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.

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.

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.

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.

Many banks and building societies offer high initial rates of interest on savings, running for about a year, before they drop way below the base rate set by the Bank of England.

Nationwide is now calling on all savings providers to tell customers when their accounts’ rates will dip, and is also encouraging them to notify customers of other deals available.

The building society claims its rivals are taking advantage of consumer apathy, meaning people fail to properly watch the return they get on savings.

Matthew Carter, director for savings at Nationwide, said: “The savings market is highly competitive and some providers seem more interested in boosting profit and achieving best buy status than actually offering long-term good value.

“Consumers are told when their mortgage deals are due to change and it shouldn’t be any different for savers. With introductory deals becoming more common, we’re concerned it is becoming even harder for savers to make the best decision.”

Lisa Taylor, of personal finance firm Moneyfacts.co.uk, advised savers to think about accounts with steady rates of interest, rather than jumping between promotional deals.

She said: “Often a simple no-strings account offers an equally good return, without the need to jump through hoops or navigate a maze of complex terms and conditions.

“With such a fast-changing market, unless you are prepared to move your savings on a very regular basis, a consistently performing account will offer a good return, without the time and effort of constantly searching the market.”

Following December’s interest rate cut, savers have seen rates reduced – but by more than the 0.25 percentage points knocked off the base rate.

Ms Taylor added: “Some savers have seen their rates axed by more than double the base rate cut. With many of the accounts already offering uncompetitive rates, the proportion of the rate shaved off is much higher.”

Lenders cutting savings rates include The Halifax, Alliance & Leicester, Abbey, HSBC, Halifax, Lloyds TSB, NatWest, and the Royal Bank of Scotland.

Ms Taylor also said: “Too many savers are keeping their hard earned savings in accounts which will in the long term see their savings fall in value. It’s just another example of when loyalty does not pay.”

The Home Builders Federation (HBF) said the new scheme will raise issues such as energy efficiency levels and insulation.

John Slaughter, the federation’s external affairs director, said: “I think we have to assume the certificate will have some influence on perceptions of purchases. “Obviously, if you go back to the point about hiking energy prices at the moment, then people will always take more notice of those things in that climate.”

He also said the certificate had benefits as it will “actually raise awareness of the benefits of good levels of energy efficiency and insulation would – not just in terms of running costs but in comfort of the house.”

The government is trying to encourage greener homes through its ”Building a Greener Future” policy, offering stamp duty exemptions for carbon-neutral homes.

People with outgoings such as annual car insurance payments or quarterly bills could find it useful to work out 12-month plans, the Consumer Credit Counselling Service said.

Frances Walker, spokesman for the service, said people need to sit down and do a budget, saying: “You need to do a yearly budget and divide it by 12 so you take account of everything and it’s also a good time to look at income maximisation.”

She added people paying over 20 per cent of their income towards monthly repayments are overextending themselves.

Britons are currently carrying a total of £1.4 billion in debt, according to Credit Action figures.

People should pay close attention to the tier size loans falls into, claim product research firm Defaqto

Higher interest rates tend to be placed on lower tiers, the firm said, adding people may end up paying more for a lower sum of money, especially when loan providers have two tiers in the range of £1,000 to £5,000.

 Defaqto principal banking consultant David Black said: “Borrowers should take care when choosing the size of loan they want, as a little effort in researching the interest rates charged on different tier levels could save them a considerable amount of money.”

Taking out a bigger loan may mean paying it off over a longer period, but the savings could reach £1,000.

Defaqto advised consumers to “be on their toes” when loan hunting, as a large tier rate may not always mean uncompetitive rates.

Consumers can often get better deals by switching credit cards rather than sticking to their original one, Defaqto research also recently said, causing them to claim “credit cards reward disloyalty.”