We’ve had Wimbledon, a short heat wave and plenty of drizzle, so it’s safe to say that summer has properly begun. What better way to enjoy the longer evenings and warmer rain than to kick back and enjoy the latest edition of debt and money news?
We’ve scoured the web for all the latest news on debt and money, so you don’t have to. Find out the latest on phoning 0800 numbers from your mobile, banks using jargon, soaring rents, payday loan complaints and much more. Well, a bit more.
Budget reveals £12bn of benefit cuts
The big story this month was the new Government’s first budget, which revealed where they are going to make £12bn of savings to the welfare benefits bill. The BBC has a detailed list of all the proposed changes to benefits so you can see if you’re affected.
The Institute for Fiscal Studies has said that the benefits changes will leave 13 million people worse off. StepChange chief executive, Mike O’Connor, said that cutting benefits “risks taking away vital lifelines for the people we help.”
FCA tells banks to “cut the jargon”
The Financial Conduct Authority (FCA) have spoken out against financial institutions love of endless small print and legalese. They’ve told them to cut out the jargon and use clearer methods of communications.
It’s hoped this will lead to banks and other lenders using graphics and videos instead of weighty booklets full of tiny lettering. Hurrah!
Payday loan complaints down
Citizen’s Advice have seen complaints about payday loans drop by half over the last year. Gillian Guy, Citizens Advice chief executive, described this as “good news for consumers”.
The reduction in complaints is put down to the new payday loan rules introduced at the start of the year. The new rules potentially reduce the number of unhappy payday loan customers but it seems likely that the overall number of payday loans being taken out is falling as well.
Call charges to 0800 calls from mobiles
A change in the European law has meant that calls to 0800 numbers will now be free from mobile phones. Calls to “freephone” numbers could cost you quite a bit from mobile phones under the old rules, so this change comes as welcome news.
At StepChange Debt Charity our main helpline number was already free to call from major mobile networks but this change means our 0800 and 0808 numbers are now free to call from all mobiles and landlines.
UK rents higher than anywhere else in Europe
New research shows that the UK has the most expensive rent in Europe. Figures from the National Housing Federation (NHF) reveal that the average renter in the UK spends 39% of their income on rent compared with a European average of 28%.
It’s grim news for renters, as NHF also suggest that landlords are offering shorter tenancies which is leading to less secured housing. The news is better for homeowners, as the British Banking Association have said that fierce competition has led to better mortgage deals (if you can get one).
Debt management plans not up to scratch
The Financial Conduct Authority (FCA) published their Thematic Review into the quality of debt management advice. The review didn’t name any names but there was fierce criticism of firms that provided poor advice and didn’t do enough to understand their clients’ situations.
The most extreme example in the report revealed a firm had recommended a payment plan that was due to last 125 years. StepChange Debt Charity chief executive, Mike O’Connor, said that the findings represented a “wake-up call for the whole debt management sector.”
Debt boss given jail time
In March 2013 we reported that Debt Help Direct Ltd. and Money Worries Ltd. had ceased trading and their managing Director, John Taylor-Groom, was arrested following reports that clients’ money had been stolen. The case has recently been to court and Taylor-Groom pleaded guilty to two counts of fraud by false representation.
Over £1m was taken from vulnerable clients with the intention to pay it towards their debts but the money was transferred to John Taylor-Groom’s personal bank account.
A spokesman for the Insolvency Service said “These companies targeted individuals who were already in severe financial difficulties and the ‘services’ provided by these companies simply made matters much worse.”
50 Cent files for bankruptcy
Curtis Jackson, otherwise known as 50 Cent, has filed for chapter 11 bankruptcy. The rapper has debts and assets in the $10m-$50m range, the debts being built up mostly on consumer debt to cover personal, family and household costs.
Bankruptcy in the US is a bit different to the UK, but chapter 11 bankruptcy has some similarities with an IVA as it’s a way to restructure debts to make them more manageable. Even though filing for bankruptcy makes it sounds like he’s got no money there’s an interesting article about how he might not actually be as hard up as it sounds.
We don’t know anything about 50 Cent’s finances but if he was to ask for advice we’d probably suggest he spends less time “In da club”. Maybe his next hit single will be about his new found love of thrifty nights in.
And that’s it for this month’s debt news. We’ll be back next month with more goings on from the world of debt and money. If you’d like to receive articles like this sent to your inbox then sign up to our monthly MoneyAware newsletter.