Northern Rock 5 Year Deal

Filed Under  UK Debt News  |  Leave a Comment

Northern Rock has signed a 5 year credit reference deal with Experian to purchase consumer credit reference information to support its lending activity.

Richard Barclay, director or credit at Northern Rock said

It is crucial that we have access to the most up to date information available in order to make the right decisions for both new and existing customers

The consumer credit reference information we receive from Experian meets this need and provides us with the ability to ensure accurate decisions are made

Experian will deliver the information to Northern Rock through its managed Link SM solution.

 

Debt Of The Future

Filed Under  Personal Finance  |  Leave a Comment

debt1.jpgWhen we look at the statistics of debt in the UK do we consider the effect this has on our everyday lives and country as a whole?

Britain’s personal debt is increasing by £1 million every four minutes

The total credit card debt in April 2006 was £56 billion!

39% of Brits overspend on their credit cards on day-to-day purchases

We read in the headlines 

UK smashes the £1 trillion pound barrier Britain in Debt Turmoil

It is clear that Britain is in debt, but just how much thought do we give to this and the implications?

We rely on businesses and businesses rely on us

A business provides jobs only as long as it is making a profit. In order to make a profit, a business needs sales. Without sales, there is no business and with no business, there are no jobs.

If Britian is a nation in debt, then surely businesses and households across the nation feels the effects. People can’t spend what they don’t have, and if people are not spending, then businesses are suffering.

Incredibly the number of people earning more than £30k a year asking for financial help has risen by 275% in the last 3 years!

Encourage and Educate

It is becoming clear that we need to be educated when it comes to our personal finances. We need to be encouraged to become fully aware of what we are getting into when we take out loans or spend on credit cards rather than get caught in the debt trap.

Because we cannot predict the future, we do not know whether we will be caught out or not, so it is essential we are bought round to the way of thinking that, if we can’t afford to pay for it now, then we should save up for it.

Of course, for many people it is too late for this kind of thinking, but not for our younger generations.

From our own experience, should we not be thinking of educating our young people ourselves regarding the implications of taking out credit if it all goes wrong? “You should have read the small print” didn’t quite do it for us.

29% of 16-14 year old said they would not know how to prepare and manage a weekly budget

62% of young people said if they got into money trouble, they would not be able to name any advice or support services they could turn to for advice

Bankruptcies among 18-29 year olds have more than doubled in the last 4 years!

Surely this spells something out to us?

Take A Stand Against Debt

Its great that we have Debt Management Companies such as Payplan to turn to when we find ourselves struggling with our financial situation, but wouldn’t it be better if there wasn’t a need for companies such as these?

debt3We could continue to blame the creditor for their lending systems which seem to make obtaining credit easy, and the Government for allowing so much advertising of credit, but once we have experienced financial difficulty ourselves and know the implications, then it is up to us to do something about it and educate and empower our younger generations to not follow in our footsteps.

Getting Somewhere

The good news is, according to MP Melanie Johnson, the Financial Services Authority (FSA) are working wth the Department for Education and Skills, the main curriculum agencies and other organisations to help teachers deliver personal finance education.

The Personal Finance Education Group (PFEG), funded by the FSA and the Department for Education and Skill, aim to promote and facilitate the education of all UK school pupils about financial matters.

The Department for Education and Skill’s guidance suggests that schools teach:

  • 5-7 year olds, that money comes from different sources and can be used for different purposes
  • 7-11 year olds, to look after their money and realise that future wants and needs may be met through savings
  • 11-14 year olds, what influences how we spend or save money, and how to become competent at managing personal money
  • 14-16 year olds, to use a range of financial tools and services, including budgeting and saving in managing personal money

The Solution Before The Problem

It is encouraging that the focus to educate young people is in the pipeline, however, surely the questioning of how much freedom creditors have to advertise their services should be addressed also?

Daytime TV is full of advertising for loans and credit cards, and if that wasnt enough, how many letters do you get through your door? These are real areas of concern that need to be taken into consideration.

If things continue as they are, then the nation will feel the effects. More and more businesses will fail and more and more people will be put out of work. debt10It is imperitive that the Government looks at the whole picture as well as looking at finding ways to enable people to deal with existing debt.

The Government needs to take a long hard look at the whole credit lending system and the freedom of advertising credit and to change the way people think when considering taking out credit to realise the implications should things go wrong.

Over indebtedness not only affects your finances, but also has a great emotional impact on your life. We cannot rely on the Government alone to deal with it, we need to take a stand ourselves and stamp out debt in our nation by teaching our young people the wisdom of looking after their finances.