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British families, who are struggling to balance their credit commitments, have been advised to seek help through registered credit charities as a more practical alternative to debt consolidation loans.

According to the UK’s leading credit charity association (Abcul), credit charities and debt advice outlets are becoming an increasingly important refuge for consumers who are suffering from serious debt and are left feeling as though they have no where else to turn. The charities offer readily available, free and impartial advice to the indebted and are often the only ear that many Brits are willing to confide in, during their time of need.

As a means for the charities to reach a broader range of people who require financial assistance, the trade body is believed to be in talks with the Government and is supposedly pushing for a greater level of authority to be bestowed upon them.
 
One expert suggested that it was a perfectly reasonable and maybe even essential notion for credit unions and charities to be granted more power, especially if it enabled them to help more people. It is always better for consumers to be able to combat their debts through the adoption of new monetary management skills opposed to referring to their old loan and credit crutch.

Home repossession levels in the UK are expected to soar throughout 2008 according to a newly issued report.

A leading economic trends institution has suggested that “property claw back” levels are likely to peak at 25% above 2007’s threshold. Worryingly, this could mean that more than 30,000 homeowners within the UK will lose ownership of their home within the next 6 months, equating to an accumulative repossession increase of more than 3 times that recorded half a decade ago.

Not surprisingly the credit crunch sits neatly at the helm of the problem and is responsible for skewing many thousands of British homeowners levels of affordability. Consumers are effectively having their pockets attacked from all angles, whether it’s a rise in their home loan repayment rates or an increase in the cost of buying groceries or paying the utility bills, regardless as to which factor is specifically at play, one thing is for sure…times have become tough for the vast majority of us.

Commenting on the report, one analyst stated that in a time when homeowners are in doubt as to their ability to repay their home loans, as well as meeting the daily financial demands of living, repossession levels can only go one way.

Surprisingly large numbers of British parents are using loans provided by their adult children to meet their credit commitments and keep their heads above financial water.

According to a new report, more than ten billion pounds has gone back and forth between parents and their children over the last 6 years, with debt consolidation or debt repayment comprising of the most popular need for the borrowings.

However, what may come as less of a surprise is that the collective total of money lent by UK adults to their parents pales into insignificance when faired against the amount which is supplied by parents to their children, throughout the duration of their lifetimes.

Studies show that British parents will spend approximately £180,000 to raise each of their children up until the age of 21. This figure encompasses the amount needed to keep a child fed, clothed and with a roof over their head as well as providing occasional treats, it does not however, include any contributions towards home loan deposits, cars or holidays (which are also becoming very common).

One expert commented that although parents do not expect handouts from their children, when times become desperate, they are often the first port of call (providing that they can afford to help). It is also very rare for children to reject a financial request from their parents for the simple reason that most people will feel as if it is the least that they can do.

The decision to reduce the base rate of interest to its current level of 5% was not one that was reached as unanimously as have resulted from previous MPC meetings.

Information drawn from a summary of Aprils gathering of economic heads has revealed that 60% of the voting committee urged that a reduction of 0.25 percent was adequate, whereas the remaining 30% were pushing for no movement whatsoever with an additional 10% voting on a 0.50 percent reduction.

According to impartial experts, the vote, which represents a massive indifference of opinion between committee members, may further support the theory that our countries economy is in serious doubt. On one hand, the base rate has to be reduced in order to control the home loan repayment burden, which is weighted upon the shoulders of millions of British homeowners, whereas on the other hand, a reduction in national interest will force up inflation, meaning that the daily cost of living will also increase.

The situation is further hindered through the current performance of UK’s housing market with economists predicting sizeable reductions in the value of British housing stock over the coming years. This, as you’d expect is causing further worry for homeowners and the nation in general, as the threat of negative equity becomes less of a buzz phrase and more of a reality.

UK loan and mortgage borrowers are advised to never falsify or exaggerate their financial positioning, when approaching a monetary provider.

According to one expert, bending the truth with regards to the state of personal financial health will in no way benefit any borrower in the long term. It is thought that some 15% of unsecured loan applicants will attempt to “talk up” their net disposable income, as a means to increase their chances of acceptance.

What happens, as you’d expect, is that borrowers who do manage to secure credit on the grounds that their levels of affordability are slightly more positive than the reality of their situation would dictate, is that they run an extremely high risk of amassing debts which they have limited to no hope of servicing.

In addition, the vast majority of individuals who choose to follow this path are identified as already struggling with the management of their repayments on other credit agreements, and are seeking additional credit to either count towards their repayments or consolidate the entirety of their debts. The former scenario is an extremely risky and often futile exercise in financial management.

Essentially, borrowers should always come clean to both their lender and more importantly themselves when applying for any kind of credit, as it will help to avoid further heartache and distress at a later date.