Recent figures released suggest that UK debt problems are not solely the reserve of those on lower incomes. It seems that a near boundless supply of easy credit, followed up with the sting of the credit crunch, has forced even the most affluent to seek out debt support. Admittedly, the roots of their financial strife may be different, as in the vast majority of cases these high earners are not in difficulty through losing their job. Instead it seems to be that these high earners are also big spenders.
(more…)
Archive for the ‘Credit Crunch’ Category
No debt exemption for high income earners
Friday, October 9th, 2009Avoid the most common reasons for being denied credit
Wednesday, July 22nd, 2009The average UK Experian credit score is just above 760 out of a possible 999. A ‘prime’ credit score is anything over 680 and someone with that type of score typically finds it easier to get credit than someone with a lower score.
Many lenders deny credit applications based on certain criteria including details found in your credit file. If you have been denied credit in the past it is important that you understand what the reasons could be, and here are a few of the common reasons why your application for credit may have been denied:
How do depressions and recessions differ?
Saturday, April 25th, 2009No-one can give an exact description of the difference between a depression and recession, not even the IMF (The International Monetary Fund which is a private international organization that oversees the global financial system). There are many who have opinions but there is a lack of a single definition which will satisfy everyone.
It is easier to define a recession. A recession is, among other things, at least two successive quarters with lower production. Economic quarters last three months, i.e. there are four such quarters a year. Some characteristics are high levels of unemployment, a fall in wages, high inflation and fewer retail sales.
Countries affected by the recession
Tuesday, April 14th, 2009At its present state, many countries are being affected by the recession, some worse than others. Here is a list of countries that have been affected the most by the recession:
How will the bail-out affect your finances?
Saturday, March 28th, 2009The UK government planned a bail-out scheme late last year. Such schemes give or loan businesses money to prevent them from becoming bankrupt or liquidated. The government does this so that the public’s everyday life can continue as always. This is just one of the reasons for such bail-outs, however. The transport industry is one that the government considers necessary to all and may receive help more frequently.
So now there is a possibility of a second bail-out. There are a few things it will affect:
The economy won’t be the same again
The government hopes the bail-out package will stabilise the economy, increase consumers’ confidence in the economy and entice the banks to lend more. Certain people from the financial industry have been asking for this type of help since early last year; others think this may be the wrong thing to do. They believe that the government should tackle the real problem – banks’ unwillingness to lend during a period of negative growth.
We’ll still feel the crunch
We’re all hoping that the bail-out will get banks to feel more optimistic and lend to consumers again. The Council of Mortgage Lenders feels hopeful about the bail-out. Others are not as optimistic and predict more nationalisation of banks before the economy gets better.
Savers
Savings rates may stay as they are for now; however, the potential of lowering rates is there. This would be to counter the savings rates that have been kept high for too long.
Northern Rock
The bank was nationalised in 2008 and they were hoping to reduce the amount of loans by 60%. Other plans included fewer new loans and encouraging mortgage customers to switch their mortgages to other lenders after the fixed introductory period expires.
Northern Rock had a referral deal with Lloyds TSB and gave borrowers access to brokers who could help with remortgages at other institutions. All these measures were part of their agreement with the government.
Royal Bank of Scotland
The government now owns 70% of RBS. Their deal with the government is to increase the amount of mortgages and loans to businesses. The goal is to increase its current lending by more than £6 billion.
Your mortgage may become cheaper now, and people who do not have access to a large deposit may find it easier to get a mortgage.
