Almost 20 per cent of those planning to retire this year will do so with debts outstanding, averaging £21,800, according to new research from Prudential.

The insurer’s ‘Class of’ research into the future plans, finances and aspirations of those planning to retire in the next 12 months is now in its eighth year. This year’s results show that the ‘Class of 2015’ are more likely to retire in debt than those who gave up work last year – (17 per cent of those retiring in 2014 said they would have debts outstanding when they retired, compared with 19 per cent this year).

Prudential’s research has tracked retiree debt since 2011 and shows that despite some small fluctuations, the proportion of those retiring with debts outstanding has remained consistently around the one in five mark. There is a noticeable trend though that retirees’ average amount of debt has reduced over the years.

Those retiring with debts in 2015 say they will owe on average £16,400 less than those who retired in 2012 – representing an encouraging 43 per cent drop in the last three years.

The average ‘Class of 2015’ retiree with debts says that it will be just over three years before they are paid off – this also compares favourably with last year’s retirees who said it would take them four years. Meanwhile, almost one in 10 (nine per cent) of this year’s retirees with debts expect to take nine or more years to clear their debts, and a further five per cent believe they will never pay them off.

More than two in five (43 per cent) of this year’s retirees with debts have an outstanding mortgage – another figure that has remained stubbornly high since its peak at 52 per cent in 2011. Over a half (55 per cent) will have credit card debts.

A spokesman for Prudential, said: “Our new research shows a welcome downward trend in the average amount of debt for people retiring this year. However, it is a concern that the proportion of people reaching the retirement milestone still owing money is refusing to fall.

For many, retirement is a time in life when it is necessary to re-assess household budgets, and any debts outstanding will inevitably make this job more difficult. A consultation with a financial adviser or retirement specialist can help people to get their finances ready for life after work.

“Debt does not have to be a major issue in retirement though, as long as people have a realistic repayment plan in place. Citizens Advice Bureaux can provide free help on managing and paying off debt, and the Pensions Advisory Service can help with retirement income planning and related issues.”

The latest research from  Sainsbury’s Bank Loans suggests that up to 212,000 people could take out personal loans worth up to £2.2 billion in the first three months of the year for debt consolidation.

The Bank estimates that this figure could be equal to around a third of all personal loans taken out during January, February and March. The average loan size taken out to consolidate debts is estimated to be around £10,300.

To those looking to consolidate debts, Sainsbury’s Bank is encouraging them to ensure the monthly repayments will be lower under the terms of the new loan and that they can afford to cover any fees from their old lenders, before going ahead.

Simon Ranson, Head of Banking at Sainsbury’s Bank said: “Using a personal loan to consolidate debts can be a good way to bring monthly repayments down and simplify them under one provider. However, it’s crucial you make sure you’re going to see a real advantage to moving, so work out if the total interest paid on the balance at the end of the repayment term will be lower, or at least comparable.”

Andrew Hagger Personal Finance Expert from Moneycomms said; “January is the month when many people take stock of their financial situation and plan for the year ahead, so it’s no surprise that some are consolidating their finances, particularly with some of the attractive loan rates currently available.

Sainsbury’s Bank has a loan switcher calculator to help customers gauge whether they might save money by switching their existing loan to a Sainsbury’s Bank loan.

The Bank, which consistently offers competitive interest rates on personal loans also has a Price Promise Guarantee. This means that if a customer is offered a “like for like” loan that has a lower APR with another lender, Sainsbury’s Bank will beat it by 0.1%. This is subject to qualifying for the Offer and customers must not have already accepted its Standard Loan offer by signing and returning a Sainsbury’s Loan agreement . Car dealership loans and finance excluded.

A new survey from HomeServe reveals that millions of UK homeowners are concerned about unexpected costs hitting strained family budgets this winter.

More than half (51%) of UK homeowners polled in HomeServe’s “Unexpected Costs of Winter” survey reveal they are concerned by boiler breakdowns, expensive car repairs, or burst pipes – examples of unexpected winter costs that can rise into hundreds of pounds.

Strained household budgets (26%), the costs of Christmas and high seasonal spending (20%), rising household bills and outgoings (17%) and a lack of savings (11%) are leading to homeowner concerns, according to the representative survey of 2,000 UK homeowners conducted by Consumer Intelligence.

Unexpected costs topping this year’s list of concerns are boiler breakdown (chosen by 36% of those polled), car breakdown (32%), frozen or burst pipes (27%), appliance breakdowns (23%) and plumbing problems (21%). Storm damage (18%) and unplanned energy bill hikes (13%) also featured highly in the survey.

Greg Reed, HomeServe’s Chief Marketing Officer, said: “It’s not surprising that typical home emergencies feature so highly on the list of concerns this winter. The survey shows that people are having to make some tough financial choices, and we are on hand to help them wherever we can.”

To coincide with the survey, HomeServe has launched a new interactive Seasonal House – available by visiting http://www.homeserve.com/help-advice/seasonalhouse – which highlights potential problems in the home this winter and offers a range of useful tips for UK homeowners and landlords.

“There are many simple steps people can take to protect their homes in the weeks and months leading up to the peak of winter,” added Reed. “By taking care of a few things now, homeowners and landlords can limit their chances of facing potentially more expensive or unexpected costs later on.”

Millions of UK homeowners are believed to have experienced at least one unexpected cost in 2014 (a total of 64% of those polled) and almost three in ten (29%) had problems paying for it. The research also reveals a stark generational gap, with almost half of 18-24 year olds (49%) struggling to fund their unexpected costs, compared to just 8% of over 65s.

 

New research suggests that many mobile phone customers are paying over the odds by an average of almost £160 per annum because they are on an unsuitable tariff.

Consumer group Which? claims that more than 7 out of 10 customers are paying more than they need to for unsuitable tariffs. They either don’t use enough of their data, text and minute allowance or they exceed their monthly allowance.

The Which? investigation found that while 4 in 10 customers think there is a more suitable package out there for them, almost half have never switched provider.

Which? is calling on providers and regulator Ofcom to make it easy for customers to switch and make prices easier to understand and compare.

Which? spokesman, Richard Lloyd, said: “It’s shocking that consumers are overpaying by billions of pounds for mobile phone contracts that just don’t suit their needs. Mobile phone companies must do more to help people get the best deal, making switching hassle free and ensuring that pricing is transparent.

“If we don’t see mobile firms making voluntary improvements then we will ask the regulator Ofcom to step in.”

The much anticipated Pensioner bonds from National Savings & Investments (NS&I) were launched last Thursday (16 Jan) but the unprecedented demand  caused the NS&I website to crash.

The bonds offer two choices for savers aged 65 plus – a one-year Guaranteed Growth Bond paying 2.8% AER before tax (2.24% net of 20% tax) and a three-year bond paying 4% AER (3.2% after  basic rate tax).

Interest is paid on maturity for the one-year bond and annually on the three year option. The minimum amount that can be deposited is £500 and the maximum £10,000 per person and the bonds can be held by an individual or jointly by couples.

In the first two days £1.15 billion worth of bonds had been snapped up – more than 10% of the total £10 billion of funds available under this government initiative.

Money expert Andrew Hagger of Moneycomms.co.uk said: It just shows how much pent up demand there is for decent savings rates – with standard savings accounts offering such miserly returns I expect demand to remain high and these bonds to sell out within the next three or four weeks.”

New research from Gocompare.com has found that nearly half of UK consumers didn’t switch any of the 10 most popular financial products in 2014, including car insurance, home insurance, energy provider, bank account and broadband.

Astonishingly it found that 1 in 5 admitted to NEVER having switched their mortgage lender, bank, car insurer, home insurer, broadband provider, mobile phone or landline providers, energy provider, savings account or credit card .

59% of the 2011 UK adults who took part in the research felt that the worst effects of the Government’s ‘austerity’ measures were still to come and 55% were expecting 2015 to be a tough year financially. However, Gocompare.com found that millions of consumers could be saving £4.7 billion between them on just three common household expenses.

The most switched financial product is car insurance with 35% of drivers changing their insurer in the last 12 months. However, 34% have not switched in the last three years and half of those (17%) have never switched.

Home insurance is another product which is easy to switch and 29% of consumers did just that in 2014.  32% of householders have not switched their home insurer in the last 3 years including 21% who have never switched. Those customers could be missing out on a collective saving of £611 million.

Lee Griffin, Gocompare.com’s insurance spokesman, said: “Loyal customers are throwing away billions of pounds of savings by sticking with the same financial services and household utility providers year after year. Consumers who don’t regularly ditch and switch uncompetitive products and services such as their car and home insurance, energy tariff, mobile phone and broadband deals are paying out hundreds of pounds a year more than they need to in household bills.

“There are considerable savings to be made, but the only way to be sure of getting the very best deal is to check it for yourself by comparing what’s on offer from the competition. If your insurer, bank or energy provider thinks you’ll be happy to stay and keep paying over the odds, they’ll be equally happy to let you.

Lloyds Bank has today a new travel notification service for online and mobile banking customers, which enables customers to let the bank know when they are going abroad.

Once customers are logged in to their online or mobile banking, they can now go into their profile and update the dates that they are going to be overseas, with the notification immediately effective.

The new travel service means that customers have greater choice to advise the Bank of their travel plans.

The travel notification can be set up  from the Internet Banking homepage, where customers can also add their travel destination and the dates of their travel.

The bank hopes that this initiative will give customers greater confidence and peace of mind when spending abroad, whether that’s paying for a hotel, meal or hire car.

Adrian Bryant, Director of Digital at Lloyds Bank commented: “We know that our customers find travel notification a useful service and previously they would have had to visit a branch or activate this through telephone banking. Enabling customers to provide us with this information in real time means that they can do it where and when it’s convenient for them, even if that is 2am in a departure lounge.

With digitally active Lloyds Bank customers now able to take advantage of the new service, it is expected that travel notifications will increase by around 50% over the next 12 months.”

 

 

The CPI measure of UK inflation slumped to 0.5% in the year to December, a sharp fall from the 1% November figure reported by the Office for National Statistics (ONS).

Inflation now stands at its lowest level for almost fifteen years when it was also at 0.5% back in  in May 2000.

The ONS said the major factors for the fall was due to gas and electricity pricing from 2103 being no longer part of the equation, and also a further drop in prices for vehicle fuel at the forecourts.

This 0.5% figure means that the Governor of the Bank of England must explain to the government why inflation is well off its 2% target.

The last minutes of the Bank of England’s MPC meeting showed that committee members had differing views on future inflation levels, with some predicting it would remain below target for longer, whilst others said there were external risks that could still push it over the 2% level.

The latest Inflation Report (November 2014), predicted CPI would sit below 1% in the next six months, and said it may stay that way for longer than originally anticipated due to the sharp fall in the price of crude oil.

Premiums for car insurance are too high, the competition watchdog has said.

The competition commission’s investigation of the £11bn motor insurance market found it was not working well for motorists . Too many drivers were footing the bill for unnecessary costs that were needed during the claims process for accidents and that this is adding between £150m and £200m a year to motorists’ premiums. These costs are initially for the drivers who have been in the accident but always end up feeding through to everyone else’s policy.

The commission is deciding whether to make a driver’s own insurer responsible for providing a replacement vehicle or to give insurers that are at fault a greater opportunity to take control over managing claims.

There could also be caps on the costs of providing a replacement motor and on the costs the repair peoples cars. This goes along with compulsory audits of repair quality, this is after the watchdog found that many repairs have not been completed to the required standard.

Other findings where with the sale of add-on products it is hard for customers to find the best value products.The Association of British Insurers (ABI) said it hoped the commission’s work would lead to lower premiums for customers.

Its head of motor insurance, James Dalton, said: “As an industry we remain absolutely committed to improving the car insurance market for hard-pressed motorists.”

According to a UK debt charity more than six million people will struggle with their finances in January as a result of too much spending in the run up to Christmas.

The Money Advice Trust says it is expecting its National Debtline advice service to get very busy this month, after research suggests one in eight people are “likely to fall behind with their finances” due to festive spending.

The research also found that 23% of Britons will save earlier for Christmas 2015 than they did in 2014; while a third (34%) had to borrow money to pay for presents.

Worryingly, more than one in five peole bought Christmas food on credit.

Joanna Elson OBE, chief executive of the Money Advice Trust, said: “After a Christmas that millions of people put on credit, we are unfortunately expecting an increase in debt problems in the New Year. The fact that so many people went straight online for advice on Boxing Day shows how fragile many households feel their finances are going into 2015.”

“More concerning, however, are the millions of people who may not seek advice at all, and thousands who will get off to a bad start to 2015 by turning to a fee-charging debt management company that only wants to make a profit out of their situation.”

“Our New Year message is simple. If you are dreading the arrival of that first credit card bill in a couple of weeks, now is the time to act. Set a budget by working out how much you have coming in and how much you need to spend each month, and open all of your statements to get a handle on how much you owe.”