Planet Funds

A year-long budget that includes all annual expenses might help Britons who resolved to gain control of their finances this year.

The Consumer Credit Counseling Service (CCCS) advises people to plan ahead to cover regular expenses throughout the year.

People who take the time to write down a budget for every month of the year will benefit, says Frances Walker, a spokesperson for the CCCS.  The exercise will let them identify ways to maximize the money at their disposal.

If people are using more than 20 percent of their annual income to make repayments on loans, they have borrowed too much, says Ms. Walker.  A debt consolidation loan with a single monthly payment may help remedy this situation.

Data collected by Credit Action indicates that debt in the UK amounts to £1,400 billion.

Many home buyers continue to move ahead with their plans, according to a recent study.

Data from a recent survey by Fool.co.uk reveals that 38 percent of those surveyed who said they would be buying a home soon expected to complete the transaction this year, and another 34 percent will do it in 2009.

Many people who have been planning to move into homeownership will be encouraged to go ahead by current changes in the market, says David Kuo, head of personal finance at Fool.co.uk.  Too many people ask the wrong question when beginning the process, however.  They should be asking themselves what they can afford to repay rather than how much they can borrow, says Mr. Kuo.

The report indicates that over the next five years, sellers will outnumber buyers at a ratio of about five sellers for every four buyers.

Fool.co.uk is an online financial community that helps rethink their relationship with money.

Some people may actually save money by taking a loan if the amount falls into a tier of favorable size, says independent product research firm Defaqto.

The lower tiers tend to carry the highest interest rates, so borrowers may actually be paying more when borrowing a smaller amount.  This is especially true when loan providers have two tiers for loans between £1,000 and £5,000.

David Black, Defaqto’s principal consultant on banking, cautions borrowers to do their research before deciding what sum they want to borrow.  He says it is possible to save quite a bit on interest charges with a bit of work.

A borrower can save as much as £1,000 by borrowing a larger sum and repaying it over a longer term.

A large tier rate may not indicate noncompetitive interest rates, so Mr. Black advises borrowers to pay attention when shopping for a lender.

Defaqto research further reveals that shopping for more favorable rates on credit card can also produce significant savings.  Consumers have little incentive to stay with a company that has high rates.

The Department of Work and Pensions (DWP) is urging people who spent more than they should have during the holiday season to plan more carefully for their financial futures.

People who fail to plan for large expenditures may find themselves short of funds and struggling to make repayments, according to DWP.

More than 50 percent of Britons spend too much during Christmas.  People in the north-east, north-west and Wales encounter the greatest financial problems as a result.

Many people find it difficult to pay their bills after Christmas, says Susan Clarke of Jobcentre Plus.  This can put them in a very nerve-racking predicament.

People might reduce the level of stress that goes along with overspending by getting control of their financial matters.  A debt consolidation loan might be of help.

The DWP announced formation of a new unit to work on issues of child poverty.  Over the past ten years, government measures have helped to raise 600,000 children out of poverty. 

Many families felt the pinch of tighter budgets last year and consequently did not pay all their bills, according to recent research.

The most frequently overlooked of all household bills was the council tax.  Research conducted on behalf of MoneyExpert.com by YouGov indicates that 2.3 million people paid late or did not pay at all.  Energy bills proved to be a problem for 1.3 million people.

As the price of gas and electricity climbs and credit becomes tighter, Britons may have an even more difficult time making their repayments.  The financial advice website warns that this can have serious consequences for consumers.

According to Sean Gardner, chief executive of MoneyExpert.com, it is not disastrous to pay one bill late.  However, regularly making late payments is a sign of trouble.

People who miss a payment may lose access to a service or even end up in court, warns Gardner.

Moneysupermarket.com reports that approximately three million people in the UK failed to make payments on time, resulting in an additional £35 million in late fees, according to data collected by YouGov.

The new Energy Performance Certificate (EPC) could make home buyers more aware of environmental issues when purchasing a home in the future, says the Home Builders Federation (HBF).

The new certificate will help buyers become more aware of the benefits of energy efficiency and good insulation, according to the homebuilders’ trade association.

The EPC will undoubtedly have an impact on the way buyers regard their purchase.  John Slaughter, director of external affairs for the HBF, believes that people will always take note of increases in the cost of energy.

In the long term, he believes the EPC will have a positive impact, leading to an increased awareness of the benefits of energy efficient homes with better insulation.  The advantages come not only from reduced costs but also from raising the comfort level of the home.

The Government’s “Building a Greener Future” program grants homeowners a stamp duty exemption for their carbon-neutral homes, encouraging them to be more aware of environmental concerns.

Housing prices in Northern Ireland grew tremendously last year, according to the Royal Institute of Chartered Surveyors, but they are beginning to slow.

Home sellers will need to be practical when pricing their homes this year, but RICS expects sales to continue.

The market has changed dramatically during 2007, according to Tom McClelland, housing spokesperson for RICS Northern Ireland.  Today, “agents have to work harder to achieve sales and sellers have to be more realistic about asking prices,” he says.

Changes in the market could ultimately work to the benefit of first-time home buyers, predicts McClelland, because fewer buyers are competing for homes in that price range.

By the end of last year, the housing price growth rate was 24.2 percent, making it the highest in the UK.

Homeowners may not see savings on their mortgage payments in spite of additional cuts in the base interest rate this year, says one expert.

According to David Kuo, head of personal finance for the Motley Fool, the Monetary Policy Committee’s decision to keep the base rate unchanged may or may not have an impact on mortgage rates. That relationship has not been firmly established.

Lenders have been encouraged to pass December’s rate cut on to borrowers by Chancellor Darling.   Mr. Kuo warns, however, that mortgage loan providers are not required to pass savings on to borrowers, and given the current economic climate, many may choose not to do so.

At the moment, many lenders are focusing on returning their business to better health.

While experts predict that the Bank of England may institute further cuts in answer to the current economic slowdown, homeowners will probably not feel any benefit from those cuts.

There is a strong possibility that personal insolvencies will increase this year, according to James Falla of Thomas Charles & Co.

Predictions that personal insolvencies could increase this year may be accurate, according to one industry expert.

The number of persons declaring themselves insolvent in 2008 is likely to rise, says James Falla, director of advice service Thomas Charles & Co., proving experts right.

Rising debt levels have gained wide attention recently.  Mr. Falla points to data collected by KPMG that suggests a 30 percent increase in the number of personal insolvencies this year.

Mr. Falla points out that personal insolvency may take one of three forms:  bankruptcy, individual voluntary arrangements (IVA), or informal debt management plans.

While it is possible to find statistics on bankruptcy and IVAs, data about informal debt management plans is not available.

Some people trying pay back loans may find an answer in debt consolidation loans, according to the price comparison firm uSwitch.

The current credit situation should not hamper individuals attempting to get a self-cert mortgage.

While borrowers are encountering tighter lending conditions in other money markets, Andy Pratt, spokesperson for Alexander Hall, reports little change in the self-cert market.

Nonconforming lenders in the subprime market have taken the brunt of the problems in the financial markets, according to Mr. Pratt.

The broker representative expects that borrowers with good credit will not experience problems in securing loans, as the high street banks are not seeing a negative impact.

Mr. Pratt says that borrowers who qualified for a self-cert loan in the past should not have any trouble now.

Data provided by the Economic and Social Research Council suggests that of the 29 million Britons working today, 13 percent are self-employed, making them qualified for a self-cert loan.