from the major banks, together with inevitable reduction in the availability of loans, may restrict economic growth in the UK by as much as 1% compared to the previous year, according to the Ernst & Young Item Club and reported by the BBC.
The forecast, billed as a worse case scenario, indicated however that it is likely the fallout from the slow down would be contained within the financial services community, though at the same time admitting that there could be a marked affect on the High Street and general housing market if careful and considered intervention by central banks is unable to minimise the damage.
However, as many financial pundits have been suggesting during the past few years, the housing market could not possibly sustain the rise in house prices which have soared by an incredible 185% since 1995, and as a result have continued to give excellent returns on investment.
Despite the current financial climate, this positive view of the market is mirrored in a recent BBC housing and property survey, which discovered that 53% of people taking part still considered property to be ‘safer than cash’. And though some notable financial institutions have been putting a short term freeze on cultivating new mortgage business, published figures show that overall mortgage approvals in February still exceeded the January level of 43,732, rounding up at 43,870.
The credit crunch has also seriously impacted on the secured loans market. The latest Alliance and Leicester monitoring reports indicate that after five recent base rate rises, and with the base rate currently standing at 5.75%, a rise of 1.25% from July 2006, many mortgage holders are cautious about taking up further unsecured loans.
There are also strong indications of a significant slowdown in consumer spending, particularly within the group of those carrying secured debt. The Alliance and Leicester report noted that mortgage borrowers are 50% more likely than other members of the public to reduce credit card amounts and other borrowing that was unsecured.
This trend of thriftiness amongst mortgage borrowers was highlighted by published figures, which showed that the average mortgage borrower repaid £35 on credit cards as opposed to an average borrowing of £52 by non-secured mortgage holders.
Another concerning aspect of the current financial climate, according to reputable financial analysts, is that the number of people struggling with the burden of debt is likely to double in 2008.
According to Debt Management specialists, TDX Group, the credit crunch is already limiting refinancing options, so that it is becoming increasingly difficult to locate the best available deals.
TDX calculate that in the region of one million people in unsecured debt owe cumulatively £25bn, roughly an average of £25,000 per person. The Group’s report stated that in 2007, 58% of those struggling with debt issues, either refinanced or remortgaged in order to reduce the amount of monthly payments.
Those likely to be currently suffering the most are people with adverse credit records who may have increasing difficulties in re-mortgaging, and who may also be prevented from obtaining cash as more and more credit card companies are withdrawing cash facilities from endebted card holders.
The debt management companies have naturally become aware of the increasing demand for their services during the current credit crunch period, with the TDX Group predicting that the number of IVAs and debt management plans could double in 2008. In particular, Eurodebt Financial Services, a leading UK debt management provider, is currently reporting strong growth as consumers seek a real alternative to solving their financial problems in the face of tighter and tighter lending criteria from mortgage and remortgage companies. As a result of this shift towards debt management due to the strictures now being applied to new borrowing, financial advisors are being urged to offer services in debt management and IVA debt plans as an extension to their usual product range.
Read Downturn In UK Economic Growth
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Understanding Car Insurance Discounts
Posted 2008-04-24
Trying to save money wherever you can is important to us all. Car insurance should be no different. Do not assume that your agent knows everything about you and your vehicle.
Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.
Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.
First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.
Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.
Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.
Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.
You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.
In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.
Understanding how discounts affect your insurance rates is important to save you money.
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Budgeting the ‘obvious’ solution to debt woes
Posted 2008-03-30
Spending within your means by calculating and adhering to a realistic budget is the simple way to avoid falling foul of debt, one industry expert has said. James Falla, director of debt counselling service Thomas Charles & Co, said that learning how to budget "isnt rocket science" and he urged more Brits to take responsibility for their own actions. Read on...