Debt management weekly round-up

22/01/2010

It's been another busy week for consumers, and here's all the debt news that has been affecting you over the last few days.

On Monday we heard that families are being saddled with more debt this year as the recession continues to take its toll.

Research from Scottish Widows revealed that households with children now owe an average of £92,000 in outstanding mortgage debt – up £3,000 on the previous year.

There was further bad news the following day, as official figures showed that the consumer price index rose well above the government's target.

The finding means that the cost of goods has risen 2.9 per cent year-on-year. This is after an increase of 0.6 per cent on the previous month.
Wednesday saw the Halifax reveal the extent to which house prices have rocketed in the last 50 years.

A study conducted by the bank showed that values have seen a 2.7 per cent rise each year on average since 1959, allowing for inflation – well above the level of income growth over that period.

Perhaps unsurprisingly, the last decade saw the biggest increases – with a shocking 62 per cent real rise occurring during the noughties.

Unemployment then came back into the spotlight, with new figures revealing a decrease in joblessness for the first time since May 2008.

However, lurking beneath was a grim total of eight million people described as economically inactive – the largest since records began.

The findings from the Office for National Statistics (ONS) also showed that one million people are taking up part-time work because they are unable to find a full-time job.

This reinforces debt management company EuroDebt's own experience that 'loss of income' is the number one reason for starting a debt solution.

Meanwhile, personal finance campaigners have been pushing for greater transparency from credit card and store card providers.

The government is currently running a consultation into regulation of the sector, to protect those struggling with credit card debts.

One of the major concerns raised is the allocation of payments on such debt. At present, many customers are unaware that their cheapest debt is often paid off last by their lender – a problem which can potentially lead to a debt spiral.

Finally, today saw the shocking news that Skipton Building Society is breaking its pledge to put mortgage rates within three per cent of the base rate.

The building society announced that the increase in its standard variable rate (SVR) will be put in place in March, potentially adding thousands of pounds to existing customers' bills.

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