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A million families are struggling to pay off their mortgages, according to the Bank of England.

A survey from the bank also revealed another 1.8 million people who said they have hit problems ‘at least occasionally’.

A global credit squeeze is expected to make things worse as banks tighten their lending practices, while higher interest rates have increased families’ mortgage repayments by £3.6 billion in the last year.

Property sales and the economy are expected to downturn, with experts warning more homes are heading for debt, causing record insolvencies over the next two years.

The survey, published in the Bank’s quarterly bulletin, also said one in ten people are having to take on a second job or work overtime to meet increased mortgage repayments. Around half of families faced with higher payments are cutting spending and another one in ten have borrowed more or extend mortgages.

The Bank’s poll was carried out in September, when the global financial crisis was first developing, meaning the current situation is worse than the survey suggests. A few homeowners are particularly badly hit as some lenders have not passed on the quarter-point interest rate cut announced by the Bank earlier this month.

The survey also discovered those who are renting are having much more trouble repaying debts than people with mortgages, usually because they are paid less.

Some economic experts say although the slowdown may appear dramatic, the basics of the economy remain sound and talk of a recession is exaggerated.

Banks are increasingly using ‘aggressive tactics’ to get people to borrow more than they can afford, say consumer advisors.

The Citizens Advice Bureau (CAB) says it is getting increasing complaints about banks using schemes to prey on people in debt.

BBC reporters have also found consumers who have an agreed repayment plan with a debt advice charity being pressured to take out expensive loans to solve their debts. 

Banks have been found to be repeatedly telephoning some customers to try to get them to take out costly loans, going against the advice of debt charities.

One HSBC customer said even after he rejected the bank’s offer of a ‘managed loan’, they had continually telephoned him in an effort to make him change his mind. The managed loan’s interest rate turned out to be13% - twice what he is currently paying.

The customer added he has had multiple letters from HSBC saying they want to help people in financial difficulty ‘when clearly they don’t’. HSBC agreed the amount he can repay each month is acceptable. But said the only way they will accept that repayment is if he signs up for a ‘managed loan’.

HSBC replied, saying: “As a responsible lender HSBC only offers a managed loan to customers when all other lending options have been exhausted.”

The CAB said in some cases where people had asked their bank to deal with a debt advice charity they were still receiving calls and aggressive letters.

The British Bankers’ Association (BBA), said banks were happy to work with debt advice charities. However, the CAB said it generally found that, even after it got involved, customers still got pushy calls and aggressive letters from lenders.

A spokesman for the BBA added the work banks do with middlemen like money advice trusts are essentially negotiations.

Families are now nearly twice as in debt as they were just seven years ago, according to accounts PricewaterhouseCoopers. They recently said the average Briton now owes £33,000, compared with £17,000 in 2000.

Experts put this rise on soaring property prices and bigger mortgage repayments, and say tough times are ahead thanks to a global credit squeeze.

Lottery bosses are turning their attention to the 2012 Olympics after funding from the game helped the UK succeed in Beijing.

Sound investment has been hailed as the key to Team GB’s success in the far east, with the squad landing fourth place in the overall medals table.

Cash from the National Lottery played a crucial role, with licence holders Camelot dishing out millions to sports groups.

Officials at the company are now looking to London 2012 and hope to provide enough funding to ensure the UK pulls off a great games.

Out of the official budget of £9.3 billion to run the event, the National Lottery must raise £2.2 billion.

Camelot chief executive Dianne Thompson, quoted by the Daily Telegraph, said the success and coverage of GB and its funding had been “fantastic”.

According to the paper, Ms Thompson first helped to supply British rowers with cash six years ago after hearing Sir Matthew Pinsent appeal for funding over the radio.

Specially designated scratch cards, instant win games via the web and other techniques have been drawn up to help the Lottery drum up enough cash for the 2012 games.

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Mid-level mobile phones are set to become far less popular with consumers as more advanced devices enter the market, according to research.

ABI research says just 441 million mid-market phones will be bought in in 2013, compared to 854 million in 2007.

The company has labelled such devices ‘enhanced’ phones as they have some features beyond voice calling but not the capabilities of smartphones.

Kevin Burden, director of mobile devices at ABI, said: “The mid-tier phones, which are the largest [segment] now, will be squeezed over next five to six years.”

In 2007, mid-level phones involved 74 per cent of all units sold, while low-end phones represented 16 per cent and smartphones 10 per cent.

In 2013, ABI says mid-tier phones are expected to account for 23 per cent, with low-end phones reaching 46 per cent and smartphones 31 per cent.

More advanced phones are expected to prove popular as they run on ‘open’ operating systems which allow users to download add-on applications to access more services.

Many mid-market phones run on ‘closed’ software, which does not facilitate add-ons.

Nokia is among a number of mobile phone companies reportedly planning to focus their efforts on low-end and high-end phones, as opposed to spreading development across all areas of the market.

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Mobile device company Nokia has revealed its profits have fallen 61 per cent in the second quarter of 2008, while its sales posted a four per cent growth.

The Finnish firm’s share price climbed around six per cent after it released the figures, which also showed it now sells about 40 per cent of all handsets worldwide.

Experts at the company also said they expect the handset market to continue growing and expand by some ten per cent in the next year.

Chief executive Olli-Pekka Kallasvuo said the last three months showed “strong underlying profitability”, adding he was “optimistic” for the rest of the year regarding sales.

Kallasvuo also said Nokia believed “devices linked with services” will drive “the next wave of growth.”

Other statistics from the firm show the average selling prices of its phones are coming down, with the typical device going for 74 Euros (£58.95).

The Asia-Pacific market remains the area of highest sales for Nokia, with 36.4 million units sold. The group sold 27.1 million units in Europe, 17.6 million units in China and 21.1 million units in the Middle East and Africa,

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It is estimated that uninsured drivers are costing over £500m a year, according to the Motor Insurers’Bureau, which pays compensation to the victims of uninsured drivers involved in accidents.

And the cost of the compensation, the bureau claims, is adding in the region of £30 extra onto the insurance premium of every legally insured motorist.

Recent figures now reveal that the UK has one of the highest levels of uninsured drivers in western Europe, with a staggering one in 20 cars and vans on British roads now being used illegally, without motor insurance.

The growing problem has recently been highlighted by the British Brokers’ Association (BIBA), who have approached the government requesting that more awareness is brought to the obvious dangers of driving whilst uninsured, and requesting the government bring greater enforcement to tackling the unacceptable situation.

Commenting that the government had been dragging its feet in dealing with the current blight of uninsured motorists, BIBA Chief Executive Eric Galbraith said that new regulations are urgently needed in order to resolve the problem.

Towards this end, BIBA will be calling on Transport Minister, Ruth Kelly, to urge the transport department to push forward regulations to address the unsatisfactory trend at the earliest opportunity.
Only recently the government had already introduced laws giving the police access to the national motor insurance database, and the right to seize any uninsured vehicles and even crush them.

It’s estimated that since the introduction of the new powers in 2006, uninsured driving has been reduced by around 10%. But BIBA would like to see the figures reduced even more substantially.

Increased risk taking may also be one more effect of the recent credit crunch, which has seen ever greater numbers of consumers struggling with the repayments on secured loans and homeowner loans, as a combination of increased interest rates, more restrictive lending criteria and the withdrawal of many former financial products, which until very recently were readily and abundantly available.

Apart from increased mortgage payments and higher interest charges on secured and homeowner loans, consumers have also been hit with a raft of price rises in other sectors, with overall living costs being further stretched by rising prices in fuel, utility bills and even food.

As a result there has been a massive increase in the numbers of consumers and business organisations seeking debt relief solutions, including bankruptcy, Debt Management Plans (DMPs) and Individual Voluntary Agreements (IVAs).

Recent reports from the UK Insolvency Helpline, which gives free financial advice to consumers and businesses concerned about debt levels, confirm that the number of applications for IVAs increased at a rate of 118% in 2006, and that the insolvencies in 2007 rose to 150,000, with the prediction that, for the first time ever, more of these insolvencies will be serviced by IVAs than bankruptcies.

The IVA is a formulated repayment plan, typically over a period of five years, which allows a debtor to negotiate an agreement with creditors to reduce some of the outstanding money owed by pledging to pay regular monthly payments. The increasing popularity of the IVA to consumers is largely based on the fact that they avoid the stigma associated with bankruptcy and often allow the debtor to retain assets, including a business or a home.

The alternative DMP is similarly constructed, but it is a programme by which affordable payments are negotiated with creditors by an independent company. Once an agreed monthly figure has been reached, this amount is then sent by the debtor to the debt management company, who pass it on directly to the creditor.

The UK Insolvency Helpline was set up in 1997, following recommendations from a national group of Insolvency lawyers and accountants, with a remit to supply an urgent need for debt and credit advice to consumers generally.

Trying to save money wherever you can is important to us all. Car insurance should be no different. Do not assume that your agent knows everything about you and your vehicle.

Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

More UK homeowners are taking advantage of equity release to boost disposable incomes, according to financial services experts.

Mark Gettinby, of Help the Aged subsidiary intune group, said more and more people were also using the products to repay mortgages and credit card debts.

However, he warned people interested in equity release should always seek advice before taking it up.

He said: “It‘s true there is a general lack of understanding of equity release with the general public.
“As equity release is a major financial decision we would always encourage the public to seek independent advice from a specialist before proceeding.”

Dean Mirfin, business development director at Key Retirement Solutions, also said recently that retired homeowners should talk to advisers to ensure they do not end up paying too much for equity release plans.

He added providers looking for sales are unlikely to always point retirees in the direction of the best deals.

A massive £9 billion will move in credit card balance transfers in 2008, research says.

An Abbey survey of over 1,000 adults found around three million British credit card users are planning to switch plastic provider.

The average balance transfer will be £2,666 in the first three months of 2008 with about 7.5 per cent of customers saying they will be taking advantage of a transfer deal.

On average, men are more likely to transfer around twice the balances of women -£3,395, compared with £1,820 for women.

Those living in the Midlands and south-east of England will transfer far more than those in the north at £3,021 and £2,900 respectively, whereas those in northern England will shift about £2,501. In Scotland the figure is £2,154, and £2,022 in Wales and the south-west.

Roger Lovering, Abbey credit cards MD, said: “It’s great to see many people are already turning their attention to getting their finances in order. January credit card bills can often catch people by surprise, so we would encourage people to keep a check on their finances and plan ahead to ensure they aren’t paying over the odds for their plastic.”

2008 is expected to be a busy year for credit card holders and companies with 2.6 million Brits planning to switch plastic provider.

However, about 6.6 million will be sticking with their current cards, paying an average of 16.82 per cent interest, according to figures from MoneyExpert.com.

Many are being put off by stories of credit card rejections rising as the credit crunch bites, experts say.

January is expected to be one of the most hectic months with seven per cent of all credit card customers switching, although people are being urged to use interest-free periods as a chance to pay off debts, not enlarge them.

Sean Gardner, CE of MoneyExpert, said: “Credit card companies can expect a busy transfer season in January as millions of us wake up to the cost of Christmas before the New Year financial hangover sets in.

“It’s good to hear people are taking action but worrying that millions will simply add their Christmas debt to their existing debt. Piling debt on debt is simply adding to the spiral of increasing financial trouble.

“People should be taking action to get their debt under control and the first step towards that is to cut borrowing costs. The next important step is then of course to pay the debt off but transferring a balance is at least a start.”

Anyone looking to switch to a zero per cent credit card deal is being urged to watch out for balance transfer fees – which at three per cent could cost £60 on a £2,000 debt.

The longest interest free periods on offer now are 15 months with Egg and Virgin Money – although nearly three-quarters of all credit cards offer some sort of transfer deal.

Card customers aged between 25 and 34 are the most likely to switch credit cards in January, and 15 per cent of customers in Scotland plan to do the same – compared with just six per cent in London and seven per cent in the south-east.