This figure highlights the true extent of the financial pain that families across the land will have to face, according to the Institute of Fiscal Studies (IFS).

The think-tank predicts that even families from poorer backgrounds, who may be struggling with their own debt management issues, look set to see their living standards suffer as a result of the proposed measures to be introduced by Chancellor Alistair Darling.

To protect the “ringfenced” areas of schools, hospitals and the police force, there needs to be drastic cuts in other budgets – such as housing, transport, defence and higher education budgets.

Cuts of around 7 per cent a year, 20 per cent over three years, indicate the harshest squeeze since the Second World War, tougher than anything in the austerity years of the 1970s or early 1980s.

After three years some government departments will see their real-terms budgets cut by a fifth, with subsequent job and pay cuts inevitable.

This may mean that many people working within public sector bodies, or those providing services into the public sector, see their household finances squeezed as cut-backs and other budget cuts trim available cash.

Even in the NHS – where total overall hospital spending is protected – Health Secretary Andy Burnham conceded that there will be real cuts in some hospital and GP budgets, along with a pay freeze for doctors and a slash-and-burn approach to management.

Ivan Cooper, Chairman at debt help experts Chiltern, said: “Budgets across Britain look set to be streamlined, meaning many people will need to consider their own financial position more carefully – to prevent any serious debt problems from developing.

“For people already affected by the recession, independent debt advice from a reputable DEMSA affiliated provider – like Hamilton Locke or Chiltern – is usually beneficial.”

£2,400 each to solve nation's debt management problems is a post from: Hamilton Locke Debt Management

The additional cost of keeping children entertained over the festive season means that more than three in four parents (77 per cent) admit that they will spend more money than they can afford to on their kids, during what is an already expensive time of year.

According to research from online bank, Egg, the average family is set to fork out almost £40 a day on keeping boredom at bay from their children during the Christmas break.

Along with splashing out on toys and presents, parents are most likely to keep children entertained by spending on additional activities such as going to the cinema, going out for lunch or for buying books, comics or DVDs.

This all adds up to an average cost of approx £540 for the two-week British Christmas holiday.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “Overstretching financially at this time of year can prove very damaging to finances throughout the rest of the year, as household budgets are squeezed to make repayments.

“With interest rates and additional tax rises expected next year, household finances are already set to be under increasing pressure, so it’s best to avoid potential debt problems by keeping spending in check over Christmas.”

Three in four parents risk developing debt problems this Christmas is a post from: Hamilton Locke Debt Management

During October, people managed to repay their unsecured balances – such as overdrafts, personal loans and credit card debts – by £579m, the largest contraction since 1993 when the Bank of England started recording figures in this way.

It was also only the sixth time on record that consumer credit repayments have outstripped new borrowing.

This was driven by strong repayments on both loans and overdrafts, with additional borrowing on these falling by £713m throughout the month. However, lending on credit cards almost doubled, rising by £134m.

There was also another sharp fall in the amount of money held in building society savings accounts. October saw £1.24 billion more money withdrawn from savings accounts than was paid into them, the eighth month in a row where this happened.

Adrian Coles, director-general of the Building Societies Association, said: “There is little incentive for people to increase savings whilst the Bank rate remains at its current low level, and many may opt to repay debt instead.”

Ivan Cooper, Chairman at debt advice experts Chiltern, said: “The amount held in savings has fallen consecutively over the last eight months which is quite worrying, as it indicates that people may be eating away at them just to get by.

“But the worry is what happens when people’s savings run out? There is the possibility that they could develop debt problems if they continue to spend more than they earn.”

Consumers continue to ease debt management problems is a post from: Hamilton Locke Debt Management

Consumers have been turning to Debt Management and IVA providers in increasing numbers in an effort to avoid total financial ruin. Since the start of the current financial meltdown, there has been a sharp increase in unemployment as well as repeated falls in the average value of property.

These factors, along with wage freezes, and other influences, have left many consumers unable to cope with their unsecured loans and credit card debt problems.

Debt management and IVA providers urge people to speak to an expert before it’s too late. There are many different solutions available for people that need debt help, the important thing is to act now, before the situation gets any worse.

This news that unsecured borrowing had declined has added weight to the argument that consumers are more likely to pay off unsecured debts, instead of saving up during periods of low interest rates.

The number of new mortgages approved during October rose for the 11th consecutive month, whilst at the same time unsecured loans declined by £713 million in October compared, when compared with the previous month. The number of people applying for re-mortgages remained subdued.

unsecured loans down, but credit card debt up

There was a surprise increase in credit card debt levels, as spending on plastic increased by £134 million during October, compared with the previous month. This was more than offset by the decline in other forms of debt such as loans for cars, hire purchase agreements and unsecured bank loans.

The total of outstanding unsecured loans in the UK is around £228 billion, which is a similar figure to the beginning of last year. This shows that despite the best efforts of consumers to reduce their borrowings on unsecured loans, the figures remain more or less unchanged.

If you are struggling with your finances, and having difficulty making repayments on credit card debt and other loans, the best thing to do is contact an IVA or Debt Management provider for some help and advice. DEMSA, the Debt Managers Standards Association, have received approval for its code of practice under the Office of Fair Trading Consumer Codes Approval Scheme for advice for debt management plans (DMP) and Individual Voluntary Arrangements (IVA). A list of DEMSA members can be found on their website, demsa.co.uk.

Debt Management worries ease as consumer borrowing falls is a post from: Hamilton Locke Debt Management

Most commentators agree with the Chancellors remarks; however the most recent evidence shows the pace of growth in jobless numbers is slowing noticeably. Generally, the UK has been doing a good job keeping unemployment down. According to one reading of the official statistics, the number of people out of work has been falling over the last couple of months, and now stands at just below 2.5m. This represents around 8% of the total workforce.

When you take into account the 6% fall in GDP seen since the spring of last year it could be seen as a positive when you consider how modest the rise in UK unemployment has been. The Governor of the Bank of England and the Director General of the CBI have both recently pointed out that things are not all doom and gloom. Other countries have seen much higher unemployment, including the United States. Mr Darling’s remarks coincided with the news concerning the Dubai crisis.

There has been a sharp increase in the number of UK consumers that are struggling to repay their debts since the start of the current recession. Debt Management and IVA providers have had to deal with more people with unaffordable debts as unemployment continues to increase.

Ivan Cooper, Chairman at Chiltern Debt Management said: “We are monitoring the jobless situation closely and, wherever possible, we are putting in place the necessary provisions to deal with increasing numbers of over indebted consumers.

“We welcome the news from the Chancellor concerning the decline in the rate of increase in jobless numbers, as we all hope to see an end to the current financial crisis soon.”

Debt management and IVA providers worry as jobless on increase is a post from: Hamilton Locke Debt Management

Dubai is a country associated with extreme wealth due to oil and hyper-tourism, but in recent times, many of the luxurious properties built by state-owned companies such as Dubai World have struggled to sell. Houses worth up to $2 million less than three years ago are still lay dormant and can be snapped up for $250,000. Granted that is still a lot of money, but the economy in Dubai isn’t geared to make a loss on these projects.

Dubai World have announced that they will have to delay the repayment of some of it’s debt, causing the markets in Asia to drop steeply. Some financial forecasters are worried that the weakened state of the European economies will allow the credit crunch to return. If this were to happen, global demand would dip again and commodities including oil would fall in value.

The anticipatory effect has caused a fall in the price of a barrel of crude across the world, down $1.26 in London and almost 5% in the US. Share indexes in Germany, France and the UK opened down 1%.

It is difficult to see exactly how we will be affected in the UK, however, chances are this will slow any recovery being made across the country and may make the debt problems of average Britons worse.

Ivan Cooper, Chairman at Chiltern Debt Management said: “This is a very worrying situation, just as the country starts to look like it is turning a corner, something seeming unrelated starts to cause such concern.

“For those whose finances are already stretched, this could be a serious worry and seeking advice from a reputable company – like Hamilton Locke, The Debt People or Chiltern.”

Share prices fall due to Dubai debt problems is a post from: Hamilton Locke Debt Management

Earlier rulings in favour of the Office of Fair Trading’s investigation into the unfairness of unauthorised overdraft fees, have been overturned by a Supreme Court judgement.

The case at stake, which has been running for over two years, has been welcomed by banks – it allegedly brings an extra £2.6bn of income each year for them.

Campaigners against the unfair charges have been dismayed with the ruling, and the OFT are likely to challenge the decision by using other powers, such as instigating a full Competition Commission enquiry, to attack the overdraft fees.

In explaining his ruling, Lord Phillips the Supreme Court’s president said that customers had agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the appropriate regulations.

Lord Phillips added that the OFT could still try to scrutinise bank charges under other parts of the regulations and that this was not the end of the matter.

He said: “This will not close the door on the OFT’s investigations and may well not resolve the myriad cases that are currently stayed [put on hold] in which customers have challenged the relevant charges.”

In response to the ruling the OFT said that it was “disappointed” with the judgement.

In a statement they said: “The OFT will now consider the detail of this judgment before it makes a decision on whether or not to continue its investigation into unarranged overdraft charging terms.”

Ivan Cooper, Chairman at debt advice specialists Chiltern said: “This is a devastating blow to consumers who believe that they have been unfairly charged for their poor debt management.

“If anything, it should kick-start people to ensure they avoid any extra charges by putting adeqaute overdraft arrangements in place.

“For people who are still struggling to manage their current finances may be best advised to seek impartial debt help from a reputable provider – like Hamilton Locke, The Debt People or Chiltern.”

People who received payments from banks prior to this test case starting will be allowed to keep their money, because the pay-outs were made as “goodwill gestures”.

Debt management misery as banks win at Supreme Court is a post from: Hamilton Locke Debt Management

The study, by the Institute of Employment Rights (IER), suggests that people on low wages are currently suffering financially because of the way the complex tax system operates and that they are also suffering most from the economic downturn.

It has called for the government to do more to assist people struggling to get out of debt, by providing further debt advice services, by increasing the minimum wage and by making the tax system fairer.

Carolyn Jones, Director at the IER, said: “The tax system should be used in a more progressive way to break down inequality in our society.

“We would like to see the minimum wage raised to half the median male earnings. It should take it up from £5.80 or whatever it is now, to around about £7.

“We do have the national minimum wage but it has been set at such a low rate, we argue it institutionalises low pay [rather] than solve the problem.”

She also added that the minimum wage was still “miniscule” when compared to the money earned by executives.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “People on lower wages are usually the first to be affected by an economic downturn, as any increase in costs or reduction in income is amplified.

“This can often mean that any outstanding debts become difficult to maintain and the impartial advice of a reputable debt help organisation, like Chiltern, is often required to make repaying debts more manageable.”

The IER’s demand for more help with taxes for lower wage earners follows the call from the Trades Union Congress (TUC) for limits on the amount of tax relief that can be claimed by those earning more than £100,000.

New analysis by the TUC shows that 3.1 per cent of the tax-paying population receives a whopping 31 per cent of all tax relief, averaging £18,750 a year each.

Debt advice needed for lower earners is a post from: Hamilton Locke Debt Management

Richard Fleming is the UK head of restructuring at KPMG, who have been appointed as administrators. Earlier today he said that he was in “advanced talks regarding the sale of the business with a number of interested parties”.

However, he added: “Unfortunately there has not been sufficient interest in these 381 stores as part of the going concern sale, so we have no option but to close them. However, we have had an enormous amount of interest in these sites from over 700 small local businesses and private individuals.

“Christie & Co is assisting us in assigning the leases of the remaining stores to interested buyers.”

A Bleak Christmas for Employees

Whilst it makes sense in the big picture, the staff are not likely to be happy to find out that the stores are planned to be closed by 16th December, though this does depend on stock levels at an individual store level. Stock liquidation sales are expected to start as soon as November 24th, just 1 months before Christmas.

To make matters worse, First Quench is not the only off-license chain to fail during the recession. Wine Cellar went into administration only last month meaning that 61 of its 170 shops were closed and the rest sold to a new owner. The trend goes back further to 2005 when threshers bought out 200 shops from the Unwins chain following it going into administration. This makes it unlikely that the staff can find similar roles at other off-licenses, which won’t help them with their debt problems.

Following in the footsteps of Woolies

Drinks companies struggled with the idea of supplying off-licenses prior to invoices being paid for insurance reasons… so what’s changed? Trade Credit Insurance used to be the main mechanism through which chained off-licenses purchased drinks without settling invoices in advance, however, this was withdrawn following it being sited a major contributing factor to the collapse of Woolworths.

The first Threshers shop was opened by Samuel Thresher in 1897. It was bought by Flowers Breweries in the 1950s and became part of Whitbread, the current owner of Premier Inn and Costa Coffee, in 1962.

It was merged in 1998 with Victoria Wine, owned by Allied Domecq, before being bought by Nomura Principal Finance in 2003. First Quench has been owned by American private equity company Vision Capital since 2007.

2,000 More Jobs to go at Threshers is a post from: Hamilton Locke Debt Management

Following supermarkets raising their prices, the cost of petrol and diesel is now as high (if not higher) than oil giants such as Shell and Esso.

For the first time in over a year the average cost of diesel has shot through the £5 a gallon barrier, with petrol only marginally behind, according to motorist group the AA.

Over th elast month, supermarket chains like Tesco, Sainsbury and Asda – who are normally applauded for keeping fuel costs down – have raised the average price of a litre by by more than 4p.

This has meant that the monthly fuel cost of a car is now £3.98 higher for petrol cars and £3.26 for diesel, causing further strain on already overstretched household finances.

Ivan Cooper, Chairman at debt advice experts Chiltern, said: “Households have been under increasing pressure financially, as the recession and growing unemployment take hold.

“This impacts how much money is available each month, which can often mean that some loans and credit card debt payments aren’t met.

“Seeking debt advice from a reputable provider – like Hamilton Locke, The Debt People or Chiltern – can usually prevent this from happening, as an adequate budget is calculated and debts are prioritised accordingly.”

For immediate debt advice, or to learn more about a full range of professional debt management programmes, please call the number at the top of this page.

Highest fuel prices causing debt management problems is a post from: Hamilton Locke Debt Management

A team of chartered accountants have been appointed to handle the liquidation of the footballer turned movie star’s company, which was set up in 1999 following Jones’s retirement from football.

At the minute, they are unsure exactly how much he owes to his numerous creditors.

Last night Vinnie Jones’s Los Angeles-based manager said he did not know about the tax bill because it was sent to a previous manager who had since died.

He said that Jones was now communicating with his accountants to settle the outstanding debts.

Alex Cole, Jones’s manager added: “The money owed is in one of Mr Jones’s business accounts and has nothing to do with his personal finances.”

This isn’t the first news that the hardman might be struggling with debt problems, as earlier this year it was reported that Jones owed over £10,000 in child maintenance payments.

Ivan Cooper, Chairman at leading debt advice organisation Chiltern, said: “Vinnie Jones is now in a much more testing battle than his onfield conflicts – with the taxman.

“In industries where wages can be less consistent than other professions, such as acting, it can sometimes be difficult to manage finances efficiently.

“For all debt management worries, it’s worth speaking to an impartial expert – as most problems can usually be avoided if they are dealt with sooner.”

Hard-up hardman needs debt advice is a post from: Hamilton Locke Debt Management

During the three months from July to Septemeber, the number of homes repossessed increased by 3% on last year’s figures during the same period.

The CML report showed that repossessions in the UK had risen to 11,700 for the third quarter, however this was lower han the 12,700 repossessions during the first three months of the year.

The number of homeowners with arrears on their mortgages also fell over the course of the year. By the end of quarter three 194,600 mortgages (1.77% of the total) were in arrears of 2.5% or more of the outstanding balance, compared to 204,200 cases (1.86% of all mortgages) at the end of June.

As a result of the number of households falling into difficulties slowing down, the CML has reduced its forecast of repossessions for the year from 65,000 to 48,000.

This is an already reduced figure (from around 75,000) due to the interest rate remaining at a historic low and government assistance initiatives, although they warn that next year will see an increase in the number of people struggling to get out of debt with repossessions rising slightly.

Michael Coogan, Director General at the CML, said: “Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise from the low levels that most commentators now expect to persist for some time.

“Borrowers should take heart from the latest findings as they reinforce the fact that lenders really do want to keep people in their homes – and are doing so.”

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “It’s encouraging that the expected number of repossessions has been revised down, but more should be done to help the 48,000 or so people who are clearly struggling with debt problems.

“Companies, like Chiltern, can often help people avoid losing their homes if the problems are caused by poor prioritisation and debt management of their unsecured balances.

“By seeking impartial debt advice as soon as any potential issues are spotted, repossession and bankruptcy can often be prevented.”

More debt advice needed as repossessions rise by 3% is a post from: Hamilton Locke Debt Management

More worrying is the news that around three quarters of Brits are short of money to pay for this year’s festivities, so could be walking into a further £8billion hangover.

The survey by Money.co.uk also shows that a third of us are worried about the overdrafts and credit card debts that this Christmas will bring, and only 15% of those questioned had made an effort to save up for the season’s spending.

As a result, 85% of people could end up developing serious debt problems if they overstretch themselves on their store cards and other credit streams.

Chris Morling from Money.co.uk said: “You have to worry about the effect all this last-minute spending will have in January.

“Many people are likely to be very short of cash going into the New Year – not a great start.”

Ivan Cooper, Chairman at debt management experts Chiltern, said: “In the current climate, taking on any more credit than you can realistically afford is a dangerous game.

“Yes, it’s nice to give presents and be part of the festivities, but more important is ensuring that once the dust has settled you can still afford to live happily.”

The best way to avoid debt problems around christmas is to take a serious look at your current debt management and see if you are spending more than you have coming in.

For people who are struggling with their debt management problems, a professional solution may help relieve debt stress immediately.

Reputable debt help companies, like The Debt People, Hamilton Locke and Chiltern, offer a number of professional debt solutions.

These include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs), Trust Deeds amongst others. Debt Management Plans, IVAs and Trust Deeds enable repayments towards multiple unsecured balances to be gathered into one manageable payment.

For immediate debt advice, or to learn more about debt management solutions, please call the number at the top of this page.

Avoiding debt problems this Christmas is a post from: Hamilton Locke Debt Management

According to figures released by the RAC, motorists are cutting back on their driving costs by using their vehicles less, opting for smaller cars and running just one car per family.

These cut backs have driven the average cost of motoring down by around 5% for Britain’s 30 million drivers, meaning the annual cost has shrunk by £123 to £2,219 a year.

Their figures suggest that the cost per mile to run a new car is 18.49p per mile, compared to 19.5 per mile in 2008.

Despite this, the research by RAC showed that eighty per cent of drivers actually thought that running costs for a car had increased, causing 45% of people to change their driving habits.

Of these, twenty per cent had started running just one car per household, saving an average of £229 a month. A further 28% said they were using their car less, with 6% switching to a smaller model.

The RAC’s motoring strategist, Adrian Tink, said: “We’re seeing motorists really question how they use their cars. The trend towards the one car family shows how people are prepared to make fundamental lifestyle changes for the benefit of themselves, their families and their pockets.

“But such change for a lot of drivers is still merely an aspiration, with practical difficulties caused by work and family needs or a lack of alternatives, such as inadequate public transport, stopping them in their tyre tracks.”

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “The most common reason given on this survey for people changing driving habit was to save money.

“Reducing expenditure in this way is very frugal, and can prevent debt problems from developing.

“For those who cannot reduce car usage for practical reasons, but who may be struggling with their finances, seeking impartial debt advice is usually recommended.”

Debt management worries drive down car usage is a post from: Hamilton Locke Debt Management

The photo on the newspaper’s website, features two Ferraris, a Porsche and a French two-seater Cap 10 stunt plane which illustrates how widespread the recession has hit.

Even the super-rich have suffered under the economic crisis, as redundancies have struck and debt problems have been developed in a bid to stay afloat.

Paul Aitken from website Borro claims that over 1,000 designer watches have been pawned during the recession, with a value of over £1m.

He also claims that they have loaned money to Premiership footballers, and that they have over a million pounds worth of supercars in storage.

Mr Aitken said: “We’ve seen the biggest economic crisis hit this country for years, and everyone is feeling the disastrous effects.

“When someone rang us asking to pawn his Ferrari we thought he was joking. This really shows how hard the recession has hit people – even those who are well-off have had to adjust their standard of living.”

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “Every facet of society is feeling the crunch and this shows that even those with huge wages can be at risk if they overspend.

“The best advice is to seek impartial debt help from a reputable organisation, like Chiltern, as most debt problems can be sorted out if they are addressed sooner rather than later.”

Even super-rich suffering with debt management issues is a post from: Hamilton Locke Debt Management