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.

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.”

The demand also stated that if Ms Ferguson was unable to settle the amount within 21 days, then Mr Owen would be able to apply for the bankruptcy of the Duchess.

This is the fourth demand that the former wife of Prince Andrew has received in the last year, and fuels further speculation that she may be suffering with serious debt problems after her New York offices were closed with debts of over £600,000.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “This news that another bill remains unpaid raises further concern for the extent of the duchess’ debt problems.

“I’d recommend she follows the advice the Queen is alledged to have told her, in that she needs to stop spending and seek some debt advice.”

The three companies who are believed to have issued writs against the duchess when she allegedly failed to settle their repeated demands for money included a bill of over £18,000 from a Hertfordshire- based accountancy firm.

It is understood that these have now been repaid.

Fergie’s recent debt management revives memories from the 1990′s when at one point her spending had resulted in a debt to Coutts bank for almost £5 million. Since then, the Duchess has tried to reduce her lavish lifestyle and become self-sufficient, by reinventing herself as children’s author, after-dinner speaker and the face for diet company Weight Watchers.

In a worst case scenario, household bills could rise upto 60 per cent by 2016, driving energy bills to the £2,000 mark for the year.

This came following a review of the energy market in Britain by watchdog Ofgem.

Currently the average household energy bills total £1,247 annually, but according to the Ofgem report this could soar to £1,995.

A spokesperson for utility switching service Energyhelpline, said: “If Ofgem’s worst case comes true, we are looking at the £2,000 a year energy bill.

“A rise of 60pc is credible, unfortunately, especially for electricity. A lot of generating plant is about to be replaced with greener technology.”

Ivan Cooper, Chairman at debt advice organisation Chiltern, said: “There are already a record number of households who are struggling to manage their finances in the current climate, resulting in more people seeking help with their debt management issues.

“A more sensible option would be to seek impartial debt advice from a reputable provider, as soon as households feel they may be unable to maintain any current commitments.”

The survey commissioned by Endsleigh insurance, showed that almost thirty per cent (29.2%) of students questioned thought that they will graduate with debts of over £20,000.

There was also over a quarter more (26.4%) who believed they will leave university owing up to £20,000 and 16.8 per cent believing they will have debts of up to £15,000.

One in thirteen (7.5%) students think that they will leave their studies with no debt problems at all.

Worrying though was the time that many students believed it would take to clear their debts. Almost one in four people (23.3%) believed that their debts would take twenty years to clear, whilst a further 38.4 per cent believe it will take ten years to get out of debt.

James Crocker, Endsleigh Financial Adviser, said: “The results of the survey point to the increasing financial strain that today’s student is under. In the short term, students need to manage their finances as carefully as possible by creating a budget and sticking to it so as not to get into even more debt.”

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “Many students will end up graduating with potential debt problems if they fail to land a job to quickly repay it.

“As we have seen recently the employment market is much tougher, so students may need to seek debt advice, along with seeking a job when they leave university.

“Prevention is always better then cure, so students should avoid developing high-interest credit card debts or unnecessarily high overdrafts to keep their debts lower for when they leave university.”

Research carried out by comparison site uSwitch, found that less than a quarter (22 per cent) of the people they questioned thought that they hadn’t got a great deal when they decided to switch energy provider at their doorstep.

Worse still was that almost a quarter of people felt intimidated, whilst almost one in six (59 per cent) thought that sales of this type were too pressurised.

Figures show that over seven million people have decided to change their energy provider at their doorstep, many in order to save money that they can then put towards getting out of debt and preventing debt problems.

Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “…more needs to be done to protect consumers and to make sure they are given all the information needed so they do not end up out of pocket.

“It could particularly help the vulnerable and elderly who like the reassurance of face-to-face contact and are the groups missing out most on the benefits of a competitive energy market.”

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “For people who are trying to reduce their expenditure, so they can repay debts quicker, these doorstep salespeople aren’t solving the issue.

“As a result, people’s debt problems aren’t being helped by switching energy provider at the door. The best way to save money on household expenses is by seeking impartial debt advice from a reputable specialist – as these will be able to explain ways to boost income and save money, whilst offering the most appropriate debt help solution where necessary.”

Most major credit card companies levy charges for late payment (of around £12 per month), meaning that the average person with two cards could face an extra £24 being charged to their credit card debt each month.

This adds further strain to already overstretched household finances, and could result in many more households experiencing debt problems as they struggle to cope with their debt management burden.

The Royal Mail strikes are set to carry on through October, and could also affect consumers that receive discounts from energy suppliers’ for prompt payments. British Gas, for example, gives discounts of up to £3.75 for eligible customers who settle their balances in full within 14 days.

Clare Francis, editor of moneysupermarket.com, said: “Not everyone is going to be caught out by the postal strike, but even accounting for dormant cards and cardholders who pay their bills by direct debit, the mail backlog could generate millions of pounds in charges for card providers.

“It could be worth agreeing to pay at least the minimum repayment by direct debit to make sure you’re not affected.”

Debt advice organisations have recommended seeking impartial help if you are struggling with debts.

Ivan Cooper, Chairman at debt management company Chiltern, said: “When faced with growing debts and shrinking incomes, people would benefit from seeking some impartial help from a specialist to get out of debt.

“Usually a more positive outcome can be achieved if debt problems are confronted sooner rather than later.”

The meltdown of the student loans process, reportedly caused by poor planning, administrative blunders and the recession, has left ten per cent of students without cash at the start of term.

This leaves thousands at the risk of developing debt problems, as they may have to fund their rent, books and other outgoings with their available credit.

For those without a credit card or overdraft facility, the risk is increased further – as they may be tempted to use expensive loan sharks or other ways to cover their costs.

Students have complained about documents going missing, and being stuck on hold for hours on telephone helplines only to be given no information when they finally get through.

Debt advice organisations have expressed concern for the 50,000 students who start without their much needed money.

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “It’s always difficult for students to balance their finances, but withoutthe funding in place from the start of term, more will be at risk of developing debt problems.

“More should be done to offer students debt help, as it is often their first taste of independent life away from home, and it can be very hard for them to get out of debt with their limited finances.”

In the three months to July, around 210,000 more people have been made unemployed, and the jobless figure now stands at 2.47 million, according to the Office for National Statistics.

People claiming for unemployment benefit rose too in August to 1.61 million, up 24,400 from July – the highest on record in over twelve years.

As people’s household finances are impacted by the reduction in income, debt help organisations warn that the number of people struggling with their debts will soar.

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “More people than ever are out of work and are finding re-employment difficult in the current jobs market.

“In all cases where you’re struggling to maintain payment, it’s worth seeking impartial debt advice.”

Employment minister, Jim Knight, said the government was doing all it could to return people back into work.

He said: “We’ve got to make sure that as we get back into growth, we grow jobs as well. That’s why we need an active government committed to tackling work, to tackling joblessness.”

Reputable companies like The Debt People, Hamilton Locke and Chiltern can offer simple and free debt advice, to help alleviate any debt problems, along with being able to recommend a suitable professional solution where necessary.

The level of unemployment is now at its highest since May 1995.

Due to the global credit crunch and recession, the nation’s finances have suffered from an average fall of almost £31k per household, straining many people’s ability to ease their daily debt problems.

A dramatic drop in property prices and a similar fall in pensions and investments meant that for many people the chance to release equity from their property and relieve debt management issues is no longer an option.

The report highlighted that the overall accumulated wealth of UK homes, plummeted by £815bn during the course of last year – a drop of 12%.

Martin Ellis, chief economist at the Halifax said: “It is a huge drop to happen in one year. But we have had the biggest house price fall yet seen in just one year, combined with a fall in equity prices.”

Debt advice organisations have spoken of the increased number of people seeking their help, to cope with the reduced options available.

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “For those who have relied on re-mortgaging to get out of debt in the past, they will have to look at other ways to cope with their finances.

“As house prices have fallen so far, the ability to release equity for many people is no longer an option – as there just isn’t any there in some cases.

“A good start is to seek impartial debt advice from a trusted and impartial organisation. These will be able to offer immediate help and support, along with being able to recommend a professional debt solution if one is needed.”

Reputable organisations, such as The Debt People, Chiltern and Hamilton Locke, can provide free debt advice to people suffering with debt problems.

Where necessary they can also provide a number of professional solutions, like Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs), to help you get out of debt.

The RBS-NatWest banking group, now majority owned by the UK taxpayer, has announced that it plans to reduce overdraft charges. The decision comes ahead of a much awaited decision from the Supreme Court regarding the regulation of bank charges by the Office of fair trading (OFT).

The cost of a bounced cheque will be slashed from £38 down to just £5, and will come into force on 1^st October this year. This represents a fee reduction of nearly 87%. The charge for paying an item on an account that is overdrawn will fall by 50%, from £30 to just £15.

Brian Hartzer, the head of UK retail banking was upbeat about the announcement, believing that it was good news for consumers, particularly because “fees for unarranged borrowing have been an area of ongoing concern”.

“As we look ahead there are many issues to consider, but we thought it was time to move this particular customer concern forward by cutting our charges.

“As it relates to past charges we are awaiting the outcome of the industry-wide bank charges test case,” added Mr Hartzer.

The news that RBS NatWest is reducing fees could well prompt similar moves from the other large UK banks. Debt advice specialists believe that this could help to relieve the pressure on many over indebted consumers, which have found themselves in financial difficulty in the wake of the credit crunch.

Record levels of personal debt have resulted in more people in need of debt help programmes such as an IVA, and any reduction in fees and charges could help these hard up individuals in their quest to become debt free.

According to their figures, there was a 15% fall in rush hour congestion, contributed by a quarter of commuters that lost their jobs doing so within the last year.

Reduced numbers on the roads was put down to rising unemployment, the rise in petrol prices affecting the number of car journeys taken and also people choosing to work from home in an effort to save money.

A fifth of commuters surveyed said that hard times had made them work from home, in a bid to save on travel costs.

They also found that Friday’s bucked the trend and saw a rise in traffic congestion, as more people choose to holiday in the UK rather than take expensive holidays aborad.

A spokesperson for the AA said: “The report brings both good news and bad news. Congestion is falling, but that is due to the recession, fuel prices and unemployment.

“So when times are hard it is with reluctance we look at ways of cutting down on car journeys.”

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “With unemployment and fuel costs still increasing, congestion could drop further still as more people become financially more prudent.

“Before deciding to sell their car though, they should seek some impartial debt advice, as it may not be necessary to offload their vehicle to solve any debt problems – there are alternative options to consider.”

The AA warns that congestion is most likely to grow again, in line with the economic recovery.

Since the onset of the recession, mortgages have been difficult to get, and few providers have been offering mega deals, since they did not have the money to lend in the first place.

The HSBC bank has announced a new deal at only 1.99% in an effort to win market share, however this is only for consumers that are able to come up with a deposit of 40% or more. The special rate is 1.95% below the HSBC standard variable mortgage rate of 3.94%, and it lasts for 2 years.

The announcement of the deal has heralded more confidence in the housing and mortgage sectors, and it is viewed by many to be a sign that the markets are beginning to ease. There are now in excess of 1,600 different mortgage deals available to UK consumers today. This is more than at any time since the start of 2009.

The only downside is that a large deposit is still required in order to get the best deals, and this has left the lowest rates of interest out of reach for many house purchasers, particularly the first time buyer market.

According to Moneyfacts, the financial information service, as many as 27% of all new mortgage deals requires a deposit of at least 40%. The same time last year, the number of deals that required such a high deposit stood at only 7%. What a difference a year makes.

Nathan Gladwell, of IVA advice specialists The Debt People said “it’s all very interesting.”

According to recently released figures nearly 2 million people are planning on working beyond their retirement, as a direct result of the current economic downturn.

Around a quarter of over-55s believe that they will be forced to work beyond the standard retirement age of 65, in order to make ends meet.

Nathan Gladwell, spokesman for leading debt advice specialists Chiltern Debt Management, is worried at the plight of the older generation. He said “There has been a marked increase in the number of over-55s in financial difficulty, contacting our organisation for help and debt advice.

“We are hugely concerned that individuals that have worked very hard, and for many years, could have no choice but to continue working in order to maintain their debts.

“People approaching retirement, should have something to look forward to, and not have to worry about what the future holds.”

Consumers that are suffering with debt problems should contact a debt specialist for advice before the situation deteriorates further.

The report was commissioned by charities Age Concern and Help the Aged, who warn that additional rises in the cost of fuel over 2008 woul dhave increased the burden on pensioners, and forced many to cut spending in other areas to be able to afford their bills.

The group reported that some of the elderly were even resorting to staying in bed in an effort to try and reduce the amount they spent on heating.

This comes after a recent study by Scottish Widows which illustrated that a third of pensioners still had outstanding loans and credit card debts.

With living costs having risen dramtically in recent years, eating in to any savings, many have had to use personal loans, credit cards or release equity in their property to cover rising costs.

But with the property market plummeting recently and banks refusing to loan money, many have racked up outstanding overdrafts and credit card debts to cope.

Andrew Harrop, head of public policy at Age Concern and Help the Aged, said: “Shockingly, the report finds that while poorer pensioners are spending more of their available income on energy, they are – at the same time – reducing the amount of energy they buy.

“Not only does this demonstrate the problem of soaring energy costs in recent times, but is a warning to policy makers and others that vulnerable older people could be putting their health at risk in winter just to cut costs.”

Ivan Cooper, Chairman at the UK’s leading debt management company Chiltern, said: “The debt management worries of the elderly have been increased by rising costs of energy bills in recent years.

“For many pensioners some impartial debt advice could ensure that they do not develop any serious debt problems.”

The government has claimed that it will assist the elderly with their fuel expenses though.

Minister for Energy and Climate Change, David Kidney, said: “Pensioners must not feel they can’t heat their homes this winter.

“We’re giving extra help to those households through a range of measures including Warm Front grants for insulation and heating improvements, winter fuel payments to all pensioners this winter, and we will create mandatory social price support for the poorest at the earliest opportunity.”