Credit Action News Round-up (4 November 2011)

UK’s younger generation face “bleak future” of higher debts and fewer assets, according to CCCS: New research commissioned by national debt charity Consumer Credit Counselling Service (CCCS), shows that Britons are building up large levels of debt earlier in life, and will be less able to acquire assets in the way the older generations could.  The Debt and the Generations report showed that almost three-quarters of 18-39 year olds now have unsecured debts, compared to around 60% of people aged 40-54. Whilst debt levels currently peak around the age of 40, this situation is now changing, according to the debt charity. The report showed that younger households are more likely to use credit to make ends meet, to be in arrears and to have fewer assets due to rising house prices and student loan repayments.

Commenting on the report, CCCS Chairman Lord Stevenson said: "The younger generations are facing a worrying future... It is essential they are protected from the aggressive practices of commercial debt management companies who will only add to their debt burden.  Making sure that consumers know they can turn to debt charities such as CCCS for free advice and support must be a key part of our strategy in dealing with this problem."

Almost nine in ten households will ration energy use this winter to save on bills: According to new research from uSwitch, almost nine in ten UK households (89%) will be switching off or turning down their energy use this winter in order to save on the cost of bills. This is the equivalent of 23 million households, and is an increase of 4 million (16%) on last year. According to uSwitch, the 21% rise in energy prices within the last year has meant that energy bills are now the biggest worry for consumers (90% of consumers say they are concerned about them), ahead of food bills (70%), petrol costs (74%), council tax (59%) and mortgage or rent (42%). Furthermore, over one in three households (37%) are struggling to make their essential bill payments, and have been forced into debt as a result.

Ann Robinson, Director of Consumer Policy at uSwitch said: “As the cost of our energy bills escalates people are being forced into making potentially dangerous choices. Whether they sacrifice something else to keep the heating on or turn the heating off to pay for something else, there is a modern-day Russian roulette going on in homes up and down the country.”

Nearly half of women aged over 40 have no pension of their own: According to new research by Prudential into couples’ attitudes to retirement, 46% of women over 40 who live with a partner have no pension of their own. The report also revealed that more than half (56%) of couples aged over 40 do not know the amount of money they will need to live on in retirement, with 40% admitting they have no financial plans in place for a retirement income. Vince Smith-Hughes, Head of Business Development at Prudential, said: "People may feel they can't afford to significantly boost their retirement savings in the current financial climate, but taking even the smallest of steps can have a positive impact. Joining a workplace pension scheme, considering a joint life annuity, so the income will continue after one partner dies, and topping up National Insurance contributions, are all options which can increase income in retirement.”

NS&I accounts to stop operating via the Post Office: National Savings and Investments (NS&I) is to stop operating its accounts via the Post Office from 28 November. The changes form part of NS&I’s five-year-plan to simplify and modernise its savings products. By the plan’s completion in 2013 NS&I products will only be available direct from NS&I themselves, either via post, telephone or online. The move will affect almost 2.3million people with Investment Accounts and 260,000 with Easy Access Accounts.

From 28 November to next May, Investment Accounts will go through a transitional period during which no accounts can be opened. Those with existing Investment accounts will still be able to operate them at Post Office branches and by post over this period. From May 2012, all accounts will become postal only, for both those with existing accounts and those wanting to open new accounts. A higher rate of interest will also be introduced. However, the Easy Access Savings Account will be closed completely in July 2012. Customers will be able to operate their accounts at a Post Office or by phone up until that time, at which point they will be offered the choice of moving their money to the new postal Investment Account, the Directs Saver Account, or alternatively elsewhere. 

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