debt in UK
Submitted by stevein7 on Wed, 2008-01-02 16:26
Britons interest bill
Research says Britons face £93 billion annual interest bill
One in four people is struggling with their debts as Britons collectively face a £93 billion annual interest bill, research has shown.
Borrowing through credit cards, loans, overdrafts and mortgages has hit £1.39 trillion, according to comparison website uSwitch.com .
The group claimed an estimated 9.5 million people had "maxed out" on one form of credit during the past six months, while 38% have had a credit card application rejected.
At the same time, around three million people have taken out a debt consolidation loan in a bid to get on top of their borrowings.
But nearly two-thirds of these failed to close down their existing credit facilities, and instead went on to rack up a further £2,300 of debt on average.
Overall, the research found that the average household has now amassed unsecured debts of £4,281, made up of £2,684 owed through loans, £1,204 on credit cards and £393 on an overdraft.
Households now pay an average of £3,744 in interest on debt, including their mortgage, each year, £517 more than they paid last year.
The group estimates that people could collectively save £15 billion a year in interest payments by consolidating their debt into one low-cost unsecured loan.
But it warned that with lenders tightening their lending criteria, many people were finding it difficult to get more credit.
Nearly four out of 10 people who applied for a new credit card during the past three months have been rejected, and 19% have had loan applications turned down.
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Thousands will lose homes in 2008
Thousands will lose homes in 2008
UK-Thousands to lose homes in 2008
Around 123 homes will be repossessed every day this year as people struggle to keep up with mortgage repayments.
The Royal Institution of Chartered Surveyors (RICS) said just under 45,000 people will lose their homes during the year as the cost of servicing a mortgage remains close to record levels.
The figure is in line with estimates from the Council of Mortgage Lenders, which also expects 45,000 homes to be taken over by lenders.
City watchdog the Financial Services Authority said on Monday that 840,000 mortgages were a "cause for concern" because of their riskier lending characteristics.
At the same time RICS said the cost of getting on to the property ladder was now 351% more expensive than at its most accessible point in 1996.
It said a first-time buyer couple who were both on the bottom 25% of earnings, bringing in £26,595 a year after tax, would now have to save the equivalent of 104% of their joint annual take-home pay, or £27,729, in order to afford the deposit, fees and stamp duty they would have to pay to buy a typical home.
RICS senior economist David Stubbs said: "At the start of 2008, first-time buyers are finding it even harder to get a foothold on the housing ladder and the signs are that conditions are unlikely to get better in the short term.
"Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect.
"Those who are struggling with mortgage repayments are still faced with paying a large percentage of take-home pay but there may be some release of pressure as earnings continue to rise.
poverty in UK
poverty in UK
Fifth of families can't heat homes
Nearly one in five families with children cannot afford to heat their homes because of rising energy bills, research has shown.
Around 19% of people with children under 17 admitted they were unable to keep their homes warm because of the cost of gas and electricity, according to Save the Children UK.
The group found that a further 15% of households had been forced to cut back on food, while the same proportion spent less on essential clothing in order to be able to pay their fuel bills.
The problem was twice as acute among the UK's poorest families, with 44% of households living off less than £15,000 a year saying they could not afford to heat their homes.
The charity said one of the reasons low-income families were hit hardest was because they often relied on pre-pay meters to heat their homes, which are significantly more expensive than paying for fuel bills by direct debit.
It found that paying for gas and electricity in this way was on average 26% more expensive than paying by direct debit, leaving the country's poorest families paying an extra £215 a year on average.
It said British Gas had the biggest price difference, charging 58% more for electricity to pre-pay customers and 47% more for gas than those who paid by direct debit.
Save the Children is calling on energy companies to bring their pre-pay charges down so that people using the meters are charged the same as those who pay by direct debit.
Phillipa Hunt, UK poverty spokeswoman at Save the Children, said: "Fuel poverty is an outrage, particularly for children. It means that they are experiencing the effects of cold on a daily basis. Children find it more difficult to do their homework in a cold home, and are more likely to suffer ill-health.
She called on the Government to use the Energy Bill to enforce minimum standards of social tariffs, so that people on low incomes pay as little as possible for their energy.
child poverty
child poverty
One-in-five children is growing up in a household claiming out-of-work benefits, it has been claimed.
The Conservatives released figures obtained from the Government showing that 2.2 million children were living in homes dependent on unemployment benefits.
In some parts of the country almost half of all children were said to be in households dependent on benefits - 49.2% in the worst affected constituency, Manchester Central.
According to the Tories, Britain now has the highest proportion rate of children living in workless households anywhere in Europe.
Shadow work and pensions secretary Chris Grayling said that the figures were a "shocking indictment" of the Government's failure to tackle child poverty.
"Gordon Brown and his ministers are always claiming how much they have done - but the reality on the ground tells a very different story," he said.
"Worklessness is endemic in many communities, but even so, the fact that nearly half the children brought up in some areas come from homes entirely dependent on benefits is a figure that should bring shame to ministers, particularly given the fact that so many people have come to work in Britain from overseas in the past 10 years," he said.
Four out of 10 children in
Four out of 10 children in London live below the poverty line, according to a new report published.
The report by the London Child Poverty Commission (LCPC), Capital Gains, called for tougher action from the Government and employers to raise salaries and increase employment in the capital.
LCPC found that 41% of the 650,000 children in London are living in a household with an income of less than 60% of the national median.
Half of all children in inner London were found to be living in poverty.
The report, which is the result of two years of research and consultation, called for the introduction of a government minister with specific responsibility for cutting child poverty in London, and for an increase in child tax credit.
It also called for employers and trade unions to help low-paid workers and recent immigrants develop their careers.
Other suggestions included tougher employment targets for Jobcentre Plus, more resources for literacy schemes, and the possibility of introducing a London-specific minimum wage.
Families living in social housing, single-parent families, and some black and ethnic minority groups were facing higher risks of poverty, the commission found.
More than one in three children in London currently lives in social housing, while 61% of children in inner London belong to an ethnic minority group.
Employment rates in the city are much lower than the national average, with 43% of single parents working, and 60% of mothers with partners.