UK Households Feeling The Burden Of Debt

The Office for National Statistics recently conducted a study into the change in household debt pre-recession compared to the first few years of it coming into effect.  The research was named the Wealth and Assets survey and focused on the years 2006-08 and 2008-10.

The research found the median amount borrowed between 2006-08 and 2008-10 increased from £400 to £3,200.  Therefore an average UK household owed £3,200 on credit cards, overdraft or loan during the time Britain hit recession. Credit and store cards that are not settled each month, overdrafts and all forms of fixed-term loans are categorized as household financial debt by the ONS. Mortgages however are not included.

£94.7bn is the figure for the total debt, excluding mortgages, that Britons had to deal with between 2008 and 2010.  Half of all houses included in the study believed that their debt was a burden.

The figures show the debt burden for households in the UK rose by 10.3%. This rise is not however applicable for those living in London. Elsewhere, for example in the North-West, debt increased by 41.7% and by a third in the East Midlands. The highest amount of household debt at £4,000 was found in the South-East, whereas Welsh household had the lowest at £2,000.

“It seems reasonable to suspect that household debt has risen further since 2008-10, with people’s purchasing power being squeezed by extended weak income growth and elevated inflation”, said Howard Archer, chief economist at IHS Global Insight.

Less wealthy households were 13 times more likely to regard their debts as a burden compared to those in wealthier households. The findings also showed that household headed by younger people had more debt as opposed to those in older age groups. Over 65s had the least amount of debt. Lone parents are thought to have the highest amount of financial debt, yet had a total of £1,600 whereas married or cohabiting people with no children had a high £5,500.

Debt continues to be a heavy burden on many households across the UK and indeed over the world.  Advice and help is available from a number of charities and organisations, for example Debt Free Direct.

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The Key to a Successful Business!

Post- Christmas can be a tricky time in the workplace; you still have the miserable weather but without all the fun and festivity. That’s why it’s important for employers to try and boost morale, and prove to those who work there that this year is going to be the best year yet; not only for the business, but for them as individual. But how, and what can guarantee that the company is going to succeed? Well, one essential element which we believe you MUST make a priority is to be sure that all your staff are happy in their job. But how? Well, it’s not an easy task but we have some top tips to getting your business on the right track for the New Year.

Team building

An important aspect to address is that you have a positive and friendly atmosphere in the workplace. If your staff are miserable and dread coming in every morning, then this can make an impact on other areas of the business and consequently be counterproductive. That’s why it’s fundamental to regularly hold team building activities to maintain enthusiasm. One option is to have out of office events. Why not go paintballing or treat staff to a night out? Or if you’re feeling particularly generous, then corporate entertainment packages are a fantastic means of keeping employees happy.

Reward good work

One way to ensure that workers are enjoying their job is to reward staff success. Acknowledging achievement lets employees know that their efforts are appreciated, and this in turn will give them the confidence to continue to strive for the best. But in what ways can you reward good work? Bonuses and prizes for those who go the extra mile are great incentives, but making the rest of the staff aware of individual accomplishments is also another way for employees to feel valued. Whatever you decide, ensuring no success is ignored is key to making your business prosper.

Training

As well as offering rewards and incentives, providing a high quality training scheme is also a means of making staff feel that their job is worthwhile. Asking employees to set personal goals and then assisting them to achieve them is a good way to, not only establish a better relationship with staff, but it also gives workers the chance to see how much they’re progressing. Guaranteeing excellent training allows employees to reach their potential, therefore encouraging them to be happier at work; something which will certainly make your business come out on top.

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Top Tips for a Successful Interview

You’ve probably envisioned your dream job already. Busy office, business printers working away, a strong smell of coffee permeating the air. Lovely. It feels close enough to touch! However, to achieve that highflying career, you first need to make it through the gruelling ordeal of, dare we say it, an interview! Although, as painful as it sounds, the truth is that it doesn’t have to be so bad. Don’t believe us? Here are our top interview tips.

Research

Prior to the interview, be sure to thoroughly research not only the company, but also the job position you’ve applied for. Having a greater knowledge of what you’re embarking on puts you into a stronger position with the interviewer; in other words, there’s less likely to be any nasty surprises! Make the most of the internet when working on your research.  Consider the potential questions which they’re likely to ask you, and do a little preparation for these in advance; this will certainly give you more confidence when speaking.

Double check

Importantly, don’t forget to check and recheck the essentials; where it’s going to be held, what time you need to be there and how the interview’s going to run. All interviews are organised differently, and sometimes they require a little extra preparation. So make sure that you’re aware of the structure of the interview. Is there going to an assessment, tests, team building? These are all crucial factors you need to know.

Attitude

It’s key to have a positive attitude from the start. Don’t go into the interview with the belief that you’re never going to get the job, or you won’t! Sometimes nerves can be a good thing, but don’t let them get the better of you. Make sure that you get a good night’s sleep, that you arrive in plenty of time and that you’re dressed to impress. Cover all these aspects and you’ll be more than ready!

Show off

An interview is your time to shine, so don’t hold back! Without being too over confident, prove to the employer that you’re enthusiastic, qualified yet willing to learn, and ultimately the right person for the role. Inform them of all your achievements and how the skills you gained from them are transferable to the job position.

One way of approaching this is by using the STAR technique when answering questions. First describe the situation (what the challenge was) then explain the task (what you needed to accomplish) then what action you took, and finally the results of this.  Using this method is a great way to stop you from just giving one word answers and really demonstrates to the employer that you’re self-aware. Combining this assertiveness with good body language will definitely get you on the road to success!

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Legal Matters: What Funding Options Are Available?

Taking a legal case to court can end up costing a lot of money, and if you haven’t the funds available at to begin with you may be interested in seeking funding. This could help you to finance your legal battle and, should you win, you will then be able to repay the loan while still retaining a good percentage of the damages.

There have been many different funding methods available over the years, and while some of them are no longer used today they have helped the legal system to evolve.

Some of these methods have included:

1)     Consumer Credit Agreements (CCA)

This is a historic funding method that is no longer used due to the risks that are involved.

Individuals could take out a CCA when taking a case to court. They would apply to a funding house and, if approved, would receive a loan with a repayment term or around three years or less. They would then withdraw money in order to pay for solicitor disbursements and other legal fees. Their loan would be protected with After the Event (ATE) insurance in case their case failed.

The main problem with this funding method was that the loan agreements can with very high interest fees, meaning some people struggled to repay them. They were no longer used when the claims companies used within this method went bust and left ATE insurance companies with huge losses.

2)     Direct lending

This method was somewhat better than CCAs and was certainly easier for law firms, but it too was rejected after some time. The method involved the law firm taking on the loan, which solicitors could then use to pay for legal fees directly. This came with high risk though.

3)     Damages Based Agreements (DBAs)

This is a funding method which has been introduced very recently. It is a contract between an individual and a solicitor that is used to set out the payment terms for the legal case. It is variant of the ‘no win, no fee’ arrangement and was introduced in an attempt to ensure solicitors had a vested interest in cases. The contract stipulates how much the individual will pay to the lawyer should they win their case and a specific percentage of the damages is decided upon beforehand.

At the moment CFAs are used in ‘no win, no fee’ cases, but the government hopes to implement DBAs across the board.

4)     Litigation funding

This funding option is only available to larger businesses fighting legal battles of a very high value. This is because there is no real market for funding smaller cases. Litigation funding companies can provide businesses and law firms with the funds required to complete the case, after which the third party funder can recoup its loan. This includes the original investment plus a Return on Investment (ROI).

Those seeking funding for legal cases, whether they’re big or small, may be able to use some of these options.

 

This article was written by Aurora Johnson on behalf of Vannin Capital, a corporate litigation funding specialist. Click here to visit the official website if you’d like to find out more.

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How a Relevant Life Calculator Help Employers

A relevant life calculator helps employers calculate and demonstrate the difference in the overall expenses of offering their life insurance cover by means of a relevant life policy set up by the employer in comparison to a plan which the employees would have financed on their own.

Relevant life insurance plans are tax-exempt plans for assisting employers to offer financial security and life coverage to the workers. They are extremely ideal for small businesses that don’t qualify for a group life insurance scheme. High income individuals and directors of companies also use this cover to their advantage since benefits received under this policy are not considered under their annual or lifetime pension allowance.

How to use a relevant life calculator correctly

Using a relevant life calculator is not difficult. You just have to input the premium and the tax rates applicable and the net expenditures will be computed by the calculator. Given below are the fields where you need to enter the various figures:

  • Whether the premium is paid from dividends: Yes/ No
  • Company corporation tax rate (%)
  • Premium amount
  • What is the highest rate of tax for the individual covered under the policy
  • Employee national insurance rate (%)
  • Employee income tax rate (%)
  • Employer national insurance rate (%)

It is worth mentioning that the employee national insurance rate is included into the State Second Pension.

After entering the above mentioned inputs, the relevant life policy calculator will calculate the net cost and corporation tax relief. It will also give you the figure of the total amount that you can save.

Downloading this user-friendly tool

You can easily download the relevant life calculator to your personal computer. This helps you use the tool even if you are not online. You might use it when you are talking to a potential customer or you are not in your office. It is an .exe application and small in size so it will not occupy much of your disk space.

In simple terms, online relevant life policy calculator is an interactive widget which indicates what the net cost of a policy is and how much you can save through this type of cover with tax benefits. You can add this calculator to your account or embed it in your blog or website for convenience.

 

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Banks Could Face £10b Costs Over Swap Mis-Selling

11 British Banks including Barclays, Lloyds Banking Group, Santander UK and HSBC have agreed to evaluate the sales of interest rate swap products. The investigations will be supervised by the Financial Services Authority (FSA) and carried outside alongside independent auditors.

Groups representing the small businesses disadvantaged by being mis sold interest rate swaps have said tens of thousands of businesses were forced to lay off staff or shut as they struggled to pay charges on products they had been mis-lead into purchasing.

Whilst banks had set aside £730m to cover the costs of the scandal, last year, the number of cases put forward for review by the FSA have exceeded their expectations. Last week, sources within Barclays and the Royal bank of Scotland said there would be substantial increases to the money put aside for compensating businesses that were inappropriately sold financial products.

Estimates within the banks put the cost of redressing the issue at £1.5b. However, industry experts and lawyers have said banks are underestimating the cost of compensation. They have instead predicted banks may face a bill of up to £10b. Should this prove to be the case, the rate mis-selling episode would be on the same scale as the PPI scandal which cost banks over £12b. Initially banks had anticipated costs of around £3b but this quickly escalated.

The Business Secretary, Vince Cable has dismissed such claims saying that the swap rates mis-selling would not be on par with PPI.

Martin Wheatley, the man heading up the FSA investigation said that the regulator had “not ruled out” taking individual actions against individuals and institutions involved. However, he added that no decisions would be made until the reviews of around 40,000 cases dating back to September 2001 had been completed. Should the FSA fine any institutions for selling these complex financial products outside regulations, the cost of the scandal would further increase.

The final bill to the banks involved will only be clear in 12 months  – the deadline set by the FSA for all small and medium sized businesses affected to receive compensation.

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