It has been claimed that some consumers could end up paying thousands of pounds more than they need to for their tax as a result of errors that have been made with their tax code. The errors that have been made with the 2010/2011 tax codes could mean that some taxpayers end up paying way over the odds when it comes to their tax bill, and many may fail to realise that they are paying more than they have to, as they will not be aware that their tax code is incorrect.

Industry experts have stated that measures that have been put into place to try and streamline the tax system have actually resulted in many people being hit with incorrect tax codes, and this has resulted in people having to pay way more than they are due to in the form of income tax. This comes after HM Revenue and Customs conducted an overhaul of its systems last year.

However, despite the fact that the purpose of the system overhaul carried out by HM Revenue and Customs, which was designed to improve the system, the measure appears to have simply made things more difficult by issuing people with the wrong tax codes, resulting in many people not getting the tax free allowance that they should be entitled to.

A spokesperson for the Institute of Chartered Accountants stated that there was clearly outdated information on the files of HMRC and this was affecting the tax codes that people were being issued with. She added that ‘if you put garbage in then you get garbage out’ casting further doubt on the abilities of the tax system in the UK.

The people that are thought to be most at risk are those that that have changed their details or changed their jobs in the past twelve months. Some people are said to have been sent tax codes for jobs that they left several years earlier, showing how flawed the whole system is. Consumers are being warned to look out for letters on the tax code that include BR or Do, as these are said to indicate that there is no tax free allowance attached to the income.

It has been revealed that the personal debt mountain in the UK has now reached £1.46 trillion, and following a very turbulent couple of years in terms of finances many households are now struggling to cope with the debt that they have found themselves in. Many have had to turn to professional agencies and charities for help and advice, but according to a recent report these charities and agencies are now also struggling to cope with the demand for debt advice and assistance.

Figures show that in the space of one year there has been an increase of 30 percent in the number of people that are looking for help and advice from debt professional, with the need to help being fuelled by the recession, which has left many people on a lower income and struggling to keep on top of repayment. The credit drought has also played its part, leaving many unable to get finance such as Consolidation loans to try and reduce their monthly outgoings.

According to reports some consumers are having to wait six weeks or more to get the advice that they need, and there are even some that are being turned away for advice and assistance. This is because some debt advice agencies are having to turn consumers down when they come looking for advice simply because their waiting lists are now so long. In the meantime industry experts have warned that over the course of this year around 150,000 people could become insolvent, reflecting an increase of 15 percent compared to last year.

One industry official said that whilst job losses had played their part in the crisis this was not necessarily the main reason for many people struggling to repay their debts. Often consumers were struggling because they had lost bonuses or overtime that they had come to rely on, and this had impacted heavily on their ability to make repayments on their debts.

The lack of funding for advice agencies means that there is a shortage of counsellors to offer assistance to cash strapped consumers. However, the government pledged to invest £143 million into providing additional debt advice between 2004 and 2011 so that free face to face advice can be made available for struggling consumers.

The Bank of England has announced today that the base interest rate is to be kept on hold for the eleventh month in a row. The announcement was made following today’s Monetary Policy Committee meeting, and many economists and industry officials were not surprised to learn that the base interest rate was being kept at its record low of 0.5 percent, where it has been since March of last year.

The decision to keep the base rate on hold comes just a week or so after official figures revealed that the UK had finally managed to pull itself out of recession, albeit by the skin of its teeth with growth of just 0.1 percent recorded in the final quarter of last year. Many officials believe that it will be later this year when the Bank of England starts to increase the base interest rate again, and some have predicted that it could be towards the middle of next year.

One of the reasons why many analysts believe that the base rate will remain at its lowest level in over three hundred years for some time to come is because of the low level of growth seen in the economy in the final quarter of last year. Industry experts have said that this has resulted in the UK only just making it out of recession, and there are fears that the slightest reversal could result in the UK becoming the victim of a double dip recession.

In addition to announcing that the base rate was to remain on hold the Bank of England has also announced that it will not be extending the quantitative easing programme. The £200 billion that was put aside for the programme has now been spent, and there are no plans to extend this any further for the foreseeable future. However, the governor of the Bank of England, Mervyn King, has said that the situation will be carefully monitored, and there was scope for further cash injections into the economy at some point in the future should the need arise.

The governor also spoke about the rate of inflation, and said that it was likely that inflation would rise above 3 percent for a while, which is significantly higher than the government’s 2 percent target. However, he added that in the medium term it should return to target.

Over the past twelve months there have been a number of reports that have highlighted how the level of demand for consumer credit has been falling, with the credit crisis and the recession putting consumers on red alert when it came to borrowing money and getting into debt. However, it seems that this trend has now reversed, and the demand for credit seems to be growing.

December saw an increase in consumer borrowing, much of which was the result of increased credit card borrowing according to figures from the Bank of England. Over the course of the month the level of consumer borrowing increased by £52 million, with many people borrowing on their credit cards over the month of December in the run up to Christmas.

The figures for December showed that the amount borrowed on credit cards, loans, and overdrafts came in at more than the amount that had been repaid on consumer debt for the first time since June of last year. For the five months leading up to December the amount being repaid on consumer debt had been outweighing the amount that was being borrowed by consumers, but the Bank of England figures showed that this trend was reversed in December.

Credit card borrowing was found to be the main driver behind the increase in consumer borrowing for the month of December, with the amount being borrowed on credit cards for the month increasing by £195 million. Loan and overdraft borrowing for the month remained subdued, however, with repayments on this type of borrowing continuing to outstrip borrowing.

It is thought that much of the increase in credit card spending may have been down to the impending increase in VAT rates, which were due to increase at the start of January. In addition to this the festive season would have contributed to the increase in credit card spending, with many people using their plastic to make their purchases for Christmas and the New Year. One economist said that the factors that contributed to the increase in consumer spending meant that there could be a relapse for this month.

A recent report has predicted that house price growth in the UK will gain momentum over the next few years, and property prices could increase by 20 percent by 2013. The prediction was made by the Centre for Economics and Business Research, which has revised previous forecasts that it made as a result of an increase in mortgage availability and an improvement in mortgage lending levels.

Officials from the CEBR have predicted that over the course of this year property prices will increase by around 6 percent, and by the end of 2013 they may have leapt by 20 percent. The report did acknowledge that in 2011 property price increases could be curbed as a result of cut in public sector spending and rising unemployment, but also claimed that in the following years property prices would be driven up as a result of a shortage of homes.

Within three years the CEBR expects the average house price to increase from £167,000 to around £210,000. Just over one month ago the group predicted that over the course of this year property prices could increase by between 2 and 4 percent, but given the increase in mortgage approvals and availability this has now been upwardly revised to 6 percent for the year.

One of the official that was involved in the report said that many industry officials had already been surprised by the fact that property prices had already increased by around 10 percent since they reached their lows. However, he added that it was easy to see why property prices had suddenly increased in this way given the shortage of new properties on the market, the increase in the level of mortgage lending, the record low interest rates that had been seen over the past ten months, and the slower than expected increase in unemployment.

He went on to state that it would be these factors that that would continue to push up property prices over the course of this year, although the price increases are expected to be more modest than they have been over the past six months. In its report the CEBR also predicted that the base interest rate would remain at its all time low level of just 0.5 percent until around the middle of 2011.

Officials from Her Majesty’s Revenue and Customs have issued a warning for consumers who may have received an email claiming that they are due a tax refund. The scam has been identified previously, but with this being the time of year when tax refunds have been submitted online there are fears that a rising number of people could fall for the scam, resulting in them being defrauded of money.

The phishing scam has seen fraudsters emailing tens of thousands of people informing them that they are entitled to a refund on their tax. The email asks the consumers to complete an online form including their bank or credit card details. With many consumers having only recently submitted their online tax returns many may believe that the revenue service has calculated that they are indeed entitled to a refund, but this is not the case and the emails are simply part of a huge scam designed to gain access to consumers’ bank and credit card accounts.

Not only do those that fall victim to the scam find their bank accounts and credit card accounts being cleared but in some cases they could also find their details have been sold on to third parties, putting them at further risk of fraud and identity theft. HMRC has confirmed that it never contacts consumers by email with regards to tax refunds, and would only do this by post. Therefore anyone that received one of these phishing emails is advised not to respond to it.

HMRC has also stated that those that do receive these emails should forward them on to HMRC for investigation rather than deleting them. Officials have said that they should also be mindful that no official contact regarding tax refunds would be made by telephone or via an outside agency either, so caution should always be exercised when there is any contact regarding a refund other than an official HMRC letter by post.

There is concern that the number of emails that are being sent could see an upsurge following the 31st January online tax return submission deadline, as this is when many people will be waiting for news about genuine tax refunds.

A report from the AA has claimed that the cost of car insurance is on the rise as a result of the compensation culture that has become so rife in the UK. Officials from the AA said that this compensation culture was at least partly responsible for the increases in car insurance premiums that have been seen over the past year.

The motoring group said that as a result of the many advertisements that were now being aired by law firms encouraging consumers to make claims for personal injuries such claims were becoming ‘increasingly embedded in British culture’. Over recent years these advertisements have been regularly aired on television and radio resulting in a surge of claims being made by consumers for personal injuries.

Figures from the AA have shown that last year the average cost of comprehensive car insurance increased by 18.7 percent to over £1000. This was the largest increase seen since records began back in 1994. In the last three months of 2009 comprehensive car insurance costs surged by 7.2 percent according to the AA’s British Insurance Premium Index.

The price increases have affected even the cheapest premiums, which showed an increase of around 11.3 percent taking the cost to £613. The final quarter of last year also saw the average cost of third party, fire, and theft insurance cover increase, with premiums rising by 8.9 percent to just over £1250. Even with the cheapest premiums there had been an increase of 13.9 percent, taking the cost to £788.

The AA said that the premium increases had come at a time when insurance firms were struggling financially as a result of having to pay out on the rising number of personal injury claims that were flooding in. The group said that as a result of the law firms’ advertisements consumers were claiming for even minor injuries that they would probably not have bothered with in the past. The AA also said that that this was something that was becoming increasingly embedded in our culture, and was feeding back to insurance premiums.

With the government’s temporary VAT cut having come to an end at the start of this year many consumers were expecting the price of goods such as food and petrol to increase slightly. The level of VAT was cut by 2.5 percent last year taking it from 17.5 percent to 15 percent. This move was aimed at helping the economy to get back on its feet and easing the financial strain that consumers and businesses were feeling through the recession.

The VAT level has now been increased back up to 17.5 percent, and prices of goods and services have increased accordingly. According to reports many supermarkets had made promises of huge January price cuts to help shoppers in terms of affordability, but the price of both food and petrol is said to have soared leaving consumers facing spiralling costs that will continue to impact on their finances.

Some have suggested that the increase in VAT has given supermarkets and other retailers the opportunity to increase prices by a significant level with the prices in some cases having increased by far more than the 2.5 percent by which VAT has increased. The Daily Mail Cost of Living Index showed that the cost of food essentials has soared compared to last January and the price of unleaded petrol is now almost 30 percent higher than it was this time last year.

There are concerns that supermarkets may have given up on cost cutting despite promises of bargain deals that would be available in January. An experiment was carried out where a basket of thirty seven essential supermarket items was put together and the price compared to the cost of the same items a year ago. This showed that there had been an increase of 7.5 percent compared to last year, which equates to nearly £400 a year extra for the average family spending £100 a week on shopping.

The price increases on food and petrol are causing particular concern because there is still evidence that workers in the private sector will face further pay freezes and pay cuts over the course of this year, which will have an even greater impact on affordability for consumers.

Official figures that were released on Tuesday have shown that the UK has finally exited recession, following in the footsteps of other major economies. Whilst the news will be welcomed by the nation officials have warned that growth was minimal and this means that the good news could quickly come to an end.

The data showed that the economy had indeed grown over the last quarter of 2009. However, the growth in the economy was much weaker than had been expected, with a paltry growth level of just 0.1 percent. Prior to this the economy had been in negative growth for six consecutive quarters, making the longest and deepest recession seen since records began.

There had been expectations that the UK would exit recession in the third quarter of last year, but shock figures that were released late last year revealed that in fact the UK was lagging behind other major economies and had remained in recession at that time. These latest figures, which have finally confirmed Britain’s emergence from the recession, were released by the Office for National Statistics.

A number of signs of economic recovery have been seen over recent months, from falling unemployment levels to increased property sales levels and better than expected profits for High Street retailers over the festive season. Whilst the recovery was slow the UK has at last joined other major economies including Japan, the United States, France, and Germany in escaping the grip of the recession.

However, some officials are now warning people to err on the side of caution, stating that the minimal growth level that has finally dragged the nation out of recession could be too insignificant to result in sustainability, and this could result in a double dip recession where the economy is plunged back into recession after just about managing to claw itself out.

One economist said that Britain had just about crossed the line in coming out of recession, adding that the growth figures had been well below the expectations of analysts. Another economist added that growth and GDP figures were a blow for anyone that had hoped that the UK would be able to completely free itself from the grip of this latest recession.

It was recently announced by the banking industry that there were plans to abolish the use of cheques, and the industry was hoping to phase out cheque use by around 2018. However, this revelation caused a lot of controversy, with many groups and consumers stating that they could be left high and dry without any cheque facilities.

The banks tried to alleviate the upset that was caused by the announcement of phasing out cheques by stating that they would ensure that there was a suitable alternative in place for use by those that had become accustomed to using cheques or needed to use cheques to make payments. However, no details of what that alternative might be were given by the banking industry.

It has now been reported that the Treasury has decided to step in and intervene with the process following the outcry. Ministers have said that they do not want the banking industry to reach any decision with regards to the abolition of cheque usage until the banks have found an effective alternative for consumers and businesses to use.

The announcement was made by the banking industry in December of last year, and immediately sparked concerns amongst many people. Many were concerned that particular groups of people may be affected far more than others, such as older people that had become used to using cheques over the decades and those that did not have credit or debit card access.

The Treasury has now demanded that the banks do not stop the use of cheques until a firm and effective alternative has been found, and the banking industry has agreed to this. The banks are set to consult on a regular basis with the Treasury’s Financial Inclusion Taskforce with regards to the issue.

A Treasury spokesperson stated that ministers were aware of the popularity of cheques with many people and they were concerned that the sudden abolition of cheques could adversely affect those that relied on them to make payments. The UK Payments Council has said that it will ensure that new options are available to consumers so that cheques will no longer be required by the time that they are abolished in 2018.

There have been further signs of recovery in the UK property market after official figures showed that property sales levels in December of last year reached their highest in two years

There is no doubt that over the past couple of years the property market has been through a very bumpy ride, and the repercussions of the turbulence that has been seen in the property market are still taking their toll. Over the past couple of years the nation has seen property price plummet, property sales levels plunge, and the availability of mortgage loans become increasingly restricted, all of which have had an adverse effect on the property sector in the UK.

However, there have been a number of signs of improvement in the property market over recent months, and the latest sign of recovery has come with figures that have been released by HM Revenue & Customs. The figures from HMRC have shown that in December of last year the number of property sales reached the highest level seen in two years, which will come as further encouraging news for the property sector.

The data indicated that in December 2009 the number of property sales completed for properties over the value of £40,000 came in at 104,000. This was said to be the first time since December of 2007 that property sales have exceeded the 100,000 mark. The lowest point seen in terms of transaction completions was seen in January of last year, when the property market was going through a particularly tough time. That month saw property sales reach only a paltry 41,000, which was the lowest level since records began in 1977.

Despite the encouraging data from HMRC many industry experts are still predicting that this year will see property sales levels remain stable rather than continue to increase. Mortgage availability has improved to some degree, but it is still very tough for many people, such as first time buyers, to get the finance that they need to purchase a home due to restricted availability and high deposit levels that lenders are demanding.

A leading UK supermarket is hoping to not only cut costs for consumers when it comes to their shopping but also hoping to cut back on food waste, which is an issue that has caused a lot of concern over the past couple of years. Tesco is soon to launch a ‘buy one get one free’ offer with a difference, which could cut back on people having to waste food yet still enable them to save money on the products that they buy regularly.

The first of the Tesco deals, which are known as ‘Buy One Get One Free – Later’ deals, is set to be launched this week, with others being introduced over time. The traditional ‘buy one get one free’ deals have become very popular with shoppers, particularly in the current financial climate, but these deals can pose a problem in that consumers do not get the chance to use the second product in some cases before its date expires. This has contributed to food wastage, and means that the consumer doesn’t get to benefit from the offer because the free item goes to waste.

The big difference with the Tesco ‘buy one get one free’ deal is that the consumer can purchase the product but can get the free one at a later date, which means that it won’t go to waste and the consumer still gets to benefit from the savings. It is generally perishable items that create the problem with ‘buy one get one free offers’ and the Tesco offer means that consumers are less likely to have food going off in the fridge.

Over the next couple of weeks shoppers that go to Tesco will be able to take advantage of ‘buy one get one free’ offers on perishables such as fruit and other foods and can either choose to take the free item right away in the usual way or can take the freebie the following week when they actually need it.

A spokesperson from Tesco said that whilst consumers were keen on ‘buy one get one free’ offers many of them – particularly those in smaller households – often did not have time to use the second item before it went past its best. She said that the new deal would ensure that customers had the increased flexibility to take the item when they needed it rather than risking it going off before they could use it.

There has been some good news for the UK recently following the release of official figures that have shown that the level of unemployment in the UK has fallen for the first time since 2008. The unexpected fall in unemployment figures occurred in the three months to November of last year, with unemployment numbers standing at 2.46 million reflecting a drop of seven thousand compared to the previous three months.

The fall in the number of unemployed means that the series of unemployment level increases that have been seen over the past eighteen months has been broken and the news will be welcomed by many people and industry groups. However, there have been warnings from government officials that the level of unemployment could start to increase again over the course of this year.

The Office for National Statistics has said that the percentage of unemployed had fallen from 7.9 percent last month to 7.8 percent for this month. There has also been a drop in the number of people that are claiming Job Seeker’s Allowance, which dropped to just over 1.6 million in December, reflecting a drop of over fifteen thousand over the month. This also came as good news, as industry experts had predicted that there would be a drop of just 2500.

The three month period to November of last year also saw a fall in the level of unemployment amongst those aged between sixteen and twenty four, with numbers falling from 943,000 to 927,000. However, whilst the figures appear to be encouraging it is thought that the fall in unemployment overall is due to a rising number of people taking on part time work to tide them over in the current climate.

The number of people working part time increased by 99,000 for the quarter, and this took the total number of people in part time employment to a record high of 7.71 million. Many of those that were working part time had only taken on part time work because they were not able to find a full time job.

The Council of Mortgage Lenders has recently released figures suggesting that there has been a seasonal dip in mortgage lending levels for the month of November 2009. However, despite the drop in mortgage loans for the months lending levels were still found to be far higher than they were in the same period in the previous year.

According to the data from the Council of Mortgage Lenders the number of mortgage loans handed out for property purchases in November was around 4 percent lower than the previous month, coming in at around 53,000. However, on the upside the number of mortgage loans for November was around 66 percent higher than the figure for November of 2008.

Officials from the Council of Mortgage Lenders indicated that first time buyers were still having a tough time getting onto the property ladder, with many still having to put down a minimum of 25 percent of the property value by way of a deposit. However, the organisation also said that the percentage of income that homeowners were having to allocate to their mortgage repayments was at its lowest in around five years thanks to the low base interest rate, which has now been at an all time low of just 0.5 percent for the past ten months.

A spokesperson from the Council of Mortgage Lenders said that it was encouraging to see that mortgage interest payments were now more affordable for both homeowners and new buyers. He said that mortgages were becoming more affordable, and repayments on mortgage loans had plummeted for many homeowners as a result of the low base interest rate. He added, however, that the market would continue to feel the strain for the foreseeable future as a result of the hefty deposits that lenders were still demanding from borrowers.

The CML data indicated a slowdown in the property market, and this backs up another recent report from the Royal Institute of Chartered Surveyors, which indicated that the pace of house price increases had started to slow down in December.

It has been predicted that the UK manufacturing sector will see a modest level of recovery over the course of this year. The prediction was made by the manufacturers’ organisation EEF. The organisation carried out a survey amongst manufacturers and found that the average growth expectation within the sector was only 1.2 percent for this year, rising to 3.4 percent for next year.

The EEF also predicted that there would be growth of around 0.9 percent this year for the economy as a whole. An economist from the organisation said that this modest level of recovery meant that the future for Britain remains uncertain. He added that the outlook was also variable for different manufacturing sectors. He said that although some had already been through the worst of the recession others still had difficult times ahead of them.

The EEF went on to state that 2010 was set to be another very challenging year for manufacturing and the economy as a whole, and that companies would continue to seek stability from policy makers. This comes just after the National Institute for Economic and Social Research reported that the nation had probably come out of recession during the fourth quarter of last year, although this is still to be confirmed when official figures are released within the next couple of weeks.

The EEF is said to have surveyed more than six hundred manufacturing companies across the company in order to collect the data with regards to growth expectations for this year. The results of the survey suggested that the manufacturing sector as a whole was still very cautious, and that firms within the sector did not have high expectations for recovery for this year despite the fact that the country is supposed to have come out of recession.

Recently the British Retails Consortium also reported that the retail industry was set to face another very tough year in 2010, and like the EEF has predicted that the retail sector will see little if any growth during the course of this year as consumers continue to rein in their spending.

Most people were expecting prices in shops to go up after Christmas as a result of the level of VAT rising from 15 percent to 17.5 percent on 1st January this year. The government reduced the VAT rate to 15 percent last year in order to try and get the economy back on its feet, but this was only a temporary measure and the VAT rate was increased back to its original level of 17.5 percent at the start of this year.

However, there is evidence that some supermarkets are exploiting this VAT increase according to a recent report, which some said to be hiking up prices on various product by more than the level of the VAT increase. An analysis of the various supermarkets was carried out recently, and the results found that the price on thousands of items had been increased disproportionately, with the price increase being higher than the VAT increase.

Around twelve and a half thousand products were looked at in total as part of the study, and out of these the prices on over one third had been increased disproportionately by retailers. This sneaky tactic will cause problems for the many struggling shoppers who already face having to cope with the debts that they accrued over Christmas and the VAT increase.

The research was carried out by Brand View on behalf of The Grocer magazine, and according to the report from the researchers a number of the major supermarket giants were found to have increased prices on some products by more than the sales tax increase, including Asda, Tesco, and Sainsbury’s. One industry official said that this deceit dispelled any hopes of special January deals from supermarkets, stating that it was a case of ‘of lies, damned lies, and VAT-related statistics.’

The researchers said that the government is set to make billions of pounds from the additional 2.5 percent that has been added back on to VAT. They also said that with the majority of products supermarkets had increased prices in proportion with the VAT increase, but with around four and a half thousand products the price increase was higher than 2.5 percent.

Earlier this month the Bank of England announced that for the tenth month in a row the base interest rate was to remain at its all time low of just 0.5 percent. However, despite this credit card firms have continued to increase their interest rates, and according to recent reports these interest rate hikes are set to hit shoppers hard as they struggle to pay off the debt that they have accrued over the Christmas period.

Figures have shown that the gap between the base interest rate and the average amount of interest being charged on credit cards is now at its highest level on record, with the average rate of interest on credit cards rising from 15.89 percent to 16.28 percent in December. It is thought that around nine million Brits used their credit cards to fund their Christmas spending, and the hike in interest rates will create difficulties for many of these people when it comes to repayments.

Many people have also been using their credit cards to make payments on their mortgages or rental properties over recent months, and the hike in interest rates will also cause problems for many of these consumers. Just before Christmas one major credit card provider, Capital One, was said to have increased its average rate of interest by up to 7 percent in some cases, with some of its customers seeing their interest rates pushed to nearly 40 percent.

According to officials the average rate of interest charges on credit cards is now at its highest since September 2006, with banks making huge profits as a result of the rate increases. Many are angered by the credit card rate increases given that the Prime Minister, Gordon Brown, stated last year that he would be talking such unfair practices by credit card providers and would ensure a ‘new responsible approach to lending’.

Over recent months many industry experts have urged consumers to ensure that they contact their credit card provider if their interest rate is hiked up to demand an explanation, and to state that they want to rate reverted in the event that there is no reasonable explanation. However, those that do not persuade their lenders to reduce the rate again should look at switching to a new provider that offers a lower rate of interest.

Having sunk to levels that resulted in the worst year of recession in nearly nine decades it has emerged that Britain officially came out of recession in the final quarter of last year. Many will welcome the news that Britain has moved out of recession following a particularly difficult year, but officials have said that the end of the recession came only after Britain had seen its worse year of recession since 1921.

Figures were released by the National Institute of Economic and Social Research, and the date showed that in the final quarter of 2009 UK gross domestic product increased by 0.3 percent compared to the previous quarter. However, despite this increase the economy overall shrank by 4.8 percent over the course of the year, which was the steepest fall in eighty eight years. The fall was greater than at any time during the Great Depression, reflecting the severity of the most recent recession seen in Britain.

It is thought that the lowest point of the recent recession was seen in March of this year according to the National Institute of Economic and Social Research, but officials from the group have said that there are now clear signs of recovery emerging. The end of the recession has come later than many had expected, as many experts had predicted that, like other major economies, Britain would come out of recession in the third quarter of last year, but this did not happen.

The Office for National Statistics is set to release official figures that will confirm that the nation is out of recession in the next two weeks. Many people will be wary of getting too confident about the recession being over given what happened in the third quarter of last year, when official figures showed that the economy had actually shrunk further despite prediction that the country would come out of recession.

Despite signs of recovery in the economy many consumers also remain concerned about the financial climate and the effects of the recession, and as a result of this consumer spending is set to remain subdued leaving retailers facing another challenging year in 2010.

A leading homeless charity has expressed concern over the number of people that are now making their mortgage repayments through the use of their credit cards. According to officials from the charity Shelter around one million people across the UK are using their credit cards to make payments on their mortgage or to pay their monthly rent.

The charity is concerned that at some point these consumers will find that they no longer have credit to rely on, and will not only find themselves up to their necks in credit card debt but will also find that they no longer have any means of making payments on their mortgage or rent. This could then lead to a rise in mortgage and rent defaults, and could ultimately end up with many of these people having their homes repossessed or being evicted by their landlords.

Overall the number of homeowners and tenants that are using their credit cards to make repayments on mortgages and rent represents around 6 percent of homes in the UK. The charity said that whilst the majority of tenants and homeowners that had found themselves in this situation were working class there were also some middle class professionals that were turning to credit cards to meet their mortgage or rent payments.

The survey that was carried out by Shelter involved polling over two thousand people, and officials from the charity said that they were shocked by the figures. The charity is now urging those that are struggling to make payments on their mortgage or rent to seek expert advice as they could otherwise find themselves in huge amounts of credit card debt and could still end up losing their home or being evicted.

A spokesperson from Shelter said that credit cards were not the answer for those that were struggling with their mortgage or rent payments, and that it was vital that these people sought advice from debt advice charities and experts rather than turning to their credit cards. She added that a rising number of people using their credit cards to pay their mortgage or rent were at risk of becoming homeless.

The deputy leader of the Labour party, Harriet Harman, has stated recently that she wants to see the retirement age in the UK scrapped, giving older people the right to continue working into their seventies or even their eighties should they wish to do so. Under the radical new proposals from Harman older people would not only be given the choice over whether they retired but would also be free to make other requests from their employers, as the new proposals would give them more rights and greater control.

Harman said that there is a myth that once a person reached the age of sixty five they are ‘past it’ and this is a myth that she wants to dispel through the introduction of new regulations. Under the new ruled those that wished to retire could still claim the state pension from the standard retirement age, but those that did not want to retire could not be forced to do so by their employer.

The new proposals may also allow those that reach the official retirement age but wish to continue working to ask for part time hours, flexible working hours, or even the facility to work from home. Any changes in the law would also cover those that may have signed contracts to say that they will retire at the standard retirement age. Miss Harman said that at present companies are not obliged to agree to requests from workers to continue working once they reach retirement age, but the new rules would change this by giving older people more rights legally.

Many companies, industry groups, and business leaders have insisted that some sort of cut off point is needed with regards to age, and Miss Harman’s plans to scrap the retirement age altogether will come as a shock to many of them. Many will also be concerned over the greater rights to flexible working hours that older people will be given, and whilst employers can turn the request down there will only be eight reasons for refusal.

Harman stated that she understood the concerns of worried employers, but added that the age of a person generally had no bearing on their ability, and this was why change was needed.

The UK Payments Council (APACS) has recently advised consumers in the UK to switch their bank account if their existing bank does not process faster payments. Officials from the Payments Council have said that if a customer’s bank does not allow them to move money on the same day between accounts with different banks then they should look for an alternative bank that does offer this facility.

According to the council some banks can still take up to three days to transfer money between accounts in different banks, and this is something that the Payments Council has said that it is determined to crack down on. The council said that it plans to take ‘a harder line’ with banks that are still taking days to electronically transfer money between accounts. Nationwide, which is one of the slowest at present according to reports, said that making the faster transfers was proving more difficult than it had anticipated.

One Nationwide customer said that he felt cheated by the fact that it was taking so long to transfer money, stating that he was effectively losing out on three day’s worth of interest when moving money around. Sandra Quinn from the Payments Council said that she sympathised with the many customers that were feeling the frustration of being unable to do something as simple as transfer money from one bank to another on the same day. She added that there were banks that were able to do this, and those that were getting really annoyed over the fact that their bank did not do this should consider moving their bank account.

Customers have been complaining for years about the fact that when they transferred money it disappeared for several days before arriving at its destination. In response to complaints about this the Faster Payment system was launched in 2008. However, the deadline for implementing the new system was the end of 2008, and many banks failed to meet this deadline. Many banks have said that the reason for delays over implementing the Faster Payments system is that they have to exercise caution over the risk of fraud.

After being announced this week that the base interest rate was being held at its record low of 0.5 percent for the tenth month in a row, this news was welcomed by many homeowners and industry groups. However, a recent report has shown that although the base rate has been at this all time low since March of last year a number of mortgage lenders have been increasing their mortgage interest rates on Standard Variable Rate mortgages.

The report claims that around eight building societies have increased their standard variable rate mortgage rates even though there has been no upward movement in the base rate, and this is resulting in homeowners paying up to £1400 a year extra on their mortgages. Many customers are now going for the SVR because it is often the cheapest option, and this is also the mortgage that people move onto when their special deals such as fixed rate deals come to an end.

The fact that some lenders have been increasing their SVR rates throughout the base rate freeze means that many borrowers are being stung with higher payments. There are around five and a half million homeowners that are on mortgages that are linked to lenders’ SVRs, so the higher payments could affect a rising number of borrowers as more and more lenders increase their SVR rates.

Some officials believe that since a handful of lenders have already increased their SVR rates more are likely to follow, which means that more and more borrowers could end up paying more on their mortgage repayments even if the Bank of England continues to keep the base interest rate on hold, as it is expected to do for some time to come. One industry expert said that the momentum to increase interest rates seemed to be ‘gathering pace’ amongst lenders, and added that now that some lenders had taken this step it was likely that others would follow.

In the meantime an economic advisor to Deloitte said that he thought the Bank of England should cut the base rate to 0 percent, adding that he believed that the base rate would stand at 1 percent or lower for at least the next five years.

The base interest rate has remained unchanged for yet another month, with the Bank of England confirming that it will remain at its all time low of 0.5 percent following the January Monetary Policy Committee meeting. The base rate has been at this record low since last March, and many industry experts were not surprised at the decision to keep the rate at 0.5 percent to kick off the New Year.

Many economists have predicted that the Bank of England will continue to keep the base rate on hold at 0.5 percent for the foreseeable future in a bid to try and revive the UK economy. The current base rate is the lowest it has ever been in the history of the Bank of England, which spans over three centuries. Whilst the UK is thought to have come out of recession in the final quarter of last year the economy is still very fragile, and it is hoped that keeping the interest rate at this low level could speed up recovery of the economy.

It was also announced after the latest MPC meeting that the quantitative easing programme would be maintained at £200 billion. Members of the MPC said that the programme would continue to be reviewed, and that it would take another month to complete. One economist said that the MPC had some challenging times ahead, as members would need to decide on how long to keep the base rate at record lows as well as whether to extend the QE programme next month.

He said that the decision to keep the base rate at 0.5 percent for January did not come as any surprise, and that policy makers would now have to start making tough decisions with regards to the future of the base rate over the coming months. Manufacturing bodies have welcomed the news of the base rate freeze, stating that whilst the economy seemed to be recovering to some degree the sustainability and strength of the recovery was in doubt. An official from the manufacturing group EEF said that the MPC was right to keep the base rate on hold until the economic picture became clearer.

Figures have shown that the number of mortgage approvals for the month of November showed another increase, but that at the same time the level of unsecured debt amongst consumers fell during the same month as more and more people strived to reduce their unsecured debt levels as much as possible. In the run up to Christmas many people traditionally get themselves into more debt with purchases through credit cards and loans, but this year saw people struggling to pay off their debts in light of the unfavourable financial and economic conditions.

With over 60,500 mortgages approved for the month the number of mortgage approvals was said to be at its highest since March 2008. However, whilst mortgage lending continued to rise the level of consumers credit continued to fall, dropping for the fifth consecutive month according to Bank of England figures. The current climate has led an increasing number of people to try and rid themselves of their unsecured debt as much as possible, leading to more money being paid back on this type of borrowing than is being borrowed.

With Christmas just around the corner there was an increase in credit card spending for the month of November. However, when the money repaid on other unsecured finance was taken into account the amount that was repaid by consumers for the month on unsecured credit outstripped the amount borrowed. With consumers being increasingly cautious about borrowing due to the financial climate they ended up repaying around £376 million more than they borrowed for the month of November according to the Bank of England figures.

Industry experts have said that the drop in unsecured credit amongst consumers has shown how the recession has affected the borrowing habits of consumers, with many afraid to take out credit for larger purchases such as cars as a result of insecurity over jobs and financial difficulties. In the twelve months to November consumers are said to have repaid a collective £7.85 billion on their unsecured debts.

The poor returns being offered on savings, stemming from the base rate which is still at an all time low of 0.5 percent, has also resulted in fewer people putting any spare cash into savings and instead using them to make larger repayments on high interest credit cards and loans, thus further impacting on the amount of money being repaid on unsecured debts.

Although we have now entered a New Year and many people may be hoping to make a fresh start in 2010 by doing things such as getting onto the property ladder reports have claimed that things will continue to be very difficult this year for the many people that are still striving to become homeowners. Despite some encouraging signs and measures designed to help those wishing to get onto the property ladder there are still many hurdles that will get in the way for first time buyers.

Industry experts have claimed in a recent report that first time buyers are going to continue struggling to get a mortgage loan and get onto the property ladder this year, despite rock bottom interest rates, more affordable house prices, and the fact that they would generally be in a better position to do so. One mortgage broker from London & County said that it was likely that mortgage conditions would remain extremely challenging for most first time buyers.

He added that the choice of mortgage loans for first time buyers had actually started to improve towards the end of last year, but stated that it was still likely that in order to get the better deals and rates first time buyers would still need to be able to raise at least 15 percent of the property value by way of a deposit. He added that first time buyers that were not able to raise a deposit of at least 15 percent of the property value would find themselves with a far poorer choice of mortgage products and would be penalised with higher rates on interest on their borrowing.

In addition to having to put down a higher deposit for the better deals first time buyers will also no longer have the stamp duty holiday on properties between £125,000 and £175,000 which also means shelling out extra cash. Until the end of last year the threshold for stamp duty exemption had been extended to £175,000 whereas previously it had been £125,000 – the level it has now come back down to.

He added that there were still no lenders that were prepared to offer 100 percent mortgages to first time buyers, and only one that would currently consider a 95 percent mortgage for those that had only a 5 percent deposit. He added that a bigger deposit could make a huge difference to the repayments that first time buyers would need to make, and therefore it was important for them to try and put down as high a deposit as possible in order to get the better deals.

Banks have recently been awarded another case in their favour after a High Court Judge ruled partially in their favour with regards to test cases that were being heard relating to credit card debts that consumers have been trying to escape. The test cases were referred to the High Court to determine whether consumers could escape their credit card debts over the failure of banks or lenders to provide the original credit agreement under the terms of the Consumer Credit Act.

However, the judge from the High Court in Manchester has stated that while the lender would have to be able to produce a credit agreement it would not have to be the original and could be a ‘reconstituted’. This means that if the original credit agreement has been lost or destroyed the loan or debt can still be enforced legally. Many claims management companies have been putting together thousands of cases relying on the original document having to be produced, and as a result of the ruling all of these cases may be affected.

According to reports many banks have difficulties in producing original credit agreements and loan documents, and one bank is said to have destroyed all of its old credit agreements. Under the Consumer Credit Act lenders must provide borrowers with a copy of their loan or credit agreement within twelve days of request. Claims management firms have been using the failure of banks to produce these documents to try and get their clients out of debt by claiming that the debt cannot be enforced.

Six test cases were examined by the High Court judge in order to reach a decision, and he stated that whilst consumers had a right to see a copy of the loan agreement or contract this should be for informational purposes and to check the state of their account rather than to check and see whether the agreement was initially executed properly. He said that the creditor could fulfil its responsibility by providing a reconstituted version of the agreement, albeit from other sources, rather than having to produce the original agreement.

After the last turbulent couple of years where the word ‘bailout’ has been the buzz word for the government the level of public debt has rocketed, with taxpayer’s money being used to bail out banks, try and boost the economy, and for whatever other purpose the Labour government sees fit. However, the government now has a responsibility to try and reduce this public debt, and one of the ways in which it will do this appears to be through sharp increases in petrol prices.

In fact, according to a recent report motorists in the UK have been warned to prepare themselves for rocketing fuel prices, and there are suggestions that the price of petrol could go up by a massive fifteen pence per litre, which would take the price of petrol to its highest level on record. If petrol prices do go up by this amount then the cost of a litre of unleaded petrol will rocket from £1.08 to £1.23.

It is thought that there will be an increase of five pence per litre of petrol in the spring of next year, and this will be the first increase to hit motorists. In the autumn a further petrol price increase of five pence per litre is expected, which means that the government will have pushed prices up by ten pence per litre in order to bring in more money from fuel tax and try and tackle the astonishing national debt.

As well as the petrol price increases from the government motorists will also face increases relating to market conditions, and this could amount to a further five pence per litre. In total this could amount to a crippling fifteen pence on a litre of petrol, which in the current economic climate could leave many drivers facing real problems.

The figures have come from the Petrol Retailers’ Association, and there are concerns that the tight profit margins that will arise from this situation could result in many petrol forecourts having to close altogether. In July of least year petrol price peaked at nearly £1.20 per litre as the cost per barrel soared, but as a result of the UK’s national debt it seems that the previous record could be beaten in 2010.

The Labour government has announced that it is to look at closing a legal loophole that has allowed lenders to repossess peoples’ homes without the matter having to go to court first. The government recently announced its plans to address this legal loophole, and this comes just after campaign groups and charities highlighted the problem following a repossession case last year.

In the repossession case the judge ruled in favour of the lender, which was GMAC-RFC, and as a result of the loophole struggling homeowners who had missed two repayments on their mortgage were at risk of being immediately repossessed without further action. The government has now stated that the move will prevent unscrupulous lenders from taking advantage of the loophole.

A consultation has been taking place over the past eight weeks with regards to the repossession loophole, and the decision has been made by the Ministry of Justice. Last year GMAC-RFC took possession of a property after the homeowner fell into arrears, and this sparked concern and campaigns from charities.

In the case the lender never had to go to court to get a repossession order but simply evicted the borrower for living in the property against the rules of the buy to let mortgage. Whilst the borrower claimed that his human rights had been violated the judge ruled in favour of the lender.

In October of this year, however, the same lender was fined nearly £3 million for the mistreatment of borrowers that fell into mortgage arrears. The lender was accused by the Financial Services Authority of being too quick to repossess properties and of applying unfair charges on the accounts of those that fell behind with their mortgage repayments.

Bridget Prentice, the Justice Ministers, spoke about the new proposals, and she said that under existing law lenders were able to sell or repossess a property without the agreement of the borrower or the courts, but that closing this legal loophole would mean that ‘rogue lenders’ were not able to use this loophole to their advantage.

With the gloomy year that most people have had in terms of their finances, and with the recession having taken its toll on many households across the country, most people would not have been surprised to see the High Streets around the country half empty on Boxing Day despite the launch of the traditional post Christmas sales.

However, according to figures the situation was quite the opposite, with millions of people pouring out of their homes on Boxing Day morning to hit the sales and try and pick up a bargain. In fact, retail analysts have stated that this year Boxing Day attracted the highest number of shoppers since records began, with around twelve million people thought to have hit the sales just twenty four hours after Christmas Day.

According to Experian the number shoppers that flooded out onto the streets on Boxing Day this year was around 20 percent higher than the number seen on Boxing Day last year, and it is clear that despite the difficult financial year that many have suffered and the recession that has gripped the UK shoppers are still keen to get out there and get their hands on a bargain.

The success of the Boxing Day sales has been put down to a number of factors. One explanation that has been given is that Boxing Day fell on a weekend this year, which may have resulted in a higher number of people being able to get out there and hit the shops. Another factor that has been attributed to the high number of sales shoppers is the VAT increase, which is due to take place on 1st January, and which many people may have been hoping to avoid by getting their bargains before that date.

Whilst the success of the High Street sales has bee described as ‘remarkable’ this year the British Retail Consortium has made it clear that High Street retailers should not get too complacent, as tough times still lie ahead for the coming year. The BRC carried out a survey in which 80 percent of retailers said that sales were unlikely to improve in 2010 compared to 2009.

Many consumers have rushed out over the last couple of days to get their hands on big ticket items in the sales before the VAT increase kicks in next week. VAT was reduced from 17.5 percent to 15 percent by the government last year in order to increase affordability for consumers and to help boost the economy. However, it was made clear that this was only a temporary measure, and the VAT level is set to return to its former 17.5 percent as of 1st January 2010.

However, whilst the VAT level will return officially to 17.5 percent as of this date some retailers have said that they will not be applying the VAT increases until the end of January, giving customers more time to get their hands on bargains and helping bring more customers through retailers’ doors. A number of major retailers have decided that they will not be increasing VAT levels just yet, and this includes stores such as Argos and Curry’s.

Another big name retailer, John Lewis, has decided to delay the VAT increase until the end of the month, and with regards to its clothing range supermarket giant Asda said that it will be increasing VAT only as and when its spring range of clothing starts to arrive over the course of the month. The delay in applying the VAT increase by some retailers will give shoppers a little more breathing space and more time to pick up the bargains that they are after.

Pubs had been told that they needed to start applying the VAT increases from the stroke of midnight on 1st January, but have now been told that they have until 6am on New Year’s Day to apply the new pricing. Some retailers have said that they will apply the increased VAT from New Year’s Day, as they believe that by doing so consumers that are considering buying big ticket items will do so sooner rather than later.

A number of industry experts have expressed concern about VAT being increased again, stating that this could damage consumer confidence after what has already been a difficult year and ahead of what is expected to be another challenging one.