Daily Archives: October 1, 2008

Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, IVA, Money, Personal Finance, Retirement

Debt Advisers Direct Have Emphasised The Importance Of Joining A Pension Scheme As A Means Of Securing An Income And Staying Out Of Debt When It Comes To Retirement

Responding to a recent report regarding the growing pensions divide in the UK, Debt Advisers Direct (http://www.debtadvisersdirect.co.uk) advised workers to ensure they are planning well financially for the future, and warned anyone approaching retirement with debts to take action as soon as possible.

The report from the Office for National Statistics (ONS) showed a growing gap in pensions contributions between the public and private sectors. Private sector membership of final-salary pension schemes – in which companies pay a percentage of the employee’s final salary throughout retirement – fell from 3 million in 2006 to 2.7 million in 2007.

Instead, many private sector employers are opting for money purchase schemes, in which workers pay into a retirement fund which is usually invested in the stock market. When the employee retires, the fund is used to buy an annuity – a financial product that provides an income for the rest of their life. The size of the pension depends on how well the retirement fund performs and on the annuity rates available at retirement.

The public sector, on the other hand, showed a rise from 5.1 million to 5.2 million members of final-salary pension schemes last year.

The statistics highlight a clear difference between the two types of pension. The ONS report shows that on final-salary schemes, workers paid an average of 4.9 per cent and employers 15.6 per cent of the worker’s salary in the last year. For money purchase schemes, workers paid an average of 2.7 per cent and employers 6.5 per cent.

Many experts agree that workers should save at least 10% per cent of their total income to ensure an adequate income throughout retirement.

A spokesperson for Debt Advisers Direct said: “The findings highlight two important things: firstly, the need for workers to save adequately for their future, and secondly, the importance of being on the right pension scheme.

“The statistics show that final-salary schemes contribute over 20 per cent of the worker’s salary, whereas money purchase schemes contribute just over 9 per cent. It’s better than having no pension at all, but workers should consider whether a money purchase scheme will cover them fully for retirement.

“Most people do not usually associate retirement with debt, but in fact statistics show that increasing numbers of people are now retiring with debts to their name, or falling into debt because their pension doesn’t cover their outgoings.

“Our advice to people with debt problems is to seek expert debt advice as soon as possible, before they get too close to retirement age. There may a number of debt solutions that could help them clear their debts, and in general, the sooner they act, the more options they’ll have – as they approach retirement age, they may find they simply no longer have access to certain debt solutions.”

As long as the individual acts in time, a debt management plan or debt consolidationloan could simplify their finances and reduce their monthly outgoings by spreading out debt repayments over a longer period of time (although, in general, the longer the repayment terms, the more they are likely to pay in interest).

For people with debts of around £15,000 or more, an IVA (Individual Voluntary Arrangement) may be more suitable. An IVA is a legally-binding agreement between an individual and their creditors, in which they repay only what they can afford over a period of (normally) five years. Once the IVA is successfully completed, the remaining debt is written off.

Lasting for a specified time period, an IVA can be a particularly suitable debt solution for people approaching a deadline such as retirement. However, IVAs do represent a substantial financial commitment and can require homeowners to free up some equity. As with any debt solution, an IVA should never be entered into until the borrower has discussed all the alternatives – and the pros and cons of each – with a professional debt adviser.

Debtadvisersdirect.co.uk helps people with financial difficulties, providing free advice and tailor-made debt solutions.

Via EPR Network
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Career, Financial, Financial Education, Stocks, Trading

The High Energy Environment At The Junior Achievement Of Orange County’s 5th Annual Stock Market Challenge Gives Young Participants A Real World Understanding Of The Financial Markets

The Newport Beach Marriott will be transformed into Wall Street as Junior Achievement (JA) of Orange County hosts the 5th Annual Stock Market Challenge. This fast paced evening of trading excitement will help raise money for JA’s economic education programs and provide high school participants with a hands-on financial education.

Maria Hall-Brown from KOCE will be the emcee as high school students from Corona Del Mar, Newport Beach, and Santa Ana to learn about the stock market by being part of a competing stock trading team.

Vince Shorb, founder of the National Youth Financial Educators Council and a Junior Achievement Board of Directors member, states “With the recent volatility of our financial markets it is vitally important that today’s youth are empowered with a deeper understanding of how the stock market operates.”

Major supporters of JA’s Stock Market Challenge are Wescom Credit Union – Presenting Sponsor, Wells Fargo – Opening Bell Sponsor, 3M – Closing Bell Sponsor, Comerica – Dinner Sponsor, Sam’s Club – Media Sponsor, Grant Thornton, LLP – Marketing Sponsor, and Best Buy – Prize Sponsor. Some of the participating companies are: Citizen Business Bank, Deloitte & Touche, LLP, Irwin Union Bank, Mendoza Berger & Company LLP, Mullin TBG, Orange County Board of Education, ClearLight Partners, LLC, US Bank, and Washington Mutual, Bank of the West and Ross Equipment and Process Solutions Co.

JA Worldwide is the world’s largest organization dedicated to inspiring and preparing young people to succeed in a global economy. For more information on Junior Achievement programs contact Christine Shewbridge, President of JA of Orange County at (949) 515-1998. http://orangecounty.ja.org

The National Youth Financial Educators Council empowers today’s youth with real world financial education and entrepreneurship skills through edu-tainment products and events that are designed specifically for young adults. http://www.NYFEC.org

Via EPR Network
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Checking & Savings, College Finance, Financial, Financial Management, Financial Services, Financial Solutions, Insurance, Investment, Loans, Money, Personal Finance

New Research From LV= Reveals That Parents Spend A Staggering £233 Billion Supporting Their Adult Children

New research from insurance, pensions and investments group LV= reveals that parents spend a staggering £233 billion* on supporting their adult children (children aged 18 years or over), and are foregoing their own financial freedom to support their children.

The LV study, which was carried out amongst adults aged 40+ years who have children 18+ years, found that 94% of parents continue to contribute financially towards education and other major purchases such as houses and cars, plus living expenses, once their children have reached ‘adulthood’.

Over half of all parents surveyed (55%) admitted to helping their adult children with general living costs, indicating that the ‘credit crunch’ and rising living costs are impacting on the finances of adult children.

Nigel Snell, Communications Director at LV=, said: “Parents certainly like to financially contribute, if they can, towards large purchases for their adult children, such as weddings and deposits for first homes. However, it seems that the current economic climate is impacting on day-to-day finances. Parents are the hardest hit, with a large proportion admitting that they are helping to cover their children’s living expenses, as well as meeting their own financial commitments.”

One quarter (23%) of parents aged between 40 and 49 years still have children aged over 25 years old living with them, indicating that despite falling house prices, adult children are not in a hurry to leave the nest, and may not be able to afford to either.

According to the research, it is not just their own children that parents are paying for either. Of those parents with grandchildren, 79% reported supporting both their children and grandchildren.

Almost half of all parents aged 70 years or older (45%) are still helping their children financially. Despite generally being retired and living on a reduced income, 55% of these parents state that they help their children because they feel it is their responsibility as a parent, and 42% stated that they support their children ‘because they can afford to’.

In contrast, less than one third (29%) of the parents questioned said that they had received financial help from their own parents after they had left school. Now, 62% of parents say they help their adult children because ‘they need the assistance’ and 17% of parents say that their adult child actually asks them for financial support.

Nigel Snell concluded: “Our study shows that parents can no longer expect their children to pay their own way once they have flown the nest. More than ever it’s true to say that having children means signing up to a lifetime financial commitment.

“Many parents will have had to put some plans on hold to manage the costs associated with raising a family, and once their children are old enough, parents should begin to encourage their own children to make small provisions, so that the financial burden can be reduced and parents can enjoy more financial freedom in retirement.”

Via EPR Network
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Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, Loans, Money, Personal Finance

It`s Important Than Ever That Consumers Consider Their Options Before Taking Out Any New Credit, Say Debt Consolidation Experts Debtadvisersdirect.Co.Uk

Commenting on recent changes to the credit market, debt consolidation experts DebtAdvisersDirect.com reminded consumers in debt of the need to think carefully about the lending options open to them. In particular, they stressed the importance of calculating the long-term impact, not just the short-term appeal, of various types of credit on offer.

“As with any financial issue,” a DebtAdvisersDirect.co.uk spokesperson remarked, “it’s imperative to research the different options thoroughly before making any firm decisions. The pros and cons of each debt solution might not be immediately obvious, so it’s highly inadvisable for anyone to commit themselves without consulting an expert beforehand.”

In recent history, the availability of credit has led many to see debt consolidation loans as a good way of regaining control of their finances. However, the credit crunch has – by definition – restricted the number of ways in which consumers can consolidate their debts.

A recent press release by comparison site uSwitch provides some figures: over the last year, the overall amount issued in unsecured loans has dropped by £283 million per quarter, while gross credit card lending has grown by an average of £179 million per quarter.

“This is a disturbing trend,” the Debt Advisers Direct spokesperson continued. “People clearly need access to credit, whether they’re using it to consolidate their debts or to finance new projects and purchases. Yet the way in which they access that credit can make an enormous difference to their financial stability.

“One reason people turn to their credit cards is the sheer simplicity – rather than arranging a new loan, they can simply access the credit that’s already available on their credit card. However, the high interest rates that come with some cards can rapidly turn relatively small debts into much larger ones.

“At the same time, the low monthly repayments that most credit cards require (another factor which might add to the perceived desirability of borrowing in this way) can also have a dramatic impact on a borrower’s long-term finances – any online calculator can easily demonstrate the advantages of repaying a debt as fast as realistically possible, whether it’s a credit card debt, a debt consolidation loan, or any other kind of credit.”

In the uSwitch press release, Simeon Linstead, head of personal finance at uSwitch.com, stated “…it seems consumers are turning to credit card providers for extra cash. Whilst it’s good news that people can still access extra money if they need it, this is not a sustainable solution for the problem.”

For many, a professional debt consolidation loan would be a much more appropriate way to bring their finances in order. Often coming with much lower interest rates than credit cards, loans can also offer the peace of mind that comes with fixed monthly payments over a specified repayment term.

“Even in the midst of the credit crunch,” the Debt Advisers Direct spokesperson concluded, “debt consolidation loans are still very much available. Whatever their debt problems, many borrowers still stand a good chance of getting the debt consolidation loan they need – as long as they approach a lender who specialises in helping people in their situation.”

Via EPR Network
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