Is paying your mum or dad's debts really a good idea? There was a lovely story a couple of years ago about Tyrone Mings paying off his mum's debt But he was a successful professional footballer so he could no doubt afford it. For the not so rich, there isn't a simple answer as every case is different, but I've put together some pointers for you to look at the options. I'll talk … [Read more...]
Will my pension be safe in a DMP?
The pension changes that came in in 2015 gave many people over 55 a new option for paying off their debts, by taking money from their pension pot. I've looked at whether this is generally a good idea in Should you use your pension to pay your debts? but in this article I focus on people who are already in a Debt Management Plan (DMP). This article is relevant for people who are over 55 (or … [Read more...]
Should you use your pension to pay off your debts?
More people than ever are retiring with significant amounts of debt. One in three people planning to retire now expects to have debts - an average of over £17,000. And annuity rates have been low for a long while, although they should be starting to rise as interest rates edge up in 2022. So with more debt to pay and their likely pension income getting less, it's not surprising that many people … [Read more...]
Is your pension safe in an IVA?
Many people who are over 55 can take some or all of their pension pot in cash before they actually retire. You need to know how this may affect you if you are considering an IVA. If you already have an IVA, you may be wondering if your pension is safe. First a warning: IVAs are individual arrangements and it is possible for almost anything to be included or excluded in the detailed terms and … [Read more...]
New Insolvency Service guidelines on pensions
On 26 March 2015, the Insolvency Service published Undrawn pension entitlements: Summary of guidance for insolvency practitioners and debt advisors. With "pensions freedom" coming into force on 6th April 2015, the Insolvency Service's aim was to clarify the murky situation around bankruptcy and pensions. Further clarification then came with the Guidance Issued to Receivers and Guidance Issued to … [Read more...]
Splitting up – how to separate finances
Emotions and coping with the children's concerns may be your immediate worries when you split from your partner. But even if financial concerns don't seem as important, it's a good idea to try to sort out any money problems and get separate finances as soon as possible. I'm going to look at four main areas which are important for separate finances: benefit claims; establishing a … [Read more...]
Repossession after bankruptcy – be careful!
What do you need to do if you want your house to be repossessed after you go bankrupt in England, Wales or Northern Ireland? Perhaps the house is unaffordable, has negative equity, or it's the wrong size for you. For whatever reason, you want to move out, are happy for the mortgage lender to repossess and may want to "hand back the keys" as fast as possible to get it all over with. The … [Read more...]
Bad credit loans to avoid
Logbook loans, guarantor loans, "pay weekly" shops such as BrightHouse - these may sound attractive if you are short on cash but have a poor credit rating or have been refused a payday loan. But this sort of debt can end in disaster if you have money problems. This article looks at bad credit loans, how they create a lot more problems than they solve and what alternatives might work better for … [Read more...]
How can an experiment help with your debts?
I'm interested in the psychology of debt - what makes it harder or easier to tackle a debt problem. I think you may be able to make use of the Hawthorne Effect to help you clear your debts. Never heard of it? Read on! The Hawthorne Effect is the tendency for humans to change their behaviour simply because they are being studied. It was named after the factory where it was first noticed 90 … [Read more...]
Pension changes – the challenge for debt advice
This is a guest post by Nick Lord. It argues that the new pension rules are a game-changer for debt advisers and that debt advice agencies need to put measures in place to ensure that their advisers can provide best advice post April 2015. Nick is a consultant on money advice and personal finance issues working with Government departments, regulators and firms. Debt Advice and the Proposed … [Read more...]
How IVA, DRO or bankruptcy affect affordability complaints
If you have been insolvent - bankrupt, had an IVA or a Debt Relief Order (DRO) - then you need to know how this affects a claim for a refund for a financial product. You can't make a new claim for a PPI refund - the deadline for this passed at the end of August 2019. But you can still make affordability complaints and other sorts of compensation eg for packaged bank accounts. New credit … [Read more...]
Are you being tricked into debt by your own mind?
Have you heard of "present bias"? It's not wanting a jumper for your birthday rather than a bottle of wine, it's a behavioural economics term for a self-delusion that everyone suffers from to some extent. It affects many areas of life and one of the most important is making poor decisions about money - present bias makes it easy to get into debt and much harder to climb out. All too often we … [Read more...]
A friend owes me money – what can I do?
What should you do if a friend owes you money? Perhaps you took out a loan or bought something with your credit card for them because you had a better credit rating. Or perhaps you just lent them the money. And now they aren't repaying you. It would have been better to have thought all this through BEFORE lending the money... research has shown that nearly a third of people have fallen out … [Read more...]
Are you getting too many calls about debts?
Creditors and debt collectors can phone you about your debts and ask you to pay the money you owe. But too many calls are unreasonable and can cross the line into harassment, which is illegal. If you are being phoned too often by debt collectors, there are practical steps you can take to stop it. How many is "too many"? In this news story, a man kept a record of over 700 calls from MBNA … [Read more...]
Do a million need payday loan compensation?
On 2nd October 2014 the Financial Conduct Authority (FCA) announced that Wonga had agreed to compensate an estimated 375,000 customers where Wonga's "affordability" checks are likely to have been inadequate. The common reactions were first that Wonga was being made an example of to warn other payday lenders and second that this was a huge number of refunds... But should many more people get … [Read more...]