Breaking point: The families and pensioners crippled by soaring debt

Soaring average debt is pushing families and pensioners to breaking point as they sink deeper and deeper into the red, two new reports warn today.

One study found that one in five workers is in debt when they retire, often with a large mortgage and a personal loan. On average they owe £38,200.

Another report showed that the average family’s debts have ballooned by nearly 50 per cent over the last year.

In January last year, such families had average debts of £5,360. But this has soared to £7,944.

This does not include mortgage debts, only ‘unsecured’ debts such as an overdraft or a loan. If mortgages were included, the average family’s debt would be £110,000.

The first study, by insurance giant Prudential, polled more than 1,000 people who plan to retire this year.

On average, they will be spending £260 a month, a fifth of their monthly pension income of £1,290, just to pay off their debts.

Men’s debts tended to be much larger than women’s, at an average of £45,300 compared to £29,400.

 

Fact 

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Vince Smith-Hughes, a retirement income expert at Prudential, said: ‘Retiring with outstanding debts could be a sign of a lack of financial planning.’

The second report, from insurance firm Aviva, found many of the 10,000 families polled were meticulously planning their food shops to avoid waste and search out value brands.

But it also suggested that people ‘prioritise spending on immediate purchases and luxuries’, rather than facing up to the need to protect their families.

Around 50 per cent of families have a monthly satellite TV package, but only 40 per cent have life insurance.

from the Mail online

Could shops charge you more for products you've tweeted or 'liked' on Facebook?

Online shops already have a frightening amount of information at their fingertips - from whether you've purchased from them before, to what sites you've visited before you arrive at their shop, accessible via browsing history.

But new start-ups could move the idea to a new level - harvesting information from sources such as Facebook and Twitter to 'tweak' prices to what customers are willing to pay. 

In other words, if you've 'Liked' something, prepare to pay for it. 

One web entrepreneur, Alex Gannett, founder of CampusSplash says that 2012 will be 'the year of behavioural pricing' - a new type of e-commerce, where prices will be tweaked to include what customers are willing to pay.

Using such freely available information isn't an out-there idea. 

Demdex, acquired by Adobe last year, has built a business on harvesting user information from 'cookies' - invisible internet files -  to build up a picture of what audiences like so that advertisers can target people more effectively.

Tweaking prices to suit the individual could be the next step. 

The idea has already started raising privacy alarm bells. 

 

FACT 

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HOW IT WORKS

•  MAKE SURE YOU CLICK "CASHBACK SHOPPING" THROUGH FROM OUR SITE BEFORE YOU BUY ANYTHING ONLINE.      WWW.HEARTFINANCE.CO.UK
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Gannet writes, 'This year will mark the end of static pricing. The use of your tweets, credit score, and web history in e-commerce pricing is frightening—but ultimately unavoidable.'

Gannett describes the idea as a 'consumer's worst nightmare, a merchant's dream'. 

Chris Simpson, Chief Marketing Officer at price comparison website Kelkoo says, 'There are many pricing policies already used by retailers that most consumers are completely unaware of.'

Chris Simpson, Chief Marketing Officer at price comparison website Kelkoo says, 'There are many pricing policies already used by retailers that most consumers are completely unaware of.'

'These include things like regional pricing variations in the same stores across the country, not to mention retailers using different pricing structures for the same products in stores and online.'

Shops already harvest information from loyalty card programmes, and also use credit ratings to decide what rates some customers should pay for products such as loans. 

Gannett writes, 'Online marketers have dramatically increased the amount of behavioral data they have on consumers. It comes from a complex network of web histories, demographic records, loyalty programs, and increasingly, social media profiles. 

In the last few years, behavioral data has matured and gained widespread acceptance and usage in online advertising. Startups like Demdex  allow advertisers to access “databanks” of behavioral information on users, and target advertising to them.' 

Kelkoo's Simpson says that although the idea seems like a next step for businesses, it may be hard to work in the real world - particularly when web shoppers are fond of using apps and comparison sites to track down the best bargains.

Simpson says, 'Whilst behavioural pricing might seem like the next logical step, it is a hugely complex initiative for retailers to implement.'

'The danger of this pricing strategy is that if ‘social savvy’ shoppers became aware of it, it could lead to a social media boycott destroying a retailer’s reputation very quickly.'

The great thing about price comparison sites like Kelkoo is that we offer customers price transparency. In essence, customer data does not influence the prices that are displayed on our website.'

From The Mail Online

Thousands of drivers duped by fake car insurance

Up to 20,000 motorists could be driving uninsured after responding to cheap insurance offers from 'ghost brokers' which appear to undercut genuine insurance firms.

The multi-million pound scam is operated by fraudsters who target drivers who are economising and looking for cheaper motor insurancedeals. These motorists are likely to be vulnerable pensioners, young drivers struggling with soaring premiums and those living within communities where English is a second language.

Some of these drivers have purchased policies that are worthless, leaving them without cover and open to prosecution in the event of an accident

Ghost brokers commonly trade through websites, newsagents and outside supermarkets, often placing fliers under windscreen wipers of vehicles in car parks. Typically, the firms or individuals that advertise act as middlemen where they will contact real insurance providers on behalf of customers to arrange cover.

For instance, some ghost brokers issue completely fictitious policies while other illegal insurance advisers take a cash payment from the customer, but then use stolen credit card or direct debit details to pay the premium to an insurer.

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In other cases, the fraudsters apply to genuine insurance companies for cover on the customer's behalf, but alter personal details such as age and address which would otherwise push up the cost. This leaves the customer with an invalid policy and the potential for any claims to be declined.

The problem has become so prevalent that the City of London police have set up a fraud unit focusing on combating insurance fraud, recently estimated to be costing the UK £3 billion per year. The Insurance Fraud Enforcement Department (IFED) is funded by the insurance industry and run with operational independence by the City of London force.

Malcolm Tarling, a spokesman for the Association of British Insurers, said: "If you are approached by someone offering cheap insurance or you see an offer that seems too good to be true, then it probably is. If you are unsure if an insurance intermediary is legitimate then check with the Financial Services Authority that they are authorised and registered with the FSA."

Mr Tarling said drivers who were arranging motor insurance should expect to receive a certificate of motor insurance, a schedule of cover and the policy document or a web address where it can be viewed or printed.

from the telegraph

Buy-to-let investors set for another ‘bumper year’ as tenant demand continues to soar

Landlords and letting agents could be set for another bumper year, as historic low interest rates and gradual easing of lending restrictions continues to stimulate growth for buy-to-let properties.

According to tenant referencing specialists, Landlord Assist, many investors are returning to the buy-to-let marketplace to expand portfolios, as they capitalise on growing tenant demand and increasing availability of lending.

It also says that landlords are obtaining mortgages at a competitive rate and in most cases, buying at a significant discount to the 2007 peak.

Tenant demand: Rents are rising as more potential housebuyers get stuck on the rental ladder

As a result, landlords can now enjoy a positive income stream, potential capital growth and see inflation erode the value of their mortgage debt over a period of time.

Graham Kinnear, managing director at Landlord Assist, said: 'There are few tangible investments at present which can offer growth, income and a positive hedge against inflation quite like the buy-to-let market.

 

'Investors have taken advantage of weak prices and strong rental returns over the past year, and with the base rate unlikely to increase anytime soon, the good news for landlords is that they can enjoy the favourable conditions for some time yet.'

But Landlord Assist's positive outlook takes one crucial thing for granted - house prices rising or remaining steady. If substantial falls in property prices arrived instead, new buy-to-let landlords or those expanding their portfolios could see thousands wiped off their investment over the short term.

According to buy-to-let lender, Paragon Group, landlords are expecting tenant demand to increase further this year, with more than half (56 per cent) stating that they expect tenant demand to either grow or boom, compared to 45 per cent who were asked the same question at the end of 2010.

CAN YOU STILL GET INTO BUY-TO-LET?

Existing investors should now be benefiting from lower rates, many will have fallen on to their lender's standard variable rate and the slashing of base rate down to 0.5% has done them a favour.

This is especially true for many as a lot of buy-to-let deals do not have typical SVRs but a revert rate that tracks the bank rate.

However, new mortgage deals remain expensive in comparison to residential deals and industry experts acknowledge that now is a tough time for buy-to-let.

But with property prices having fallen to more affordable levels, those who stick to the tried and tested method of investing for rental returns rather than capital growth are tempted. You will need a big deposit though and should not expect instant riches.

What returns are landlords getting?

The average total annual return per property in December 2011 was 3.7 per cent, LSL Property Services added, compared to 2.7 per cent in November. In cash terms, this is an average of £6,107 – equivalent to £7,611 in rent with a capital loss of £1,504.

If property prices maintain the same trend as the last three months, an investor could expect to make a total annual return of 4.8 per cent over the next 12 months – equivalent to £7,841 per property. 

These returns are not much better than those possible from cash, with instant access savings offering around 3 per cent and five-year fixed rates offering near to five per cent, however, while it carries extra risk property does also offer the prospect of out performance.

Official figures from the Department for Communities and Local Government (DCLG) House Price Index, showed that property values fell annually by 0.3 per cent last year – so are fairly stable.

According to Nationwide and Halifax house price indexes, house values are still down drastically from pre-credit crisis levels. The average property price touched £200,000 in August 2007. 

However, in the last year, house prices have stabilised slightly, which has meant annual returns have been boosted.

FACT 

"At Heart Finance  we search the entire market in order to help you find the best deal you possibly can.

We are committed to offering our customers the highest possible 

standards of service

We recognise that both we and our customers have everything to gain if we look after your best interests and treat you fairly in all aspects of our dealings with you

Only recommend a mortgage or financial services product that we consider suitable for you and that you can afford – Our lenders charge the lowest fees of all - and always the most suitable from the available options " 

David Newnes, director of LSL Property Services, said: ‘Rental income has underpinned landlords’ returns in the last year, but the stabilisation of property prices in the past quarter has helped bolster annual returns. In the long-term, capital gains will contribute heavily to an investor’s profit.

‘However in the current market, as house prices face pressure from the wider economic environment it is annually increasing rents that are attracting investors – providing a hedge against inflation.

‘With house prices still well below their historic peak and historically low mortgage rates, there is a golden window of opportunity that many investors are beginning to exploit.’

From the Mail Online 

"I SPY WITH MY LITTLE EYE SOMETHING BEGINNING WITH" ?

Heart Finance has just launched a fun way to involve its fans and followers on Facebook.

The Promotion is Called "I SPY" which is referred to the game often played in families with young children, partly to assist in both observation and in alphabet familiarity.

It starts on Monday 16th January 2012, when Heart Finance will choose a word   (Heart, for example ) and then asks the question: " I spy with my little eye something beginning with ... (H)

The fans will guess any word beginning with "H " and answer by typing : I spy a "Hotel"..(No), "Hand"...(no), "Heat"..(no), Heart (Yes!). The first person who will guess the right word will
Win £50 Cash !!! Simple as !



To play, go on Heart Finance facebook page, and click on the "Questions" tab on the left, just below the profile picture,

How to Play I SPY on facebook 

locate the question: < I SPY>   and simply type your guessed word.


Each palyer can only guess once per word ... when the word is guessed and the winner will receive the £50, a new word will be selected randomly.

To make it easier and more motivating, Heart Finance have decided to give a small hint on the first 2 words : They are to be found within the website!  www.heartfinance.co.uk


Come and play, it only takes less than a minute
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For more info please email: info@heartfinance.co.uk

Britons take second jobs to heat homes

Fuel poverty has caused a 54pc rise in British workers taking second jobs.

People are looking for second jobs to help pay winter fuel bills Photo: ALAMY

British workers are being forced to take second jobs to tackle the rising cost of heating their homes this winter. PeoplePerHour.com, Europe’s biggest marketplace for online companies, has reported a 54pc rise in Britons joining its site to find extra work in the past month.

In the past six months, the website has seen an increase of 90pc in applications for second job roles, and over the past year applications have nearly tripled, rising by 177pc.

Applicants cited the rising cost of fuel as the reason for taking on extra work. Usman Bashir, from London, joined the website recently looking for a second job to help pay his fuel bills this winter.

“I already have a job but I need to earn extra money in order to pay for my utility bills," he said. "I am very worried about heating my home this winter. My last bill, which was for the summer, was £300. I shudder to think how high it will be this winter."

Xenios Thrasyvoulou, the founder of PeoplePerHour.com, said utility companies increasing their prices and profits had caused concern.

Fact 

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"The recent news of energy companies making excessive profits has made people anxious about how they will afford to heat their homes this winter. People remember how cold it was last winter and, combined with rises in the price of electricity and gas, are seriously concerned that they need more money to pay for their fuel bills.

"The British people are already making sacrifices in this age of austerity. Now they are having to undertake two jobs to afford what should be a basic human right – the right to warmth.

Beat these Christmas deadlines and have a happier New Year

Before your world descends into a mince-pie and mulled-wine haze, get these financial matters wrapped up.

Buying your new season ticket before January 2 means you will avoid next year's price rise 

Christmas is almost upon us, and that tends to drive out thoughts of all else. However, before your world descends into a mince-pie and mulled-wine haze, there are some deadlines and financial issues you should be mindful of. Get these sorted out now and you will save yourself a lot of trouble in the new year.

1. Check your energy deal

If you are on a cheap online deal or a fixed energy deal, the beginning of the year may hand you a nasty surprise. Some of these plans end at midnight on January 1 2012, and you will find yourself catapulted onto expensive standard rates.

If your tariff is coming to an end you should have received a letter or email, but if you have a niggling feeling at the back of your mind it is worth phoning your supplier to check.

We are entering the most expensive period for energy use, and so moving unexpectedly from a cheap to a more expensive tariff will have a disproportionate effect. Bear in mind that it can take four to six weeks to switch tariffs.

Websites such as Heart Finance will  help you to find the best deals.

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• Christmas fails to cheer consumers 
  21 Dec 2011

2. Apply for your tax details

The deadline for filing your online tax return is January 31, but do not assume you can leave it until then. Not only does the site struggle with extra traffic on deadline day, but you will not be able to get onto it until you have a login arranged.

This could take a week – or longer with heavy Christmas traffic. If you are not registered as a user of online government services, or you have lost your login details, then you need to sort this out now.

If you previously had a Unique Reference Number and can't find it, you will have to contact the Self Assessment Helpline on 0845 6055 999 and ask for it to be sent by post. If you have never had one you can register online via the HMRC website.

If you miss the tax deadline you will pick up a £100 fixed fine, while additional fees will be charged if you delay further. This is not one to put off.

3. Apply for a balance transfer card

If you are worried you have overspent this Christmas and know you will not be able to pay off your credit card bill, then don't wait until you receive it. Instead, apply now for a balance transfer card in preparation for putting the money on that, and thereby avoid racking up interest charges.

Most of these cards charge a percentage of the debt to transfer it, and then give you time to save up to pay it off.

If you just need a few months' breathing space, try something like the Virgin Money Credit card, which will give you 20 months' free of interest for balance transfers, and charges you 2.99 per cent of your balance or a minimum of £3 to transfer it.

Once you have applied you have 60 days to make the transfer.

4. Buy your season ticket

If you are planning to buy an annual rail card for the first time, make sure you don't get stung by the price rises. The average price of these will jump by 6 per cent on January 2, so it makes sense to get in early – although you cannot buy a ticket to start later in the year and still get it at the old price.

If you need to buy one soon, make sure it starts on January 1, not 2, in order to benefit from lower prices. Existing tickets can be renewed up to seven days in advance.

5. Buy Christmas travel tickets now

Driving home for Christmas? If not you need to hit the transport websites for advance fares. These tickets are nearly always the cheapest option, so log on and see what prices you could get now against those on the day. As an extra plus you should be able to reserve seats on specific services – useful for beating the Christmas crush.

by the Telegraph