Britain is set to face a debt interest bill of £70billion. This was the forecast of financial hard times outlined by new Prime Minister David Cameron. To put it another way, 10 pence in every pound of tax paid in the UK will go directly to paying off the interest on our national debt. That’s more than is spent on public transport, combating climate change and the English schools system. These harsh financials are in spite of the various debt solutions that the new government is proposing.

The serious debt problem that Britain is currently facing is not on the same level as that which is being faced by Greece and at the moment, our national credit rating would still be respectable. However, even with the detailed and severe cuts that have been drawn up by the Conservative and Liberal Democrat coalition government, the UK could still struggle to solve this difficult debt problem.

Of course, these substantial cuts are the country’s best chance to avoid a national credit meltdown on a level with that suffered by Greece. Last year, Britain’s deficit was over 11% of Gross Domestic Product (GDP). The government has stated that its debt solution revolves around cutting this GDP to just over 4% by 2014. Sadly though, many financial analysts still view this projection as insufficient.

So, it might be the case that we see even more severe cuts to public spending in order to meet these targets than the government is currently projecting. Here at Harrington Brooks, we know that a frank assessment of your financial situation and a keen understanding of the extent of your debt problem are essential to finding a suitable solution. We also know that everyone’s circumstances are different, so the solution that works for someone may not necessarily work for someone else. This is an important point to consider when drawing a comparison between our situation in the UK and that which exists elsewhere in Europe; Greece, for example.

With any deep rooted, long-term debt solution, the inherent danger is that the initial fervour and good intentions give way to impatience as the debt solution fails to be a quick fix to your debt problem. There is no quick fix to your debt problem and it is important that you employ the right debt solution for you, and you are committed to making repayments and becoming debt free.

As for the UK, cutting the deficit will take years. Britain’s national debt was at about 40% of GDP before the credit crunch and it will be a long time until it’s at that level again. It can be though. All it takes is dedication to the right debt solution and the problem will be solved. The same can be said for you.

Student debt is difficult situation to manage. On one hand, in order to get the better jobs, we’re raised to believe a university education will stand us in the best stead. In terms of personal finance though, it is strange that students are actively encouraged to take on this debt without any proper education in managing their personal finance. After all, the current employment environment in the UK does not instil much confidence. Your financial circumstances can change without warning and any speculative financial planning can quickly fall by the wayside. That’s why you have to be as prepared as possible and be quick to react when debt problems arise.

Summing this relationship up quite nicely is a story that has recently emerged from The University of Cumbria. We talk quite often about the level of student debt in the UK but every once in a while, we must actually look at the debt of the institutions themselves. For The University of Cumbria, which is facing debts amounting to £30million, the recession and restrictions on student intake have been blamed for its ongoing debt problems.

In fact, the extent of the problem is such that the University has been prompted to appoint an interim vice chancellor in order to replace Peter McCaffery, whose tenure was ended prematurely. Mr McCaffery had held the position of Vice Chancellor since the University opened in 2009 but Professor Graham Upton will now officially take up the post this week.

The chairman of the University’s board of directors, the Venerable Peter Ballard, was buoyed by the number of applications that the University of Cumbria still receives on a regular basis and was confident that the staff and students would continue to uphold the same high academic standards that they have displayed up to this point.

However, as a fitting reminder that no institution can guarantee employment, the University of Cumbria has been forced to meet several challenges in a difficult economic environment and as a result, Mr McCaffery’s position as vice chancellor was brought to a premature conclusion. A major part of his role while at the university was to establish a financial recovery plan. However, up to 200 jobs look set to be cut at all levels of the university’s staff. The university have set a further target of an additional 1,000 students to be recruited by 2012.

Sadly though, the University’s Ambleside campus project is being placed on hold indefinitely and the intended development of the campus in Carlisle has been cancelled. These cuts are an effort to stem the loss of an estimated £800,000 a month. It just goes to show that regardless of the sector in which you operate, the recession is indiscriminate in its effect. Universities have always operated in a speculative manner, with implied levels of student debt and no guarantee of return on investment. You would imagine that the Vice Chancellor would be relatively safe in his position but it just goes to show that anyone’s financial situation can change at any time.

That’s why it’s good, when struggling with personal debt problems of your own, to be able to depend on specialist debt advisors like those at Harrington Brooks.

Official figures suggest that the recession has seen the average household’s retirement savings reduced by over £10,000. The Office for National Statistics puts the figure at a staggering £400 billion drop in the UK population’s combined pensions in a single year. It’s not just down to personal hardships affecting savings either; for the first time in a long time, companies have cut the amount they pay into workers’ pension schemes.

These figures give us our first real insight into the effect that the recession will have on people’s retirement. The huge drop in the value of people’s pensions will have the knock on effect of postponing their retirement until they feel they can afford it. After all, there is no guarantee that you’ll have paid off your mortgage by the time you hit retirement age. There is also the chance that unexpected expenses can put extra pressure on your financial situation. It all points to the added importance of your savings and clearing yourself of your debt burden by the time you leave employment. The sad truth is that, due to a couple of significant drops in the price of shares, the value of the average pension has hardly increased at all in the last ten years. This trend looks set to continue for another ten years, as the UK economy struggles to recover from the recession.

In 2008, the average amount being saved was less than 2% of a person’s earnings. That’s the lowest proportion put towards savings since the 1950s. The Office of National Statistics put the UK’s total pension fund in 2007 at £2.2 trillion, this fell to £1.8 trillion in 2008 after the fall in the stock market. At the same time, employers’ pension contributions fell by almost £6 billion. Essentially, if you earn £50,000 a year, you’ll have £250 less going into your pension. That’s £250 that would otherwise be going towards the savings that keep you afloat in your retirement. That’s £250 that would be going to pay off your debts when your salary is no longer there to rely on. You should act on this now and free yourself from the burden of bad debt before your retirement. There are debt solutions on the market that can help you achieve this so visit www.harringtonbrooks.co.uk and use the free, no obligation debt wizard to find your best option.

Recent figures have shown that house prices in the UK jumped up by 1.2% in the first week of 2010 alone. January saw an upswing in confidence from sellers appearing on the market and as a result, we’ve witnessed a significant increase in asking prices. Across England and Wales, this has translated to an increase in the average house price by almost half a percent. This may not seem to be a huge change but if the trend in increased seller confidence continues and the asking price for homes maintains this same rate of growth, the impact on the average house price in the UK will be significant.

In addition to this, estate agents also estimate that the number of homes currently on the market in the UK is at its lowest for a decade. This could be impacting on seller confidence as the short supply on the housing market will also be pushing up prices. There are, no-doubt, a host of contributing factors but what is clear is that in direct comparison with the same period last year, the average asking price of a British home has gone up by nearly 5%. This simply means that sellers are confident in asking for more money but that in itself can serve as an indicator of the wider economy. Rather than the economic doom and gloom of the credit crunch years, sellers are infecting the housing market and wider financial environment with a sense of growing optimism.

The number of homes for sale is far lower than two years ago. This can point to a population which felt at one time that they had to sell up to free equity from their property but now feel settled. This could be a result of the emergency rate of interest, which has allowed those people with a tracker mortgage to pay off far more of their outstanding debt. It could also be the result of the distinct shortage of on new-build properties on the market as builders and developers reigned in their activities during the difficult financial climate. For whatever reason though, prospective buyers have extremely limited choice in the most popular areas.

So, for homeowners who are facing debt problems, their biggest asset could well be their solution. There is a range of options open to homeowners looking to use the equity in their home to pay off their outstanding debt. It can be used as collateral for a debt consolidation loan; letting you secure your unsecured debts and could offer you a better rate of interest, as well as a possibly easier to service repayment plan. Although you should never commit to a debt consolidation loan that you cannot afford, if the debt becomes secured against your home it is at risk if you fail to keep to the agreed repayments, and you should also be aware that you could be paying off this debt over a longer period of time.

There is also the option to just sell up, down-size and free some funds to pay off your debt. Also, there is the option to remortgage your home. If you’re one of those with a tracker mortgage that’s reaped the benefits of the emergency interest rate, now could be a good opportunity to switch to a fixed rate and free up some equity to settle debts, always seek professional advice.

There are a lot of choices to be made and the very first one should be where you go for advice about the best course of action. This discussion shouldn’t be a difficult one though. Harrington Brooks are one of the longest established and most trusted financial institutions in the UK. They are on hand to offer free, impartial debt advice to anyone facing the threat of bankruptcy and repossession. The expert team of debt advisors have a lot of experience in this area and know that everyone’s financial circumstances are different. Therefore, they can advise you on the best solution to your specific debt problem.

Visit www.harringtonbrooks.co.uk and use the fast, free debt wizard for a quick insight into the solutions that could suit you. Then, talk to one of the team and they’ll tailor a plan to free you from debt and make the most of your assets.

Here are the top ten potential pitfalls of personal finance, courtesy of Harrington Brooks. These all pose a significant threat to your financial security and can each be noteworthy contributories to severe debt problems, which could lead to bankruptcy and even repossession of your home and other assets.

1. Beware of the extras that are on offer with your bank’s current account. Banks can charge up to £15 a month for these so called “package accounts”, which can incorporate things like travel insurance and breakdown cover. If you can take full advantage of these benefits, the account may seem worth the money. However, if you’re not actually going to use these extras then it’s a waste of money.

2. While renting electrical items like televisions may at first appear to be a good idea, they might not always be. It’s worth bearing in mind that renting, no-matter what it is, leaves you with nothing. It can also work out to be a lot more expensive. You could find that a few months of saving will actually allow you to just buy the appliance.

3. Mobile phone deals that offer free gifts, like laptops and games consoles, when you sign up to a contract have proven to be quite popular. However, savvy shoppers will read the small print of course, knowing that they could save hundreds of pounds over the term of the contract and could buy a better laptop elsewhere.

4. Investing can be fraught with problems and has resulted in many cases of bankruptcy over the years. If you are looking to invest, don’t buy directly from the fund management group as they’ll charge you a substantial fee, often up to 5 per cent, which will eat into your investment before you’ve even started. The same funds can be picked up cheaper through independent financial advisers or brokers.

5. Remember, a store card is just like a credit card but instead of charging about 17%, store cards will usually charge interest rates closer to 30%. Essentially, should you stay on top of your spending and pay off any outstanding debt before the end of the month, there will be no problem. However, paying 30% interest on your debt is going to make it hard to pay off.

6. Spreading the cost of your insurance premium over the year can incur interest rates of over 20%. So, if you can afford to pay it all at once, it’ll save you money. You just have to decide whether the convenience of monthly payments is worth the extra cost.

7. Are you being charged extra for payment protection insurance which may be overly expensive and wholly unnecessary? Often sold with a personal loan or a credit card, the theory is that they will cover any monthly repayments missed due to accident, sickness or unemployment. However, they’re so bad that the Financial Services Authority must closely monitor the sale of any such policy. Always seek professional advice before cancelling any policies attached with your insurance so you can be sure that it is the best thing for you.

8. Simply another form of insurance that you could well do without, the extended warranty could well end up costing you more than it would to buy a replacement for the item. Bear in mind that products will tend to have a manufacturer’s guarantee and you’re statutory rights exist to ensure products are of satisfactory quality.

9. Be sceptical of investing in affinity accounts. These let you donate some of your interest to a cause but don’t actually work out as a good deal for anyone. Is it worth a far less competitive rate to feel affiliated to your favourite football team? Go for something with a better rate and donate money separately. You’ll all be better off.

10. Buying mobile phone insurance from the supplier is essentially paying twice for the same cover. First, check your home insurance, as it could cover you under accidental damage. Do check the excess though; it could be more than the phone’s worth.

Harrington Brooks aim to solve your debt problems. The easiest way to do that is to simply help you to avoid debt in the first place. So, we’re glad to be able to offer some financial pointers. However, if you’re already in debt, we’re experts in helping you solve the problem of bad debt quickly and easily. We can provide you with a debt solution tailored to suit your specific needs, so visit www.harringtonbrooks.co.uk and take the fast, free debt test to find out the best way to solve your financial problem.