An increasing number of Britons are hiding the true extent of their debt problems from their partners through embarrassment, it has been revealed.
Research by Sainsbury's Finance showed that almost a fifth of consumers who are in a relationship and in debt have failed to divulge the full financial picture to their spouses.
Such findings mean that some 1.75 million people are hiding their debt from their other halves, while 1.92 million secret shoppers admit they conceal big purchases from their partner.
However, Chris Radford, chief executive officer (CEO) of aap - the UK's biggest buyer of endowment policies - said some of its customers had sold their unwanted endowments in order to meet their debt management needs.
Many Britons are currently choosing a different path. The poll discovered that eight per cent of adults frequently miss deadlines for bills, while seven per cent delay opening or ignore post that looks like demands for payment.
Furthermore, seven per cent of people admit they ignore or delay opening bank statements.
"The current economic climate is only exacerbating many people's personal financial concerns and our research highlights that there is a huge temptation to stick your head in the sand and hope it all goes away," stated Karen Horsburgh, head of Sainsbury's Money Matters.
"However, if you have money worries the best course of action is to tackle any financial concerns head on and seek advice on how to start rectifying the situation," she advised.
Indeed, 3.88 million individuals describe their own financial situation as "awful" or "pretty bad". Recent figures from the Insolvency Service showed that insolvencies rose by 27.4 per cent in the second quarter of 2009, compared to last year.
Rather than taking out personal loans and credit cards to pay off debt and hiding the true extent of their financial difficulties, some Britons may want to ensure the route they take does not push them further into the red.
After speaking to their partners about their monetary worries, homeowners may decide that clearing debt with a sum of cash is a better option than using credit as a crutch.
Chris Radford, CEO of aap said if the firm decides to make an offer to buy an underperforming endowment policy, it will always pay more than the surrender value offered by the insurance company.
Such a sum of cash could be put towards clearing debt, rather than using loans and credit cards to meet outstanding balances.
Source
Wednesday, October 28, 2009
Thursday, October 15, 2009
Could selling endowment policies help the middle classes?
The average debt of people seeking financial advice from the Citizens Advice Bureau (CAB) has significantly increased over the past 25 years, it has been revealed.
While in 1984, debts of over £3,000 were rare, the average debt of individuals who seek CAB guidance currently stands at £20,000, Joe Michna, the manager of Hartlepool CAB, told Gazette Live.
The average debt in 1984 was less than £1,000 and few people had credit cards, something which could exacerbate the monetary difficulties of households even more.
Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment polices - said some of its customers had chosen to sell their unwanted endowment policies, rather than surrender them, to shore up their financial standing.
For some CAB employees, 45 per cent of enquiries are about debt. While 25 years ago Britons came for help about debts worth hundreds of pounds, Mr Michna told the newspaper that it is not unusual for individuals to now seek help to clear £50,000 or more.
"I would not have easily foreseen how the availability of credit would increase and the number of options that some people would have including arranging loans over the telephone and on the internet," he stated.
"Nor would I have imagined for a moment that some people would have up to 15 or even 20 pieces of plastic in their wallets which they could use for obtaining credit."
However, middle-class debt is now a serious problem in the UK. Chief executive of Community Money Advice Heather Keates previously revealed that bankers, police officers and teachers are increasingly seeking monetary advice because the recession has pushed their finances "over the edge".
Many middle-class households with high incomes could find themselves struggling with money, especially to stay on top of costs such as paying private school fees and keeping up the running and maintenance of a second or holiday home.
The temptation could be there to use quick personal loans or credit cards to clear previous balances. However, homeowners who have already considered disposing of an unwanted endowment policy for debt management needs may not realise that selling is an option.
Mr Radford from aap said rather than surrendering endowments back to the insurance company, individuals also have an option of selling.
He added that when people sold their underperforming endowments to aap, it always paid them more than the surrender value offered by the insurance firm.
Source
While in 1984, debts of over £3,000 were rare, the average debt of individuals who seek CAB guidance currently stands at £20,000, Joe Michna, the manager of Hartlepool CAB, told Gazette Live.
The average debt in 1984 was less than £1,000 and few people had credit cards, something which could exacerbate the monetary difficulties of households even more.
Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment polices - said some of its customers had chosen to sell their unwanted endowment policies, rather than surrender them, to shore up their financial standing.
For some CAB employees, 45 per cent of enquiries are about debt. While 25 years ago Britons came for help about debts worth hundreds of pounds, Mr Michna told the newspaper that it is not unusual for individuals to now seek help to clear £50,000 or more.
"I would not have easily foreseen how the availability of credit would increase and the number of options that some people would have including arranging loans over the telephone and on the internet," he stated.
"Nor would I have imagined for a moment that some people would have up to 15 or even 20 pieces of plastic in their wallets which they could use for obtaining credit."
However, middle-class debt is now a serious problem in the UK. Chief executive of Community Money Advice Heather Keates previously revealed that bankers, police officers and teachers are increasingly seeking monetary advice because the recession has pushed their finances "over the edge".
Many middle-class households with high incomes could find themselves struggling with money, especially to stay on top of costs such as paying private school fees and keeping up the running and maintenance of a second or holiday home.
The temptation could be there to use quick personal loans or credit cards to clear previous balances. However, homeowners who have already considered disposing of an unwanted endowment policy for debt management needs may not realise that selling is an option.
Mr Radford from aap said rather than surrendering endowments back to the insurance company, individuals also have an option of selling.
He added that when people sold their underperforming endowments to aap, it always paid them more than the surrender value offered by the insurance firm.
Source
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