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A UK based consumer interest group specialising in the financial services sector, is said to be pleased at a recent Government announcement relating to the eventual eradication of loan sharking.

Loan sharking is a major problem in the UK and due to our nations mounting consumer debt situation, it is also one of the only ways in which certain borrowers can attain credit.

Loan sharks do not conform to any type of Government rule or regulation, and purveyors of such practices will typically use fear and violence as standard, in the day-to-day running of their operations. It is for this reason that the act of loan sharking is outlawed in England, Scotland, Wales and Ireland.

However, as mentioned previously, a large percentage of would be borrowers fall outside the preferred remit of mainstream lenders (usually due to a tainted credit past) and as such, are left with little other alternative, than to seek the assistance of these black market lenders.

In 99% of cases, borrowers who have chosen to use the services of a loan shark are left in a far worse financial situation than when they started, and it is believed that countless lives are destroyed as a result.

The Government recognises that current economic conditions, coupled with sheer desperation have created a would-be playground for the loan shark industry. A spokesperson for the Government stated that new plans to abolish loan sharking would soon come into effect, and if caught, purveyors of such practices would be severely dealt with and prosecuted to the full extent of the law.

According to an independent study by one of the countries leading price comparison sites, the UK’s debt stricken younger generations rely heavily on the bank of mum and dad for financial support.

Unsurprisingly, almost half of all parents have provided some kind of financial relief to their offspring at some point in their lives. The study found that the most common financial burdens include personal loans, rent commitments and mobile phone bills.

In addition, almost 20% of parents admit to regularly helping their children to pay home-related bills, and astoundingly, almost 10% of parents frequently help their children to pay their home loan commitments.

One expert commented that increasingly hostile economic conditions are undeniably one of the primary reasons for increased financial intervention from parents. Separately, changes in attitude with regards to the way in which we absorb personal credit, are also having a major impact on consumer debt levels, which in turn is causing more senior members of the family unit to step in and rectify the situation.

The general consensus seems to suggest that the average 19 – 29 year old will request almost £3000 from their parents every 4 years, as an aid to their negative financial situation. 

In related news, a separate study has revealed that the actual act of financial intervention by parents may have extremely damning effects on the child, later on in life. One of the UK’s leading personal investment firms suggests that younger generations will be less inclined to budget their money and invest into their futures, if they are constantly bailed out of trouble by their parents.

According to a reputable British investment firm, UK consumers are believed to have saved almost £40 million during the second half of 2007.

However, what on the surface can be viewed as a huge plus for the UK economy, it is also noted that consumer debt is still at record levels. It is thought that although a large percentage of consumers are actively investing any spare funds into ISA’s and Bonds, there are still huge numbers of people who either refuse to save or are making extremely poor decisions, with regards to sourcing personal credit.

An industry analyst speculated that many Brits appear to be confused when it comes to managing their personal finances. On one hand, we can clearly see that the importance of saving has been firmly instilled into the conscience of many people, however, it would also appear that the same people are over committing on personal loans, credit cards and store credit. As a result, all of their sensible financial decisions are effectively cancelled out by acts of over indulgence, with regards to credit acquisition.

In related news, the Government has recently announced that it intends to allocate additional funds to the school curriculum, in order to provide students with comprehensive credit management skills. Consumer groups have expressed their delight at the news.

According to new research, British consumers could stand to save around 1/5 of a billion pounds each year, if they spent a little more time researching their chosen form of personal credit.

The study revealed that around 1 in every 2.3 borrowers will instinctively choose a credit card, when applying for credit. However, very few consumers realise that credit cards can often be the more expensive way to borrow.

Surprisingly, around 62% of credit card borrowers are unaware of their cards exact annual percentage rate, with an additional 31% flabbergasted to learn that the average card carries an APR of around 19% (theirs included).

Card users are also becoming victim to excessive interest charges, due to haphazard spending such as using their card to make small purchases, when cash would have been just as accessible.

Money management experts have suggested that borrowers should always consider all their options before taking the plunge. In the majority of circumstances loans, and in particular secured loans, can present a far cheaper borrowing alternative for consumers.

In addition, the credit market has become extremely competitive of late and as a result, lenders are offering some fantastic deals. It is wise for borrowers to always shop around before they even consider a form of personal credit, and if possible, seek professional, impartial advice before they commit.

Recently released statistics from one of the UK’s leading consumer trends institutes reveals that home loan repayments have increased by almost 100% in the last decade, for borrowers who fall into the 21 – 34 year old demographic.

Accordingly, in 1997, the average home loan commitment for consumers within this specific demographic stood at around £60,000. However, industry data suggests that this figure has skyrocketed in the last 10 years, and the average borrower can now expect to juggle a mortgage commitment of around £115,000.

In addition to these gargantuan mortgage related debts, today’s younger generations have also become extremely credit hungry. It has been discovered that the average 25 – 35 year old can also expect to balance credit card, overdraft and personal loan commitments worth around £7,000. Again, this figure has also more than doubled in the last decade.

On the results, one expert commented that changing economic conditions coupled with an increased propensity by consumers to acquire credit (especially those in the younger demographics) have caused national debt levels to increase at a spectacular rate.

Unfortunately, however, high-end debt is almost inevitable for first time buyers, which is perhaps one of the reasons why the rental market has also experienced strong growth over the last year.