Interest rates remain on hold
Many mortgage holders will be breathing a sigh of relief after the Bank of England announced that the base interest rate would remain at its all time low of just 0.5 percent for yet another month. It is nearly two years ago now since the base rate was slashed to the lowest level in the history of the Bank of England, and despite calls for rate increases in order to curb inflation the decision has been made to keep rates on hold for now.
For mortgage holders with variable rate mortgage loans this means that they do not have to worry about rocketing monthly repayments at a time that is already financially difficult for many.
Debt advice system needs to be streamlined
It has been suggested in a recent report that the debt advice system in the UK needs to be streamlined or order to make it more effective for those in need of such services. The suggestion comes as consumers gear themselves up for another financially challenging year, with the soaring cost of living, the VAT hike, government cuts, and potential job losses leaving many households in the financial edge.
If the year turns out to be as challenging as many have predicted it will be there could be further sharp increases in demand for debt related advice, as more and more people realise that they cannot keep up with their financial commitments in the difficult climate. The suggestion has come from the British Banker’s Association, which said that streamlining this sector could provide consumers with greater benefits.
The BBA said that consumers need to be given a better understanding of the system, and debt advice firms should be able to offer assistance to those struggling with debt at an earlier stage. S
Officials urge consumers to make use of their credit files
The financial sector and climate in the UK is still extremely fragile, and for the millions of people hoping to get a loan or credit card things have become increasingly difficult. Research has recently been carried out into the level of rejection that consumers are experiencing when it comes to getting finance such as credit cards and loans.
The research was carried out by moneysupermarket.com and showed that over the past year over 25 percent of applicants in the UK had been turned down for a loan or credit card, which equates to around 4.5 million consumers. Officials are concerned that this could result in millions of people causing further damage to what may be their already damaged credit files, and this could further reduce their chances of getting affordable finance in the future.
Consumers are being advised to familiarise themselves with their credit file prior to applying for any form of credit, as the state of the credit file and history is one of the things that lenders will look at when deciding whether to grant a loan or credit card.
Could you cope with the interest rate increase?
For nearly two years many homeowners on variable rate mortgages have revelled in the fact that the base interest rate has fallen to an all time low, having dropped to just 0.5 percent in the first quarter of 2008. The drop in the base rate meant that many people saw their monthly repayments plunge, leaving them with more disposable income and enabling them to dodge the risk of losing their property through being unable to meet their repayments.
Over the past couple of years people have used the extra money that they have saved on their repayments for a variety of things, from bumping up their savings or paying off debts and mortgage balances to treating themselves to some luxuries. However, nobody knows how long this low rate of interest will last, and some are speculating that it could come to an end in the near future, with many predicting that interest rates will increase this year.
This leaves consumers in a difficult position.