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UK Consumer Spending In Second Month Rise

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UK Consumer Spending Increases Again

A survey conducted by market research group GFK NOP has shown a rise for the second month in a row in UK consumer spending. This is a trend which bucks the current economic climate of job losses, a prolonged period in the rising cost of living and the beginnings of recession.

The BBC states that this may suggest success in Government and Bank of England fiscal policy, following VAT rate reductions from 17.5% to 15% and successive interest rate cuts to a low of 2% - but the broadcaster is hesitant to report a ‘real’ improvement.

Rachael Joy from GFK NOP confirmed this hesitancy by saying:

“The Consumer Confidence Index has improved again this month after the interest rate cut and the drop in petrol prices, but continues to hover at near record lows.”

“The crucial question is whether the improvement in this index will be translated into activity on the High Street during the January sales.”

Overall Record Low in UK Consumer Spending

It is the record lows in UK consumer spending that are perhaps most worrying when gauging the strength of the economy, suggesting that despite recent increases, many consumers are simply choosing not to spend with the same confidence. We may of course be seeing a seasonal glitch.

High Street Retailers Rally For Cash

The abundance of High Street sales before Christmas could be the best indicator of a failing economy. As companies desperately attempt to generate enough income to survive the traditionally quieter times in the first quarter of 2009, the question on most commentators lips seems to be when will the collapse of yet another well known High Street store occur, not if.

The ’surprise increase in retail sales’ therefore, as the BBC describes the official figures released yesterday, may not, unfortunately, tell the real story.

The Over Fifties, Debt and Retirement

Filed Under Consumer News, Financial News, Payplan Media Release, Payplan Press Release, Press Releases, UK Debt News | Leave a Comment

Over Fifties May Have To Delay Retirement To Clear Debts

New research from Payplan, the UK’s leading provider of free debt solutions, reveals the growing problems that indebted ‘pre-retirees’ (aged 50-60) face as their average unsecured debts soar to £41,400. This is 25% higher than the average unsecured debts of other age groups (£32,700) and paints a gloomy picture for many older consumers as they approach retirement. This research has been carried out with over 40,000 Payplan consumers.

‘Significantly More Debt’

Not only are ‘pre-retirees’ in significantly more debt than other age groups but it also takes them longer to pay back this debt: their average repayment term in a debt management plan is 11 years, compared with 9 years for other groups. This gap has increased by 27%, suggesting that debt for ‘pre-retirees’ is a growing problem and potentially one that will increase as the recent economic turmoil forces up the prices of groceries, utilities and unsecured borrowing.

Other Key Research Findings

14% of Payplan customers that registered between July 2007 and June 2008 were aged 50-60.
‘Pre-retirees’ spend 15% of their total expenditure on utility costs, compared with 13% across all other age groups.
The average surplus income* of an indebted 50-60 year old is £307.38, compared with £290.21 across all ages.

Pre-Retirement Debt…Hugely Concerning

Such high levels of ‘pre-retirement’ debt are hugely concerning. Not only are the salaries for this group likely to fall rather than increase over the repayment term but at this age any ’surplus’ income should be saved to cover their retirement - which could last over thirty years.

Managing Director of Payplan, John Fairhurst, comments:

“Most people imagine that as they reach the countdown to finishing work, they will have paid off their mortgage and be busily saving for a comfortable retirement. These figures show that this is simply not the case for many ‘pre-retirees’ and highlights a hugely concerning trend towards indebtedness in later life.

“Indeed, with this group taking an average of eleven years to clear their debts on their existing income, many of our clients will have no option but to delay retirement until they clear outstanding balances and have had the chance to build some type of nest egg.

“Although many people in their fifties are used to maintaining high levels of personal debt they are often just ‘treading water’ with repayments and covering little more than interest charges. If they are to enjoy a reasonable standard of living in later life then it is vital that they have a clear plan in place for becoming debt free whilst they are still working.”

*Surplus: The amount of money left over at the end of the month once all priority debts, such as mortgage/rent and utility bills, have been paid.

About Payplan

Free, confidential advice is available from Payplan (either online or by calling 0800 917 7823), or your local Citizens Advice Bureau, who can help work out a debt repayment plan, as well as exploring what other options are available.

Notes to Editors

Payplan Case Studies

All our case studies are available for interview. For further information please contact Payplan’s Press Office:

Jayne Newton - Payplan
Email: jayne.newton@payplan.com
Tel: 01476 541980, 07812 736861

Payplan is helping a 50-year-old postal worker who has £58,954 of unsecured debt. He took loans to fund his daughter’s wedding and spent a lot of money treating his grand-children. He has a mortgage on his house, as well as a secured loan. He is in a debt management plan and is paying £181.32 per month.
Payplan is helping a 55-year-old divorcee in £52,277 of debt. She is a full-time, live-in carer and has a mortgaged property which she rents out. Her debts were caused by her business failing. She used credit cards and loans to buy stock and machines. She is in a debt management plan and is paying £319.95 per month.
Payplan is helping a 58-year-old man who is retired and lives with his wife in a rented house. The couple have £26,000 of unsecured debt. He was involved in a near-fatal lorry accident which left him with health problems that meant he had to give up work. He is in a debt management plan and pays £126.51 per month.

Related Payplan Debt News

Older People In Debt

Justabank Helps Payplan Clients Save Money Amidst Financial Turmoil

Filed Under Consumer News, Financial News, Money Saving Tips, Personal Finance, UK Debt News | 1 Comment

Volatile and Unpredictable - A Week of Financial Turmoil

The last seven days have been some of the most volatile, unpredictable and potentially damaging to the world’s economy for several decades.

In the UK alone, the financial problems of its largest mortgage lender HBOS has prompted a massive takeover deal worth £12.2 billion by Lloyds TSB.

UK Mortgage lending has itself recorded a 36% drop compared with August last year, according to the Council of Mortgage Lenders (CML). And worldwide, the collapse of Lehman Brothers, and the problems facing large investment and insurance companies like Merrill Lynch and AIG have led to fears of financial meltdown across the world’s strongest economies. Many financial commentators are now more nervous than ever about what this means for consumers.

Many UK Families Struggling Financially for Several Years

However, it’s easy to forget that many families in the UK were already financially overstretched, well before the Credit Crunch and recent hikes in food, petrol, gas and electricity prices hit home. Consumer debts such as credit cards had already reached record levels, and many individuals, families and businesses had found themselves with serious debt problems resulting from years of overspending and budget mis-management.

Recent problems - such as rising inflation, rising living costs and rising unemployment - can only add to what was already becoming a problem too big to handle for many in the UK.

Justabank Can Save Clients Money

Especially at times like these, Payplan believes it’s really important that its clients are given all the tools possible to help them take control of their debts, whether through a free Debt Management Plan (DMP) or an IVA.

This is why Payplan gives all its clients free access to Justabank, a unique online service that allows clients to make and track payments, monitor payment dates and keep an eye on outstanding debts to each and every creditor giving them the confidence that creditors are being paid and their debts are reducing.

Help and Support with Legal Threats

Not only this, Justabank offers further support, information and advice for common situations that can arise when dealing with debt, such as what to do when receiving letters threatening legal action (eg county court judgments or CCJs).

Justabank Can Help Debtors Reduce Their Expenditure

Importantly, during this period of economic uncertainty, Justabank also gives clients access to numerous special offers and advice on complimentary products that could save them money on their essential expenditure – these include things such as ensuring that their home and car insurances remain competitive, utility bills such as the phone, gas or electricity are not costing them more than they should and that they can access their money by using the correct kind of bank account for their situation.

It’s really important to Payplan that their clients’ debt solutions succeed, so by helping them save money on their monthly budget in this way, Payplan believe that Justabank can help ease the pressure that dealing with debt can bring.

Through Justabank, clients also have direct contact with their case officers online, allowing them to help and support clients quickly, whilst reassuring them at the times when it’s needed most.

Reassurance, Help & Support - Justabank is free for Payplan clients

Reassurance, help and support – this is what Justabank is for, and what’s more, it’s completely free. If you’d like further information about Justabank, then you can visit Payplan’s website or simply contact a Payplan debt adviser for further details.

Help For Fuel Bills Demanded By UK Charities

Filed Under Consumer News, Financial News, UK Debt News | 4 Comments

Fuel Bill Help Urgently Needed Due to Gas/Electricity Bills Rise

Government help for fuel bills has been demanded by consumer groups and charities following yet further announcements from two more leading energy providers explaining the increase in fuel prices for their customers. This almost ends a record round of fuel price increases - with another round due in the New Year.

Long Term Fuel Poverty Plan Needed Say Charities

Scottish Power and Npower have joined British Gas, EON, Scottish and Southern Energy and EDF by rising their prices substantially, and now charities campaigning against fuel poverty (those who spend more than 10% of their income on fuel) are worried that without a long term plan, the problem of fuel poverty will reach unmanageable proportions as the provision of help for fuel bills is ignored.

According to charity National Energy Action, 1 in 5 households will fall into the 10% of fuel poor, and together with Child Poverty Action and Age Concern, the charities are demanding immediate action from the UK Government.

UK Government ‘Looking at Extra Support’

John Hutton, the Government’s Business Secretary said this week in an interview for the Daily Telegraph that:

“The era of cheap energy is over. The question is how are we going to adjust to that and what sort of help can we provide to those who are going to struggle the most. There is genuine concern about the difficulties that people will face paying their heating bills over the coming winter and we are looking at extra support.”

This seems to have done little to reassure the charities campaigning for those needing help for fuel bills. In The Guardian today, Paul Dornan from Child Poverty Action said:

“The poorest families now face an urgent situation … The voluntary approach is failing and Government and the energy companies need a plan of action within weeks.”

What Help for Fuel Bills is Available Right Now?

Finding help for fuel bills is clearly a very important issue, and so here are previous Payplan Debt News articles discussing this issue and offering further advice to those who require fuel debt assistance:

Solid Fuel - Cheaper than Gas/Electricity?

Top 5 Energy Saving tips from Payplan

£225 Million of Help for Fuel Bills

The BBC website also contains useful information to those needing help for fuel bills:

BBC Website - Where to go to for help with fuel bills?

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