Children bail their parents out of debt

A study by Scottish Widows has shown that in 6.85% of households, parents have been helped out financially by their children. In most cases, the money has been used to pay off outstanding debt.

However, in the majority of households it is still parents who help their children out with cash-flow shortfalls and financial troubles. Further, one of the side effects of the UK property market boom has been that is has become exceptionally hard for first-time-buyers to get onto the property ladder. A trend of the last few years has been that parents are providing part of the deposit their children need to get a mortgage.

If you are looking for a way to save money, download our free mobile phone budgeting tool: Moneybasics Spendometer. This tool will allow you to set your own personalised budget categories and even has a special function that means you can avoid getting out your phone and logging in your spending whenever you go to the bar on a night-out.

Please read on for a summary of the key personal finances news stories for the week beginning April 28th 2008.

Monday 28th April

Repossessions warning – The Centre for Economics and Business Research (CEBR), a leading economics consultancy, expects repossessions to total 33,400 by the end of 2008 – a 23% rise on the number of repossessions in 2007. However, this is lower than the Council of Mortgage Lenders (CML) prediction of 45,000, made last year, and brings into question of the claims of economic catastrophe that some doomsayers have suggested will come.

Wednesday 30th April

New Credit Action debt statistics –The total personal debt in the UK, at the end of March, rose to £1.43trillion. Sounds ridiculous? It is. And it is because we have £1.2trillion secured on our homes and £230billion in other lending. If you include mortgages, the average household has debt to the tune of £57,420. Click here for more on the latest debt stats for the UK.

While it is becoming harder for those with a damaged credit history to get access to credit, if you are thinking of applying for a credit card to help you with online purchases or to meet a temporary cash-flow issue, make sure that you try using our Cash Flow Worksheet to help you find the right card.

It is important to remember that for many of us, avoiding having a credit card at all is in our interest. Most of us find it easier to spend money that is not ours when you have access to it through a credit card. If you struggle with this, why not just cut your card up?

Friday 2nd May

Over 25,000 personal insolvencies (Jan-Mar 2008)–In the first three months of 2008, there were 25,264 personal insolvencies in England and Wales according to the Insolvency Service. Although this is a slight rise on the last three months of 2007 (Oct-Dec), it is in fact a fall, of 13.2%, on the figures from a year ago (Jan-Mar 2007) – this comparison is usually considered more accurate as it takes into account seasonal variations.

Are you worried about not being able to meet your day-to-day living expenses? Worried by the idea of insolvency or bankruptcy? By acting now and putting in a little work, you can go through a little short-term pain and toil for some much needed long-term peace. Get on to and start taking hold of your financial future now.

Prepared for Moneybasics by Jason Taylor, Advocacy Officer (Credit Action).