Tag Archives: recession

recession

Financial, Financial Services, Insurance, Insurance Services, Investment, Personal Finance, Retirement

As More Workers Are Hospitalised For Stress, ActiveQuote.com Suggests Investing In Income Protection Insurance

With rising numbers of people being admitted to hospital due to severe stress, experts are urging UK workers to invest in income protection insurance to protect themselves against the health implications of the economic crisis.

New figures from the Health and Social Care Information Centre (HCIS) show that nearly 6,400 people were hospitalised with stress in the 12 months to May 2012.

Not only is this a seven per cent rise on figures from the previous year, but it represents a staggering 47 per cent increase since 2007-8 when the economic crisis first hit.

As the HCIS figures do not take into account people who visited their GPs, Accident and Emergency or sought alternative practitioners’ advice, experts believe the actual figure could be much higher.

Dr Richard Theo, of income protection insurance comparison website ActiveQuote, said: “Stress is the single biggest cause of sickness in the UK, affecting one in five of the working population and causing the loss of 105 million working days each year.”

“But stress is not just a condition in itself; it is also a trigger for a range of other health conditions, from mental illness, depression and anxiety to high blood pressure and heart attacks.”

According to the statistics, those of working age are most likely to be hospitalised for stress. Depending on the severity of their condition, sufferers may be unable to return to their job for a prolonged period of time.

With government illness and disability benefit only paying out a maximum of £99.15 per week to eligible claimants, the financial implications of being out of work for a long period of time can be serious.

Dr Theo recommends UK workers consider investing in income protection. He explains: “An income protection policy is designed to replace your income if you cannot work due to a long-term illness such as severe stress.

“Rather than relying on your savings or government benefits, an income protection policy will pay you up to 70% of your income every month, with some plans even paying out up until retirement. This type of policy could provide much needed peace of mind during a recession.”

But Dr Theo warns that income protection insurance is unlikely to cover pre-existing conditions. He said: “People who are looking to protect their income against accident and sickness should compare income protection quotes as a pre-emptive step to safeguard their finances in the future.”

Via EPR Network
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Checking & Savings, Financial, Financial Information, Financial Management, Financial Services, Insurance, Investment, Money, Personal Finance

The Children’s Mutual Reports Kids Unaffected By Recession This Christmas

According to research by a leading Child Trust Fund (CTF) provider, The Children’s Mutual, children in the UK are set for a bumper Christmas this year, receiving £5 billion of presents. With generous friends and family set to spend 20% more than last year on youngsters, it seems the recession is not impacting kids’ stockings just yet.

The average UK child will receive £380 worth of presents this year, compared to £316 in 2008. In total, UK kids will have over £4 billion worth of toys and other presents underneath their trees, along with £960 million in cash, with each child receiving an average of £73. More than a quarter of lucky UK children will get £100 or more.

The Children’s Mutual is urging parents to take advantage of the generosity of friends and family this Christmas by asking them to invest in a present that could last a lifetime.

David White, Chief Executive of The Children’s Mutual, said: “It’s great news that the recession is not affecting kids’ stockings this Christmas. However we are urging parents to think about their children’s futures and ask friends and family to invest a portion of this money for the long-term.”

The Children’s Mutual also found that a lot of money is spent on presents that often don’t last for more than a couple of months.

David White continued: “Around £200 is spent on presents that won’t make it past Easter, but if this money was invested in a Child Trust Fund each year, it could be worth £6,100* by the time it matures when the child turns 18. This way friends and family can give a gift that could last well beyond the child’s 18th birthday and providing them with a nest egg for the future.”

According to figures from The Children’s Mutual, top ups into Child Trust Funds get a timely boost at Christmas with an average increase in ad hoc payments of just under 25% during the festive period.

Child Trust Funds are designed to provide a tax efficient, long term savings vehicle for all eligible children (born on or after 1 September 2002). Each newborn child receives a £250 Child Trust Fund voucher (£500 for low income families) from the Government when their parents register for Child Benefit. The Government will make a second contribution of £250 (£500 for low income families) when the child reaches seven and is considering a third in the child’s teenage years. Parents, family and friends can all then add to this account up to a maximum value of £1,200 each year.

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Banks, Checking & Savings, College Finance, Credit Cards, Financial, Financial Management, Financial Services, Financial Solutions, Insurance, Insurance Services, Loans, Money, Personal Finance, Security

Recession Raises Fear Of Identity Theft

New research from Lloyds TSB has revealed 76% of adults are currently worried about identity theft and 39% feel more at risk now than they did six months ago, with the recession playing a major contributing factor. The research was conducted September 2009 by ICM for Lloyds TSB amongst 1,000 UK adults aged 18+ years.

Over half (52%) of those concerned about ID theft believe that the recession has increased the risk as rising unemployment drives more people towards criminal activity and ID theft. Coupled with this, is the fear expressed by 57% of people that social networking sites have made it easier to steal personal details – a 10% increase on those with the same worries last year.

The study shows that as many as 38% of Brits have experienced ID fraud, with almost half of those (18%) having been victims personally. However, 57% of those surveyed admit that they have not done enough to protect themselves and 25% don’t know how.

According to CIFAS, the UK’s Fraud Prevention Service, it takes an estimated 48 man hours to repair the damage resulting from fraud, and the cost to victims is frequently as high as £8,000. Typically, it takes an average of 539 days for someone to discover that they’ve been a victim of ID theft and it is on the increase; latest CIFAS figures show that it increased by 15% in 2008.

To combat this growing trend, Lloyds TSB has launched its ID Aware prevention and advisory service to help protect customers and bring them peace of mind.

Lloyds TSB’s ID Aware product allows customers to stay on top of their credit status and safeguard their identity, providing credit monitoring services and an early warning system to alert the customer to any activity involving their account. In addition, customers benefit from access to their credit status and payment history in one easy-to-understand document showing all credit cards, mortgages and loans. Credit alerts to warn the customer in the event that someone has been checking their credit status or doing anything fraudulent that affects their credit score. And if the worst should happen, expert help is on-hand. ID Aware provides 24 hour access to an advisor who will take control and set everything back on track.

Jatin Patel, spokesperson for Lloyds TSB commented: “As technology improves, it gets easier and easier for criminals to steal our identities and during tough economic times the temptation becomes greater. Protecting ourselves by shredding documents and protecting passwords is a good start, but having someone else keep an eye on your ID offers extra peace of mind.”

Lloyds TSB is also offering help and guidance through the National Identity Fraud Prevention Week (NIFP) which Lloyds TSB has supported from its birth in 2005. The Group will be putting up posters and providing leaflets in branches detailing ways to spot potential fraud. The bank is also giving information on how customers can protect themselves by safeguarding documents and making it as difficult as possible for criminals to access personal information.

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Business, Financial, Financial Information, Financial Services, Insurance, Insurance Services, Money

How To Lower Your Insurance Premiums During the Recession

During a recession, such as we are currently experiencing, it is essential that all businesses should reduce their expenditure wherever possible. It is a simple fact to understand that when income falls, expenditure must also be reduced in order to balance the books. When businesses have completed their cost-cutting exercises in the obvious areas, such as payroll and suppliers, they look to make savings in the peripheral areas of expenditure- such as insurance.

All businesses are required to hold insurance cover to a greater or lesser extent, be it material damage, goods in transit or the legally unavoidable road risk cover and employers liability insurance. Staveley Head, one of the UK’s leading motor trade insurance providers, has some important advice for those looking to reduce their insurance premiums. A spokesman said “Many people will opt for policies which are cheaper because the additional benefits such as windscreen cover or a courtesy vehicle in the event of an accident have been excluded from the policy. This can prove a false economy as the reduction in premium will only be marginal, and those benefits can prove very worthwhile if and when needed. It is far more effective to look at areas we tend to take for granted. Many policyholders request any driver cover because once in a blue moon, due to illness or holidays perhaps, someone else will be required to drive their vehicle. This is a very costly way of covering that eventuality. It is far cheaper to name on the policy the drivers you think you may need, and even cheaper again if it is your spouse or partner.”

The Staveley Head representative went on to say “It is also worthwhile considering an additional voluntary excess on the policy, certainly for careful and claim-free drivers. If you divide the amount of the voluntary excess by the number of years since your last claim and compare that to the annual saving in premium it should give you an indication of the overall economy of increasing your excess. Keeping your vehicle overnight in a garage or secure compound or driveway will also reduce your premium. A low annual mileage will also produce a lower premium. The annual average is between ten and twelve thousand miles, but if you only cover five thousand miles a year tell your insurer. Less miles means less risk for your insurer and consequently less premium. There is a number of ways that premiums can be reduced without losing any benefit in cover, and Staveley Head will be delighted to assist and advise anyone if they contact us on our website at www.staveleyhead.co.uk or telephone us on 0845 017 9991.”

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Checking & Savings, Costs, Financial, Financial Information, Financial Services, Money, Personal Finance

Tooth Fairy Tightening Purse Strings As Recession Bites

The Children’s Mutual’s annual Tooth Fairy Index has revealed that the average cost of a child’s tooth has fallen six per cent from £1.22 to £1.15. The index shows that even the Tooth Fairy is having to fight the economic gloom, giving away £1.3* million less this year than last, as the credit crunch extends its clutches to the magic realm of Fairyland.

Tooth Fairy Index

In 2008, the Child Trust Fund provider’s Tooth Fairy Index found the average cost of a tooth had risen by an impressive 16% on the previous year. But 12 months on, the tooth market is showing signs of decay as parents resist the ‘fairy pressure’ reported in previous years, with 24% now happy to pay less than average, stating this helps their children understand the value of money.

David White, Chief Executive of The Children’s Mutual said: “The fall in the value of teeth provides the perfect opportunity for parents to talk to their child about the value of money and the impact of the credit crunch. Talking about the value of money in terms children can easily understand can help them appreciate the importance of saving.”

Encouragingly, 55% of all children save some or all of the money the tooth fairy leaves in exchange for their teeth. Children in the South West have the most bulging piggy banks as over three quarters (77%) are saving their tooth pennies, while those in Scotland are choosing to splash their cash, with 51% spending all the money the tooth fairy leaves under their pillow.

The Children’s Mutual’s Tooth Fairy Index reveals that attitudes towards the tooth fairy vary widely across the UK. Children in Northern Ireland benefit the most from the tooth fairy’s generosity, as one in 8 children (12.5%) receive £5 or more for each tooth that wobbles free, whereas 12% of children in the Midlands have a gap in their purses as well as their mouths as they are forgotten by the tooth fairy altogether.

The report also indicates that the tooth fairy herself has changed over the years. Traditionally, the tooth fairy has been known for leaving money, letters, and a sprinkling of fairy dust on her nightly rounds, though some parents recalled receiving an orange, toys or a book as a special treat from the tooth fairy. Their children in turn are now the recipients of mobile phone credit and magazines as the tooth fairy flies into the twenty-first century.

About The Childrens Mutual
The Children’s Mutual’s mission is to help parents, grandparents, family and friends fulfil their hopes for today’s children and secure their financial futures. The company specialises exclusively in family-focused finance products, and is currently the choice of 1 in 4 parents for Child Trust Funds.

The Children’s Mutual, as an expert in savings for children, made a significant contribution to the Government’s Child Trust Fund consultation process and is widely recognised by the business community and press as an industry expert on family finance. This expertise has led several financial institutions and family-focused high street retailers to choose The Children’s Mutual as their stakeholder Child Trust Fund partner.

A breakdown of the average amount of money left per tooth in each region of the UK is available upon request.

All research conducted by 72 Point who interviewed 2070 parents with children aged 5-15 in May 2009
* Average number of children aged 6-11(4.8m) losing 4 teeth per year x the average tooth fairy rate of £1.15 – average number of children = 4.8m x 4 teeth per year = 19.2m; 19.2m x 1.15 = £22.8m. Last year’s value = £23.4m – this year’s value of £22.08 = £1.32m

The Children’s Mutual has a large database of case studies available. David White, The Children’s Mutual Chief Executive, is available for interview. 

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Financial, Financial Information, Financial Services, Home Equity, IRA, Money, Personal Finance, Retirement

Recession Woes Grow For Pensioners

New Prudential Class of 2009 retirement survey reveals the UK’s deepening economic crisis will mean the 3.25 million UK adults who plan to retire in 2009 can expect to receive £2.87 billion* less in their pensions than those who planned to retire in 2008.

The survey found UK workers planning to draw their pension in 2009 expect to get an average income of£17,779 a year, £884 less than those retiring in 2008 who anticipated an average annual income of £18,663. Retirement will mean taking a £7,129 cut in income compared with the national average salary of £24,908** but some believe they will be considerably worse off.

The Prudential survey showed that 11% of people retiring in 2009 expect to receive an income of less than £10,000 a year from their pensions and investments, with 12% of women expecting to manage on this level of income compared to 9% of men.

While 39% said their pension and savings would give them a decent retirement income, 61% were doubtful that they would have enough money to enjoy a comfortable life in retirement. When asked if they thought they were financially well prepared for retirement, only 47% responded positively.

Keith Haggart, Director of Lifetime Mortgages at Prudential said: “The global economic recession is relentless and indiscriminate in its impact and it was only a matter of time before we began to see British pensioners bear the brunt.”

He continued, “Although the results of our survey make unsettling reading, there are ways for pensioners to maximise their incomes during these difficult times. Drawing on some or all of the assets saved throughout their working lives, including releasing value from property through equity release schemes, can boost annual incomes without having a detrimental impact on quality of life or forcing pensioners to downsize or embark on a fire sale of their possessions and assets.”

Keith urged anyone approaching retirement or who has recently retired to talk to a financial adviser to help them review all their assets and savings to see how they could be used to maximise income.

Prudential’s retirement planning website helps consumers and employers tackle retirement issues. The website features a Retirement Planner which has been designed to help determine how much income a customer’s current arrangements might give them in retirement, factoring in current pensions, property, savings and investments. The Planner also shows customers how they might be able to boost retirement income, if there is a gap between what their current arrangements will provide at the point of retirement and what they anticipate they may need.

* Office of National Statistics 2007 show 24,990,500 adults aged 45+ in the UK. Prudential research shows that 13% of UK adults aged 45+ (youngest age stated by individuals planning to retire in 2009) said they planned to retire in 2009 = 3,251,854 people. Multiplied by £884 individual shortfall = £2.87 billion.

** 2008 ASHE survey results show median weekly pay for full-time employees in UK grew by 4.6% in the year to April 2008 to reach £479 (multiplied by 52 weeks =£24,908).

Survey conducted online by Research Plus among 1,000 UK adults aged 45+, during 10–18 November 2008.

About Prudential
“Prudential” is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, pensions, savings and investment products. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

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LV=, the investment, pensions and insurance group, has revealed that the credit crunch, stock market volatility, and fears of a recession are growing concerns for the nation’s pre-retirement population

Six months after the LV= ‘State of Retirement’ report* first identified the rise of ‘FREDs’ – people approaching retirement who are Facing Retirement Earnings Doubts – new research shows that 69% of pre-retired people are now more concerned than ever about their financial security. This equates to 7.1m people**, an increase of 600,000 since the first LV= ‘State of Retirement’ report was published in May 2008***.

The rising cost of utility bills and food prices remains the biggest worry for people facing retirement, with 71% of those surveyed. However, this is marginally down on six months ago (76%), whereas worries regarding the credit crunch, stock market volatility, and fears of a recession are now all on the increase.

The credit crunch has become a concern in the last six months for an additional 2.1m pre-retired people, making a total of 4.2m. In addition, a further 1.8m people have become more anxious about a recession and a further 1.5m about stock market volatility, totalling 4.5m and 3.1m pre-retirees respectively. Over 50s are also more concerned about job insecurity. These three issues have increased in importance over the last six months, further contributing to the growing number of FREDs.

Despite the increase in those admitting to being more concerned about their financial situation in retirement, 20% are not saving anything towards their retirement, while 51% have not increased the amount they are saving. Of the 10% who have increased the amount they save each month, the average is £225 a month, £35 more than the average monthly amount from the survey six months ago.

Mike Rogers, LV= group chief executive, said: “In just six months the number of FREDs has increased, indicating that pre-retired people across the UK are more concerned than ever about their retirement finances. Unsurprisingly, the credit crunch, stock market volatility, and fears of a recession are now huge issues for these people, along with the perennial concern about the rising cost of living.”

The latest LV= report also shows that the number of people approaching retirement who haven’t taken any form of financial advice about retirement planning has increased to 60%, compared with 56% previously.

Mike Rogers continued: “The FREDs of this world have at least received some small comfort from the recent Pre-Budget Report, with the announcement of increases in both the state pension and pension credit. This goes some way towards bridging the gap between income expectation and reality in retirement, that our survey revealed is an issue for many people.”

All figures, unless otherwise stated, are from online Opinium Research

* Sample size was 1042 adults over the age of 50 years. Fieldwork undertaken 14th – 19th April 2008. ** The over 50s population in the UK is 21,011,000 (Source: Population projections by ONS, 2008). According to the research, 49% of those people are not retired. The research also shows that 69% (7.1m people) agreed they have become more concerned lately about retirement finances. *** Sample size – 1655 adults over the age of 50 years. Fieldwork undertaken 3rd – 9th April 2008.

About LV= LV= is a registered trade mark of Liverpool Victoria Friendly Society Limited (LVFS) and a trading style of the Liverpool Victoria group of companies. LV= employs more than 3,500 people, serves more than 2.5 million customers and members, and manages around £8 billion on their behalf. LV= is also the UK’s largest friendly society (Association of Friendly Societies Key Statistics 2008. Total net assets) and a leading mutual financial services provider. LVFS is authorised and regulated by the Financial Services Authority register number 110035. LVFS is a member of the ABI, AMI, AFS and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.

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Banks, Financial, Financial Services, Financial Solutions, Interest Rate, Loans, Money, Mortgage, Personal Finance

Think Money have welcomed the Bank of England’s shock base rate cut to 3%, commenting that the mortgage market could benefit as a result

Following the Bank of England’s shock base rate cut to 3%, financial solutions company Think Money have welcomed the news, commenting that firm action is more likely to encourage banks to consider cutting their interest rates accordingly. However, they added, there are still some factors that may prevent lenders from passing on the full 1.5% cut to their mortgages and loans.

The base rate cut, from 4.5% to 3%, is the biggest cut since the Bank of England lowered the rate by 2% in 1981. The base rate now stands at its lowest point since 1955.

Many economists had predicted an aggressive cut in base rates, but the extent of the cut was still unexpected. Most predictions in the run-up to the Bank of England’s announcement pointed towards a 0.75% or 1% base rate cut – and only a few days previously, 0.5% seemed a more realistic figure.

A spokesperson for financial solutions company Think Money said: “It would seem that the Bank of England are acting based on Mervyn King’s recent statements that the recession would be long and drawn-out, and rather than take the base rate down in small increments, they have ‘bitten the bullet’ and taken it down further than most people expected.

“Potentially, it’s very good news for people and businesses looking for loans, but not such good news for savers.”

However, the spokesperson stressed that as with previous base rate cuts, there is no guarantee that lenders will pass the full cut onto their mortgages and loans – although the extent of the cut could at least increase the impact on lenders’ behaviour.

“There will still be a lot of uncertainty with regards to what will happen in the economy in the future, as well as some apprehension amongst banks as to how much they might lose from things like defaults on mortgages as the recession takes hold,” she said.

“The base rate cut only affects how cheaply lenders can borrow funds from the Bank of England. It does not directly affect the LIBOR rate, which is the measure of how expensive inter-bank lending is. Since lenders rely heavily on borrowing from each other to fund their loans and mortgages, they may well be slow to bring their rates down.

“That said, the Bank of England will have no doubt had this in mind when deciding on their base rate cut – and it may well be that such a large cut is sufficient to encourage some lenders to bring their rates down to more competitive levels.”

However, a number of banks appeared to take defensive action even before the 3% base rate had been announced, with several lenders removing tracker mortgages from their product ranges on Wednesday and Thursday morning, while others upped their interest rate margins on tracker mortgages.

“This may just be a temporary measure by lenders in order to avoid any risks in the short term,” the Think Money spokesperson said. “A number lenders have said they will be taking some time to think about their next step, so it’s possible that we will still see some significant interest rate cuts in the next week or two.”

The spokesperson was also keen to emphasise the importance of good mortgage advice. “With so much uncertainty surrounding what will happen with mortgage rates in the next few months, it often pays to speak to a mortgage adviser who understands the market. They should be able to point you towards the best mortgage deals for your circumstances, which could save you a lot of money in the long run.”

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Debt Problems Can Affect People From All Age Groups And Should Always Be Taken Seriously

Following a study suggesting that the 18-34 age group are most at risk from the credit crunch, with many carrying significant debts, financial solutions company Think Money have advised people in this age group to take extra care with their finances as the prospect of a recession looms.

Furthermore, they added that debt problems are just as serious for people of any age, and should always be addressed as soon as they start.

The study, carried out by think tank Reform and the Chartered Insurance Institute, claimed that many 18 to 34-year-olds had so far experienced a “uniquely gilded life” which had given them a “false sense of security”.

As a result, they have “run up huge credit card bills, smashed their piggy banks and are now staring at a broken housing ladder”, the report claims.

The report dubs the age group the “IPOD (Insecure, Pressurised, Over-taxed and Debt-Ridden) generation”, and claims that one in five such people carry debts of £10,000 or more, while one in three have no savings.

The overall situation leaves the IPOD generation particularly vulnerable to the current state of the economy, with the report stating that they “have the raw skills to understand their position and the dawning sense of responsibility to do something about it (…) However they are hamstrung by a financial establishment determined to service the old and patronise the young.”

A spokesperson for Think Money said: “It may well be the case that many of the large numbers of younger people getting into debt do so because of a diminished sense of responsibility, brought on by comfortable living conditions and, until recently, relatively easy access to credit.

“But with the credit crunch ongoing and a recession becoming a very real possibility, a lot of younger people may be about to experience the kind of struggles that instilled an “instinctive fear”, as the report puts it, into people from previous generations.

“Whatever the reason, in the current economic climate, it’s more important than ever for people to tackle their debts now. Especially with high-APR debts such as credit cards, it’s essential that those debts aren’t allowed to grow.

“There are a number of debt solutions designed to help people in different financial situations.

“For people with a number of smaller debts, a debt consolidation loan could help. A debt consolidation loan involves taking out a new loan to pay off all your existing debts, meaning you only have to repay one creditor instead of many. The interest rate is often smaller than your original debts, especially if you are paying off high-APR debts such as credit cards – although if you choose to lower your monthly payments by spreading them out over a longer period, this will incur more interest which could cancel out the benefit of a lower overall rate of interest.

“If you have a number of debts that you are struggling to repay, a debt management plan might be a better option. This involves speaking to a debt adviser, who will discuss your financial situation in confidence, and will then negotiate with your creditors to agree repayments based on how much you can afford each month. In many cases, interest and other charges can be frozen, reducing the total amount you have to pay.

“If you have more serious debts of over £15,000, an IVA (Individual Voluntary Arrangement) could get you debt-free in five years. An IVA involves making regular monthly payments to your creditors based on the amount you can afford to repay, and after the five-year period your remaining debt will be considered settled.

“However, be aware that an IVA requires approval from creditors holding a total of at least 75% of your debts before it can go ahead, and you may be required to withdraw some of the equity in your home in the fourth year of your IVA.

“Debt affects people of all ages, so we urge anybody struggling with debt to seek expert debt advice as soon as possible.”

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