Monday, December 08, 2014
Thursday, July 25, 2013
In the first quarter of 2013-14 (April to June) personal insolvencies were up 14.7 per cent and corporate insolvencies were up 28.7 per cent.
Bryan Jackson, business restructuring partner with BDO LLP, said the rise in payday and short-term lenders points to "serious financial problems among thousands of Scots".
Mr Jackson said: "Following recent falls, the increase in the number of personal insolvencies in the second quarter suggests that the pent-up indebtedness of many individuals has burst through.There is little doubt that many individuals have been living from month to month, or week to week, simply feeding the interest on their debts rather than reducing the debt itself. Until now, this has delayed some from falling into insolvency, but this quarter's figures suggest that their financial situation has deteriorated beyond the point where they could cope and this has resulted in their bankruptcy. Unfortunately, I would not be surprised to see continued increases in personal insolvencies in the months to come. The increase in the number of payday and short-term lenders is indicative of serious financial problems among thousands of Scots whose circumstances will only be exacerbated by such loans."
Thursday, June 27, 2013
Bank Deputy Governor Paul Tucker said: "If interest rates were to rise without an improvement in income, the debt servicing burden would increase."
Wednesday, January 30, 2013
One in six Scots households are raiding their savings to pay for day-to-day living expenses as they struggle to cope with higher utility, food and fuel bills in the face of another year of frozen wage packets. Almost half of people have admitted in a new poll to regularly delving into their savings last year, with one-third unable to put any money aside in 2012.
40% of private-sector workers were given a freeze in their 2012 pay settlements. 250,000 council workers are due to see their wages go up by just 1% in April, ending a two-year freeze.
Citizens Advice Scotland chief executive Margaret Lynch said: "This report shows the grim reality of what life is like for Scotland's families in today's economy...The economic equation is simple: basic living costs are going up all the time while household incomes are frozen, or falling. So people are struggling just to pay for the essentials in life – things like rent or mortgage, fuel and food."
Wednesday, January 02, 2013
Bryan Jackson, accountancy and business advisory firm PKF’s corporate recovery partner, said the economic slump meant the “very high” level of insolvencies was not expected to come down for some time. He said: “With no improvement in the economy, employment insecurity rife and rising living costs, there is little sign of this level of personal insolvency reducing over the next three to four years. This means that another 80,000 to 100,000 Scots will go bust in the next four to five years. Given that personal insolvencies are at the extreme end of financial distress, it should be noted that there will be hundreds of thousands of Scots simply treading water and meeting interest rate payments, but with little hope of repaying their debts in the near future.”
With an enormous dependence on the public sector for employment, it is unfortunate that Scotland looks likely to have a less-than-happy new year in 2013. He attributed this to the higher proportion of public-sector jobs being cut, wage freezes in the public sector and possibly an over-reliance on the housing “bubble” to fund lifestyles.
Consumer Credit Counselling Service, said about 150,000 Scottish households were spending more than half their income on repaying debts. A spokeswoman said: “There is still a lot of pain out there. People’s budgets are really bursting at the seams. They do not have the disposable income to repay their debts or the ability to manage them.”
Citizens Advice Scotland urged people not to take out high-interest “pay-day loans” to avoid insolvency. Concern has increased that such lenders are cashing in on Scotland’s debt problems, with the number of clients north of the Border having soared by nearly four-fold since 2009. Head of policy Susan McPhee said: “Every such case is a personal tragedy and a family whose finances have been wrecked – with all the stress and misery that comes with that...Some pay-day lenders have rates of over 4,000 per cent. That sort of rate can be devastating for those whose incomes are low or unstable. Our evidence suggests they are being used by more and more households, and can often turn a problem debt into a crisis one.”
Tuesday, January 24, 2012
The average amount owed by those wrapping up their working life is around £38,200, with mortgages and credit cards making up the bulk of the debt. The figure is £5000 higher than the year before. The study found half of those with debts still owed money on their home loan and more than half (51%) were struggling with their credit card bills.
Citizens Advice Scotland said older Scots were saddled with "staggering amounts of debt".
Its own research, published last year, found that the average unsecured debt, excluding mortgages, was £17,767. Susan McPhee of CAS said: "That's a staggering amount of debt to service, and still keep warm and put food on the table."
Wednesday, January 04, 2012
The number of people turning to the much-criticised operators, whose interest charges can quickly rack up to several hundred per cent, is approaching one million across the UK, while a further six million are using an overdraft, credit cards or other loans to keep a roof over their heads, according to housing campaigner Shelter.
Shelter Scotland spokesman Gordon MacRae said: "These findings are extremely worrying and show that millions of households are desperately struggling to keep their homes. Payday loans may seem like a quick fix to pay for housing costs but with interest rates of up to 4000% annually they are completely unsustainable and can quickly lead to snowballing debt, eviction, repossession and ultimately homelessness...Every two minutes someone in Britain faces the nightmare of losing their home. "
More than one in 10 people in the UK faces a constant struggle to pay their rent or mortgage, while 37% blame high housing costs as the cause of stress and depression in their families.
Monday, January 02, 2012
Bryan Jackson, PKF corporate recovery partner, said: "...the fluctuations in the economy, the difficulties in the eurozone, and the clear impact of public sector cuts is increasing the number of Scots facing financial difficulties." He added: "The dramatic rise in the number of more affluent Scots being made bankrupt is a further sign that the after-effects of the recession are spreading among all sectors of society, with the result that I believe all personal insolvencies will continue to rise and remain at high levels for several years to come."
Insolvency trade body R3 Scottish council member John Hall said : "Many Scots are in a situation where they simply cannot survive any longer. They are what we call 'zombie' debtors who can only pay the interest on their debts each month. Therefore any slight change in their circumstances means they are likely to be plunged into insolvency."
Thursday, July 21, 2011
Official figures from insolvency supervisors Accountant in Bankruptcy (AiB) showed 5,319 personal insolvencies in Scotland in the first quarter of the current tax year. It is the biggest increase since 2008.
Citizens Advice Scotland chief executive Lucy McTernan said many Scots struggling with heavy debts were choosing bankruptcy as the "lesser of two evils".
She said, "If you are struggling with debt which has become unmanageable, and you really can't see a way out of it, then bankruptcy can be your only realistic course of action."
Experts warned the increase is only the "start of a trend" in the months ahead as the full impact of spending cuts and a stagnant economy start to bite.
Bryan Jackson, corporate recovery partner with accountancy firm PKF, said: "This dramatic rise in the number of personal bankruptcies in Scotland is a sign that the impact of the recession is still being felt. This must be due to rising utility, food and fuel prices coupled with a freeze in pay which means that hard-pressed individuals are now succumbing to years of built-up indebtedness." He warned: "Given that we have yet to see the full implementation of public sector job cuts, these figures would tend to indicate the start of a trend rather than the end and I believe that the number of Scots being made bankrupt will increase for some time to come."
Iain Fraser, Scottish spokesman for insolvency professionals trade body R3, added; "It is highly likely that financial pressures will continue to produce high levels of personal insolvency among Scots for some considerable time."
Gordon MacRae, head of communications and policy at Shelter Scotland, said: "The increase in individual bankruptcies is worrying. As Scotland begins to feel the full impact of savage cuts to jobs and housing benefits, and as more people face even greater debt, the perfect storm is brewing for a rise in homelessness."
Cash-strapped consumers are increasingly turning to discount supermarkets to slash their spending on food, as soaring prices force them to change their shopping habits, according to a new report. The prolonged squeeze on their pockets is making millions of shoppers more savvy when they visit high street stores and is forcing them to change their habits at the tills. Essential foods such as bread, meat, milk, cheese and eggs increased markedly month on month, putting yet more pressure on already struggling households. 84 per cent of people across the UK are worried about the rising cost of food - with food prices continuing to climb. A third of those surveyed told Which? they had already reduced their spending on groceries this year. People have changed which foods they are buying to cope with higher food prices, switching to cheaper brands, bigger value packs and more supermarket own-brands. Shoppers are also putting less organic food in their baskets.
Tuesday, May 17, 2011
Bank of Scotland research found that soaring gas, electricity and main-tenance costs were the main causes of the rise. It showed that the average annual cost associated with owning and running a home rose by 1.4%, or £116, from £8525 in March 2010 to £8641 in March 2011. Utility costs were up by £102 on average and maintenance costs by £33.
Bank of Scotland housing economist Suren Thiru said: “Household finances remain under pressure with the significant drop in mortgage payments since 2008 mostly offset by increases in other household bills. Rising utility bills have been a clear driver behind this, along with increases in maintenance costs. The current strain on household finances is particularly concerning at a time when earnings growth remains weak.”
Another study revealed over-50s are suffering a drop in their quality of life as their incomes are squeezed by low interest rates and high inflation. Research by Saga found that around 56% of older people cite the rising cost of living as their biggest concern, more than double the 27% who are most worried about their health.
Thursday, January 06, 2011
Shelter estimated that 9% of people in Scotland have had to increase their work hours or take on a second job, compared with the British average of 7%.
Some 4% of respondents in Scotland said they had moved in with family or friends, double the 2% average across Britain.
The survey of 2,234 people across the UK also indicated that around two million people paid their rent or mortgage with credit cards over a year. The charity said the proportion was equivalent to about 5% on average in Scotland and across Britain.
Graeme Brown, director of Shelter Scotland, said:
"A reliance on high-interest options such as credit cards to pay rent or a mortgage is a highly dangerous route to go down and is known to contribute toward uncontrolled debt, repossession or eviction and, eventually, homelessness. It is also very worrying that thousands of people in Scotland are being forced to move in with family or friends and that many more are having to take on extra hours and or a second job just to make ends meet.As we brace ourselves for the full impact of savage cuts to jobs and housing benefits, we are very concerned that more people are going to face even greater debt and the threat of homelessness."
Tuesday, January 04, 2011
PKF predicts that final figures will show about 22,000 Scots were sequestrated (the Scottish term for bankruptcy) or took out a Protected Trust Deed (PTD) in 2010, or 425 a week, and that this year will see even higher levels of personal insolvency. Personal bankruptcy during 2011 will be impacted by the Comprehensive Spending Review (the full impact of the CSR is yet to be felt) , which is likely to result in higher levels of unemployment among public sector employees, and potentially by the effects on mortgage-payers of rising interest rates.
“Many people are only able to cling on to their homes as long as their mortgage payments are being kept at an historicallly low level due to the 0.5% base rate. Once interest rates start to rise, I believe we will begin to see a considerable growth in what might be termed the “middle class insolvent” Bryan Jackson, corporate recovery partner, explained. It was likely that interest rates would have to start rising this year, whereas the housing market was unlikely to start a recovery until 2012 at the earliest, which meant “there will not be the escape route of rising equity to reduce debts which has been used by thousands of individuals in the recent past”.
The VAT increase, coupled with rising utility costs, would pile further pressure on those who were staving off insolvency. There is already evidence of an increased take-up of payday loans and other products from high-interest lenders which only temporarily put off the inevitable.
Monday, December 13, 2010
In addition, NMG notes that 48pc of all households are on fixed-rate mortgages, "paying about £680 a month in comparison with about £530 a month for those on trackers or variable rates" for equivalent sized mortgages. Households with high loan-to-value (LTV) mortgages or renting are struggling the most, the survey says, with the proportion resorting to credit card debt rising: The fraction of high LTV mortgagors with unsecured debt had risen between the 2009 and 2010 surveys, from 68pc to 92pc.
Despite record low interest rates, half of respondents reported a fall in monthly disposable income after tax, mortgage, rent, bills and other loan payments. Nearly a third, 29pc, said their debt concerns had risen over the past two years, compared with just 12pc who are now less worried
UK consumer borrowings are around £1.45 trillion and have not begun to shrink. The Bank has already warned that more than one in two people with "unsecured" debts, such as credit cards or personal loans, are struggling to cope.
Friday, November 12, 2010
The charity found that more than one in three homeowners are worried about keeping up mortgage payments, and one in six are already struggling to find the money each month.
“We know from the cases we see every day that it only takes one problem, like a bout of illness, or redundancy, to tip people over the edge and into a spiral of mounting debt and arrears.” Shelter Scotland director Graeme Brown said
One in every six mortgage holders across the UK was actively struggling to pay a mortgage.
Thursday, June 10, 2010
It said the banks' poorest customers were subsidising the richest by paying a higher part of their income in fees. Despite talk about being more responsible, banks were still imposing heavy charges on vulnerable people.
Citizens Advice Scotland chief executive Susan McPhee said "...the people who are worst hit by these charges are those who can least afford to pay them.Indeed these charges mean that the poor are actually subsidising the rich, like a reverse Robin Hood effect."
One pensioner was charged £66 for going overdrawn by 60p.
Monday, April 26, 2010
For the Anderston area, nearly 20% of adults had debts in excess of £15,000. The Calton area was next, with 17.4% of adults carrying debts of more than £15,000. Dunfermline South and Greater Pollok both had 16.5% and Cumbernauld North had 16.4%.
Half a million Scots have debts of more than £15,000 – half of the average salary.
Another report describes how more than a fifth of Britons lie to their partners about the extent of their debts and almost a third keep other family members in the dark over the amount of money the owe.In Scotland, 27 per cent of debtors in Aberdeen keep their debts hidden from their partners, as do a fifth of Glaswegians and 13 per cent of those in Edinburgh.
Friday, March 27, 2009
Shelter chief executive Adam Sampson said "Tenants who have kept their side of the bargain by paying their rent are being thrown out on to the street because their landlords have defaulted on the mortgage."
Leslie Morphy, of Crisis, said "We risk forgetting that tenants of private landlords are extremely vulnerable to the recession,"
Friday, February 27, 2009
Saturday, December 06, 2008
The bank and its agents telephoned the couple 762 times over seven months in what they say is aggressive pursuit of the debt . Their daughter, Stefanie Moore, 29, received 60 to 100 phone calls and two text messages .
The couple feel dehumanised .
Yes that what capitalism does to people . Socialist Courier wonders if the banks now in debt , begging for government bail-outs will ever be treated in such a shameles and heartless manner to demand repayment
Saturday, November 15, 2008
"The energy companies are making the most money out of those on pre-payment meters and often those are the people on the very lowest incomes." said CF spokesperson
Energy awareness group National Energy Action said pre-payment metered customers paid on average £359 more a year than those with normal meters. This contrasts with the extra annual cost of between £85 and £100 to maintain the pre-payment boxes - a sum estimated by energy industry regulator Ofgem.
An NEA spokeswoman also added: "Once you are in debt you are effectively blocked from switching to cheaper deals."
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