01/03/2014 Your Money


01/03/2014

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Before that, we have this week's Your Money.

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This is Your Money, your weekly guide to making the most of your

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cash here every weekend on BBC News television available all week on the

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BBC iPlayer. More and more people are seeking

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help for problems with payday loans. What alternatives are out there?

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Peter tut ton from the debt charity StepChange has the answer for us in

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a moment. In recent weeks and months, the talk in most of the

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media's been about the return of a bouyant housing market. For some

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parts of the country, the property picture looks bleak with nearly half

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a million homes stuck in negative equity. As we approach the end of

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the tax year, we look at common mistakes people make with savings

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and investments. We have tips for how to avoid them.

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There's been a big rise in the number of the people struggling with

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payday loans. The step change debt charity says nearly 67,000 people

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asked for its advice last year. Up over 80% on the year before. The

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average client who asked for help had an overall debt of over ?1700

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spread across three payday loans. But what are the alternatives? Peter

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from StepChange debt charity joins me now. Peter, there's been a rise

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of people getting into duct. Why are we seeing this rise? Why are there

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more people finding themselves in this sort of trouble? A third more

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people contacted our helpline service, in particular a rise in

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payday loans. It is because times are still very hard. Household

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incomes have been hit hard over a long peered. People are struggling

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to make ends meet. People are struggling with basic things, paying

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the rent and fuel bills. People are using credit to fill that gap.

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Problem is, if you're using a payday loan, a short repayment peered, you

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create a bigger gap next month. You get into the cycle of having to use

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more and more credit to make ends meet and you fall over badly. I

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imagine people going to payday lenders have exhausted what they can

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with banks. What other credible alternatives are out there? A lot of

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the people we see will have a lot of outstanding credit with mainstream

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lenders like banks. The first thing they are exhausting with the banks

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is if you are using a payday loan because you can't get credit from

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the banks but are making payments to other credit, first thing to do is

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ask for help. Rather than think, get more credit, ask for help from your

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lenders, get some advice. We would expect lenders to be showing people

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in hardship may need to pay less for a period of time until they get back

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on their feet. It may be credit but utility providers and landlords.

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Credit is not the answer to financial difficulties. If credit

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can help you. Before taking it, you think, can I afford to make it pay

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it back? If you can pay it back there are other things like credit

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unions. They are still patchy but there's a lot of work going on.

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Local authorities are working to try to get more provision. Do shopping

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around. You may be able to get a cheaper loan. Look at a loan that

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takes longer to pay back. Less pressure on your next month's

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finances. When people call your charity, what do you offer them? The

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first thing is we reassure people there is a way out of debt. It looks

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like a nightmare but people can get out. We help people budge he and

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prioritise what's important. We find people are not able to pay for food

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because she are paying credit agreements. Firstly, make sure you

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can pay for your essentials. We help negotiate with creditors,

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affordable, sustainable solutions. Other solutions. We can help with

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things like bankruptcy and things like that. There are a range of

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options out there rather than using credit you cannot afford. Get some

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advice if you're struggling. Peter, thank you.

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It will cost you more to post a letter from the end of the month.

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Royal Mail's announced price inceases. The price of a first`class

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stamp will increase by 2p. A second class stamp goes up 3p. If you want

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to send a large letter, that anything up to 100 g, you'll have to

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pay 3p more. Or second class is a rise of 4p. These prices kick in on

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31st March of the In spite of what you're told, many

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parts of the UK are not experiencing record house prices. Nearly half a

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million households in the UK are still in negative equity meaning

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their homes are worth less than their mortgages. That can make it

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impossible for such people to sell up and move on. Overall, 8% of

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borrowers are in that situation. In are parts of the country where house

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prices are falling, the problem appears to have got a lot worse.

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Brian Milligan's been finding out. In many parts of the UK, whole

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communities have been left behind by the house price recovery elsewhere.

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Take this street in West Yorkshire where many houses are still worth

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less than their owners' borrowed to buy them. This one is worth 75,000

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but the mortgage is for ?95,000 to sell it, the owner would have to pay

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the ?20,000 different back to the Bank. I'm paying ?250 per month

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extra on top which is barely affordable. They new that full well

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when I was negotiating with the bank at the time. But it is the stress

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involved, really. A negative equity map of the UK shows a country of

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huge housing contrasts. While London has just 1% of borrowers in negative

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equity. In Northern Ireland, 41% of mortgages are affected. In the north

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of England 16% of borrowers owe more than their homes are worth. A

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situation that's got worse in the last six in months. You are finding

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there's still a lot of people with negative equity? Like others, this

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Tyneside lettings agent has seen a boom in business from those in

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negative equity. Those who cannot sell try to rent their homes

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instead. Some find banks and building societies unsympathetic. If

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you're in negative equity, I do feel sorry. It may be a decision that's

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out of your control. You're not able to sell your properties because

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you're left with that deficit of ?20,000 which I'm sure the bangs and

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mortgage lenders will want repaying. Negative equity is only really a

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problem if you have to sell. Some lenders say they will transfer a

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mortgage in negative equity to a new home if you have a per ninety job

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and can pay extra. The advice is ask. They may allow you to take the

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mortgage with you and take that loan that you owe to the next property.

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It is not disastrous if that happens. Talk to your lender as

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early as possible. Most of the 463,000 borrowers in negative equity

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remain stuck until their houses go up in value. Some with blighted

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homes across the north are being told that could take another five

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years. The big six energy firms have been

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told to hand back over ?400 million back to customers. Credit left in

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customer accounts when people move or switch suppliers has accumulated

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over the past six years. It is estimated 300 million people are

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affected. It is investigating whether the return of money to

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customers complies with existing rooms.

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Enable married couples and civil partners to determine how their

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property is shared if their relationships breakdown. Couples can

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make pre`nup actuals but courts don't always uphold them.

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Some tenants are being ripped off by rogue let he is agents who take

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thousands of pounds as holding depot its, refuse to let them move in and

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pocket the cash. Around 500 cases have been reported to Trading

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Standards authorities in the last couple of years but Shelter say this

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is just the tip of the iceberg. Fed up with high mobile phone bills?

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They could become a thing of the past. WhatsApp, being bought by

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Facebook for ?12 million say it will add a voice calling function. It

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wants its app to be on every phone in the world.

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The end of the tax year is almost here. But have you made the most of

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this year's allowance? In the rush to allocate your cash it is always

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East why I to fall foul of mistakes which could cost you dearly.

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Tomorrow Stevens joins us now. Tom, why do people leave it to the last

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minute? That is one of the key mistakes people make at this time of

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year. They leave their ISA allowance to the last minute. It is great we

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are talking about savings now but people should be thinking about

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savings all the way through the tax year and not just right at the end

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which is when they are more likely to make a mistakes. Do you think

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this is the biggest mistake people make every year? It is a key

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mistake. Others are people tend to hide in the perceived safety of

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cash. That's a mistake at the moment because cash rates on ISAs are

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extremely low and in fact, below the rate of inflation. You're losing

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money over time by doing that. The third mistake is people put all

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their eggs in one basket. A lot of our viewers are quite risk averse.

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They are happiest in cash. What would you say to them? There things

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you can do which are not as safe as cash. So you do need to take a

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slightly higher risk by going into the stock market. But you can spread

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your money around in what's called a multi`as set fund. It spreads your

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money between shares, bonds, property and cash. By doing that,

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you reduce your risk but open yourself up to the better returns

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you can get from these assets than pureeing cash. `` pure cash of the

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Many of our viewers will not have taken up their whole allowance. What

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can they do at this late stage? Investigate the idea of starting a

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monthly savings plan. If you put your money all in at one go you risk

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getting in at a bad time in the marketment if you drip your money in

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across the year, once a month put the same amount in. You will smooth

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your returns. You will ensure you invest at the bottom of the market

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as well as at the top. You put yourself in good regular savings

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habits. Your advice, get a plan basically, and have it lined up in

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advance? Yes. Easier said than done? It is extremely easy to do. You can

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save from as little as ?50 per month and once you've done it, set it up,

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you can forget about it. Tom Stevenson from Fidelity, thank you.

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The message is have a plan. And get started. Thank you. That's all from

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Your Money for this week. News, tips, information on savings,

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borrowing, pensions, any time you like online.

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You can get updates by following our feed on Twitter.

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We are back next week. Goodbye for now.

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