Why Payday Loan is Flawed?

As the name suggests, payday loans are known as short-term loans. The amount range varies from 100 to 1000 pounds. A payday loan which is also known as the predatory loans, as it has a bad reputation of charging high-interest rate for the short-term immediate credit.  A payday loan is totally based on the earning of the borrower. 

Whenever a borrower has applied for this loan, he/ she has to provide a paystub where they have to mention their current income. Also, to regulate the high-interest rate, lots of laws have been put in place over the years. 

According to Martin Lewis, founder of the MSE, a payday loan is a scammed concept. Many peoples claimed that these lenders give instant cash at 5000% APR loan to drunk people. Also, they signed an agreement that the cash can be directly taken from the person’s bank account without informing them.

How you can Check Whether you were Mis-Sold or Not?

Before taking this loan, you must check your financial condition and ensure that you can afford the loan. Besides that, ensure that your lender provides you with all the necessary information. In case, a payday lender does not follow these rules, you have a chance to complain.

Let’s take an example, if your monthly income is 400 pounds and you are applying for a payday loan, then the pay lender must know that you will not be able to easily pay back the loan. In fact, there can be a situation created where you have to borrow more money to repay the loan.

According to the Financial Ombudsman Services, there are complaints that the pay lender increased 130% in 2018/2019 as compared to 2017/2018. However, to reclaim the money, first, you should try to reach to the payday lender. Contact the Financial Ombudsman Services, if you are unable to reach them. 

Mis-Selling Checklist

While approving the loan the payday lender must make it clear to you about the repayment procedure. Like, how much amount you have to pay back for the loan. If not, then you can lodge a case against your payday lender.  

Most of the time the lender did not check your financial situation to ensure that you are in a position to repay the loan. Thus, you can prepare a case against the lender.

If the payday lender does not make it clear to you about how the Continuous Payment Authority (CPA) works, then you have the right to cancel the loan. 

What to do if you can not repay the loan?

• If your payday lender didn’t deal with you sympathetically and positively.
• Your payday lender did not offer you to freeze charges and interest rates.
•  In case, your lender did not make you aware of the risks and conditions of extending the payday loan.
• If it isn’t clear to you that how much amount you have to repay after taking the loan. 

If all these above mentions conditions are not cleared to you, you can lodge a case against your payday lender. 

Get back Money if the Lender is a Fraud

The amount of money you will get back totally depends on the leftover. In case, you think that you were mis-sold by an organization or a payday lender that is still active, then do not waste a single moment and immediately make a complaint against the lender.

Some borrowers loaded complains again their lender, just before the bust of the company, but they did not get any money. Time really plays a vital role in this situation. Payday lenders or fraud organizations will not be covered by the Financial Services Compensation Scheme. 

You can only contact the Financial Services Compensation Scheme, if you have not made any contact with your lender, through call or email. Also, if the lender organization fails, you need to continue the payment procedure until you get any further instruction from the administrator.

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The disease has spread so badly over the globe that WHO has declared this disease as a pandemic. People have to stay in the lockdown and hence can’t come to work. Even, people are losing their jobs. As a consequence of all these, the economy of the UK is at a greater risk. Experts are fearing long-term damages to the economy along with the severe unemployment in the country.

Recent Scenario of the UK

Till this date, the number of affected people is increasing day by day in the UK. The number of casualties is also reaching new peaks every day. People are afraid of leaving home for work. Rather they like to stay indoors. Many of them are working from home. 

But the scenario is not the same for all. There are numerous people who have already lost their jobs. There are several consumer-facing companies that have to halt their workings for now.

Other businesses have to cease their entire operations for the outbreak. The investments are getting postponed and the exporting companies are near to a great loss. These are definitely weakening the entire financial system of the UK. In the near future, unemployment would be a great issue.

Experts are expecting GDP to fall sharply this year. Social distancing is also affecting business means. From daily necessity shops to the aviation industry, the decline is visible to all. There is a huge change in financial market prices. All the risky asset prices have dropped suddenly. Additionally, people are leading their lives with huge amounts of debt. 

As an overview of the entire scenario, we can conclude that the economy might degrade to a great extent. All the major banks are setting up their monetary policies so that they can tolerate this situation. This would also help in stabilising the market.

What is Monetary Policy? 

Before leaping to the role of monetary policy and its summary, it is important to get a concept about monetary policy. Monetary Policy is an act or series of acts that are decided by the government or central banks of that particular country. The aim of the policy is to decide how much money it costs to borrow. It also decides how much money is left in the economy of the country.

The Bank of England has decided to set the monetary policy at 2% of the inflation rate. The rate of inflation means how much costs are rising in any period of crisis. The Bank has decided to keep the inflation rate as low as it can be. It would help you to maintain the overall economic growth of the country. Additionally, the monetary policy is going to ease the issue of unemployment, too.

Role of the Public Policy

The Public policy comprises all the front-liners who are dealing with the COVID-19 affected people directly. The list includes NHS health professionals, volunteers, carers all across the UK. The front liners are trying their best to get rid of the pandemic disease as soon as possible. 

In this crisis, monetary policy should take responsibility for public policy. The duty of the monetary policy is to minimize the effect of COVID-19 so that people do not suffer due to long-term damage to the economy.

The instance can deteriorate without financial stability. The Bank of England has taken all kinds of preventive measures to ensure that the economy keeps itself consistent. The Bank of England is collaborating with the government of the UK to take all possible initiatives that would bring complementary changes to the financial condition. Thus, it can support the households and moreover the disruption of business efforts.

Whereas the government of the UK has announced some fiscal support measures; the Bank of England has also supported the businesses in the UK. Furthermore, the Financial Policy Committee has decreased the countercyclical capital buffer rate to 0%. 

The committee announced this decision on 9 March 2020. The FPC is collaboratively working with the Prudential Regulation Committee. Both these committees are closely monitoring the response of the Banks to their current measures. They are also checking out the consequences faced by households and businesses due to these measures.

HM Treasury has announced the formation of the COVID Corporate Financing Facility. It would provide funding to those businesses willing to purchase commercial papers. This will act as an alternative to financial opportunities.

The Role of Monetary Policy 

The monetary policy is going to maintain a 2% inflation rate in order to maintain pricing stability. Particularly, we are talking about the Consumer Prices Index or CPI. And, in February, the CPI was 1.7%. The CPI should have declined if the COVID-19 didn’t come out. The monetary policy needs to act accordingly so that the overall financial growth doesn’t decline, rapidly.

The target is 2.0%. So, it is really challenging to maintain all the financial aspects at the same time. The damage to the economy can be sudden and of short duration but many people would be jobless. Businesses have to struggle against inflation. The role of monetary policy is to handle all these financial pressures.

Monetary Policy Summary 

First of all, after several meetings the Monetary Policy Committee of the Bank of England has decided to reduce the bank rate by 65 basis points. The committee members have taken some more important decisions at this current situation.

• The bank rate can deviate from 0.75 to 0.1%.
• Stock assets purchased are allowed from £200 billion to £645 billion from the central bank reserves.
• Sterling non-financial corporate bonds can be purchased, as well.

The Monetary Policy Committee will monitor all the banks and building societies so that the bank rate should be within 0.1%. The committee will continue monitoring until everything gets stable.

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The Bank of England states that they are not yet ready to assess the probable scale of the current situation. But, many agencies are describing the crisis as worse than the 2008 economical crisis. 

The Central Bank carried out two separate emergency rate cuts at the running month that kept the rate of key interest at a low-record of 0.1%. The size of their currently extended bond-buying plan by $774 billion that is approximately 645 billion pounds. 

Detailed Statement of Bank of England

They also said, if required, then the MPC can increase the purchasing of asset further. It might protect them from undue tightening in economical condition. They are working hard along with the Government.

Moreover, they are also trying to develop an important settlement for the British states. They are trying to pay salaries to the employees who are working for the state government. The workers who are self-employed are also on the list. 

Statement of JP Morgan 

JP Morgan is an economist of Allan Monks. According to him, there is a chance that all the bond-buying procedure will be completed within the first week of May. Although the entire process depends on the evaluation of the durability of the shock related to the time. He added that the budget of the England government might increase to 9% of GDP during the upcoming economical year. It is almost like an economical crisis. According to the Resolution Foundation, think tank, Bank of England might require to take a serious step as well as they need to purchase the bonds immediately. 

According to the former administrative officer of Bank of England, if the current situation deteriorates, then it is necessary to plan for what’s going to happen. He also added that the Govt. of England is failing to adopt directly from the markets to fund measures needed to help the economy.  

Statement of Andrew Bailey 

Andrew Bailey is the Governor of Bank of England. He said that last week when the Central Banks make a strong decision of purchasing debt directly from the govt, it leads to uncontrolled inflation and spending. 

According to Yates and Smith, the England Govt is now working along with the Bank of England. They should declare in advance that they will take a strong decision only if they are accountable, transparent, as well as temporary. 

Bank of England said in Monday that there was a high double-digit fall in the sales of the clothing store. They notice this before closing the most non-essential businesses. The consultants reported that the clients are delaying the projects. At the same time, the bank also restricted the credit to the new borrowers.

According to the Bank of England, the duration and scale of the lockdown to economic activity is extremely unpredictable. It will be sharp as well as large for the current situation. But, it should ultimately prove temporary, particularly if business failures and job losses can be controlled. 

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Hence, there is no doubt in saying that millennials are the unlucky generation. They are suffering through all the financial troubles that modern times brings with itself. Financial stability of the millennials is hit by things like high rent, educational loans, house loans, car loans and other living expenses.

Research shows that all this money worry makes the millennials twice as susceptible to stress compared to baby boomers. 47% of millennials have stated that financial circumstances are the main source of their worries. Research by Willis Towers Watson revealed that millennials are also more stressed in other different aspects of everyday life. 

The research also shows that  44% of female workers in the UK are worried about their job security and finances. This number is 10% higher than the number of men who are worried about the same thing. People may think that the millennials are a carefree generation of people but research says otherwise.

The millennials may have it hard compared to others, but every generation of people faces financial hardships. People stressing over money is nothing new. Poor individuals of every age have existed since the dawn of civilisation.

Reports From IFS states that…

The report from the Institute of Financial Studies(IFS), states that the household incomes in the UK for every generation born since the 1930s have successively increased. But, this trend came to an end for those who were born in the 1980s. The report was about “generation differences in income and wealth in Great Britain (England, Wales and Scotland, excluding Northern Ireland)”.

The reason behind this drop in income is a combination of several issues. Issues such as lower average earnings, lower homeownership, and raising prices of the house. 44 % of millennials admitted that they are having mental health problems caused by financial stress. A study conducted over 2824 UK employees revealed that one in every ten employees have taken leave because of mental health issues. 

Many millennials in the UK admitted that they feel ill-equipped to handle money. But, they are not alone in these financial difficulties. People from different age groups are worried about their financial situation.

Financial Situation of Women in the UK (Older and younger)

According to the latest government’s insolvencies data analysis, the insolvency rate among the older women (65 and above) has increased by 88%. In 2008, the number was 1109 which has increased to a number of 2082 by the time 2018 rolled in. 

During the same decade, the insolvency rate has increased for every age group. But, it seems the older women are going through the worst. A report by Rest Less (jobs, volunteering and advice site for the over 50s), showed the insolvency rate in women aged 45 to 54 grew by 69%.

Women vs Men

But, this is not the case for men. Insolvency did not increase by a huge number for them. Only among men who are 65 and above the rate, grew by 29%. For men of lower age groups, it is the opposite. Insolvency rate fell for the younger men. It fell by 23% in (34-44), 11% in (55-64), and by 10% in (45-54) year olds.

So, it is quite clear the insolvency in women has grown much more rapidly than in men. To make the picture even more clear, in 2008, the insolvency rate in women was 56% lesser than the rate in men. But, the situation completely reversed by 2018. In 2018, the insolvency rate in women was 14% higher compared to men.

The founder of Rest Less, Stuart Lewis stated that these numbers are a sign of many underlying problems. But, he was more concerned about women over 55. They will be facing long-term unemployment and will be discriminated against while applying for a job. And, since they are already in a difficult financial position the situation is much worse for them.

He also pointed finger at the 40 years of the gender pay gap for the vast difference between private pension savings of men and women. Therefore, it is no surprise that the insolvency rate in older women is growing much more rapidly. Seeing the insolvency rate rise in women gives rise to not only age concerns but also to gender concerns.

Poverty 

Poverty, amidst people who belong to a working-class family has reached a record high. A report from The Joseph Rowntree Foundation stated, 56% of the people who are living in poverty come from families where at least one person is employed. This percentage was 39% merely 20 years ago. The report also shows that seven out of ten children who live in poverty come from working households.

According to the Executive Director of the JRF Claire Ainsley said recent government policy is to blame for the growing percentage of people hurting from poverty. The percentage rose from 9.9% in 1998 to 12.7% in 2018. Approximately 14 million people in the UK are living in poverty including 4 million children and 2 million pensioners.

The report also revealed that people from specific regions of the country like London, the northern region of England, the Midlands and Wales are worst-hit. Also, people with disabled family members, who work in the retail or hospitality sector, and the ones who live in rented housing are most likely to be living in poverty.

Single Parents

Throughout the country, single parents are at a higher risk of living in poverty. According to Gingerbread, an organization that provides support to single parents in the UK, there are approximately 1.8 million single parents present in the country. 

And, they make up almost a quarter of families who have children depending on them. Almost 90% of the single parent population are women with the average age of a single parent being 39 years. Less than 1% of teenagers in the UK are single parents. For more than a decade the families consisting of a single parent and children have been 25%. 

Gingerbread conducted a study in 2018. It showed that around half of the children in a family headed by a single parent lived in poverty. The study also predicted that the number will rise to 63% by 2021.

Single parents are stuck in low-income jobs. This results in them struggling to provide for their family. And, their financial troubles do not end here. Due to low-paying jobs, single parents find it difficult to save money for the future. Or, this difficulty can also arise during any sort of emergency. This can lead to living in life-long poverty.

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The number of mortgage approval was way higher than the recent forecast. It was 4 per cent higher than the forecasted result. About 67,000 mortgage applications were approved in December 2019. 

Moreover, around the same period, the deals for remortgage increased by 3.9 per cent. The number of deals was 52,100. Whereas, the net mortgage including the once that are waiting to be approved was £4bn in January. This is a bit lower than the average of the last six month, that is £4.3bn. However, the annual mortgage growth rate stayed at 3.4 per cent. 

The landslide win of Boris Jhonson in the general election along with the Brexit lethargy resulted in a serious number of approvals for the mortgage application in January. 

People were planning to get their houses in order, in November, and from the mid of December. This is because they want to sort their things before the polls started. After the polls were in, people opted for the loans even more. 

The house and furniture price hike have made the prospective buyers and homeowners worried. Hence, they are planning to purchase property as soon as possible before the price goes up.    

What do the Indices say!!!

As a matter of fact, according to the report for the latest Nationwide House Price Index, there is a growth of 2.3 per cent in the prices in the month of February. This will make the property of the UK worth £216,092 on average.

Montlake warned that this Boris Bounce will not last for long. The sense of optimism that is currently present can vanish if the negotiation of the trade becomes unsuccessful. There is still hope because Brexit is backing them. However, as the year progresses, there is still a considerable amount of volatility.  

In the meantime, the data of the Bank shows that the other borrowings are steady. Consumer credit, which is used to purchase services and goods is growing steadily every year at a rate of 6 per cent. Consumer credit in January was worth about £1.2bn. The loan and advances for the new lending were worth £1bn. And, the borrowing of the credit card was up by £0.2bn.

The numbers might seem worrying as the people are adding to their debt. However, in reality, the rate of growth is decreasing. It has fallen from 11 per cent, which was at the end of 2016. This is because the consumers start to notice the warnings as the increase in wages starts to kick in. 

Best Time for Money Borrowing

This is a good time for those who borrow money. Currently, the market has become competitive as the money lenders are interested in lending more money. If any lender is unable to offer money at a lesser rate, they have to customize their terms and conditions for attracting more people. 

The fixed-rate mortgage is the answer to the prayers of house owners who are not willing to take the risks in recent years. The borrowers used to pay no attention to the interest charged by the lenders and rather lock in the rate. 

However, the rates are falling constantly. This falling is constant for the last decade. The two-year fixed-rate mortgage on an average is about 2.4 per cent. 

After computing for the five-year fix, the increase in the most profitable deal was 1.41 per cent. This is for HSBC and the maximum loan to value is 60 per cent. The fee is about £1,500. When the borrowers will go for securing their fixed-rate mortgage for the next decade, they will end up choosing the best deal for as little as 2.13 per cent. This will be from Halifax.   

The post Boris Bounce Leads to Home Loan Application Approval in Huge Numbers appeared first on Step Changes.

According to these 21 reports, a total of 10 people were fooled as they tried to purchase masks from those dishonest sellers. One victim claimed that he/she lost more than 15000 pounds when they purchased an online mask. According to the victim the face mask was never delivered.

A spokesman said that they receive several reports about the coronavirus scams. He mentions that the hackers send a malicious attachment through email. Once, the victims open that attachment, instantly the hackers get their personal details.

Fraudsters Techniques to Target the Victims

As the Coronavirus virus spread across the world, fraudsters are taking the full advantages of the top notches organizations. For example, the World Health Organization and the Centers for Disease Control and Prevention (CDC). Although last month, they warned people about the fraud emails.

The National Fraud Intelligence Bureau disclosed that these scammers have also created domain names similar to the Centers for Disease Control and Prevention (CDC).  Besides that, they use phishing techniques through email and other social media. Also, the cybercriminals create a fake website in order to sell fake face masks and other antiviral equipment.

To get this equipment, one needs to click on a link. Further, the victim needs to pay a huge amount of money to get this antidote equipment. 

In the month of January, in Japan, the fraudsters introduced them as a state welfare provider and attacked the Emoter banking trojan. These reports also made it clear that in Indonesia, a similar operation has been observed.

These 21 reports mention that, nowadays, by sending phishing emails, hackers can attack every citizen in the UK. However, the Coronavirus related scammers do not always rely upon the phishing emails. A recent report also discloses that the cybercriminals also send a fake health update link to the citizens.

21 reports of scams, by the National Fraud Intelligence Bureau, mentions that due to these scams, victims have already lost more than 800,000 pounds.

Fortunately, there is Good news…

However, the UK government tried their best to save its citizens. Last week, TSB said that according to the brank’s fraud, refund guarantee scheme rule, introduced in April 2019, all the victims will get their money back.

This rule includes 99 per cent fraud cases, where the victim by mistake sends a payment to the fraudulent account. However, this rule of the TSB rejects that one per cent of the customers who are somehow associated with scammers. Obviously, before rejection, they will thoroughly judge the customer details.

These industry scams continue to make a negative impact on the customers. According to the United Kingdom Finance figure, they lost £146.5m within the first half of April. This graphical figure report is prepared based on a personal account. Also, they claimed that their overall economy rate decreased by 17.5 per cent.

According to Gareth Shaw,  if a customer becomes a victim, TSB must take much more responsibility in order to return their money. He also adds that to deal with this kind of scams, all the banks must introduce basic name check security.

Also, he mentioned that the entire industry must follow the guidelines provided by the scams codes. He makes it clear that, if banks do not follow the rules, the UK govt should make it compulsory for all.

Protect yourself and your family from these Scams

You should not click on the links sent by an unknown source. Also, never respond back to the voluntary messages. You must avoid those calls and inform the police as soon as someone asks for your financial or personal details.

If you wish to buy a product online, then at first, you must research the details about that company.  Also, ask your friends about that website. And, if you wish to purchase a product online, then you are requested to use your credit card. As the majority of the credit cards provide secure online transactions.

Which Device are you using!!!

Besides that, secure your device from malicious attacks. To do so, it is recommended to always install updated software and applications.

Six-digit Passcodes

To safeguard your device, setting up a passcode is the most important thing. The passcode on the Face ID or Touch ID is automatically set to the six digits. Also, after ten incorrect attempts, the settings of your device will be automatically wiped out.

Two-Factor Authentication

Two-factor authentication adds a second layer of security to your Apple device and it is the best way to secure your device from the hackers. The best thing about the two-factor authentication is that even a person knows your password, still, they are unable to access your account.

Once you log in, on a new device from the web, instantly verification code will be displayed on the LED screen. Type this code along with the passcode and you will be logged in. Anybody, who is unable to provide both the verification code and password will be kept out.

Security Checkup

The easiest way to secure your Google account is to take the Security Checkup. This step-by-step tool protects important data and details on your device.

Provide Strong Password

Building up a strong and unique password is one of the security steps that you might take in order to secure your online account. You are advised to enter a series of words that you will never forget. Ensure that the length of the password must lie between 8 to 10 characters.

In case, the system asks for creating an answer to secure the question, give a fake answer and make it difficult for others to get the password.

The post Police Alert People As Expert Say UK Have Lost 800,000 Pounds In Scams appeared first on Step Changes.

In this current situation, you need to handle your money with extra care. Thus, we are going to list down five activities that may seem like best ideas at this current time. But, in a long term, these activities can really have dire outcomes on your health as well as your commercial security. So, you need to try to avoid the below-mentioned activities at any cost. 

Purchasing Excessive Shelter-in-Place Supplies

In this current situation, it may seem like a good idea to have some extra toiletries, groceries, as well as cleaning supplies on your home. Moreover, by doing this, people are encouraged to stay at their home. It helps the entire system to slow the spread of Coronavirus as it decreases the need for travel. However, the purchase of additional home supplies might have some unintended negative effects also. 

First of all, by collecting too much home supplies, you are also depriving the others of the community from their necessities. Secondly, if you have spent too much liquid cash or money on purchasing home supplies, then you don’t have sufficient money to cover your household bills.

So, it can cause a serious financial problem in the long run. Furthermore, if you purchase food or other supplies then they will expire before using them, then no one of your family would want to eat or use them. Thus, it can only a waste of money. 

So, try to limit your home supplies purchases to the amount that you need for a few weeks. For that, you need to know what is the weekly requirements of your family. After a few weeks when you run out of the necessary supplies, then you can visit the store again or you can also use the online grocery delivery service. 

Several stores are applying specific hours in the evening or morning for the people who are in high-risk. It also helps them to diminish the chance of illness, so they can shop when the stores are stocked as well as cleaned. 

Selling off a Bunch of your Investments 

COVID-19 has put a huge effect on the stock market. The market has been volatile for the last few weeks. As a result, some of the businessmen have sold their stock or investment to avoid too many losses. 

But, in this current situation, it is necessary not to be panic too much. You might lose money in the short term, but if you have a huge expense for your well-built business, then the stocks will probably retrieve eventually. So, it’s better to leave the investment where it is. 

If you are prone to make sensible investments decisions, then try to avoid paying too much attention to the ups and downs of the market. The stock market has already undergone several difficult times in the recent past. For example, you can have a look at the most recent recession of 2007-2009. But, it has been retrieved successfully within a short period of time. 

Purchasing a Bunch of Stocks!!!

There are some companies that are running better than ever in the Coronavirus epidemic. Because there is a huge demand for their products in the current situation. But, it doesn’t mean that these are the best options for the long term. 

If you might have invested a lot of money into your business and expect a better return. However, in the current citation, if you lose it, the entire money will probably go away forever. It can also affect your economic situation as you will not have the sufficient money to cover your living expenses when you really require it. 

Cut the Cost in Travel

In the current situation, flights are exceptionally affordable as the airlines have reduced their costs in response to flight demand. Moreover, travelling to another place may also seem like a better way to get rid of COVID-19. But, it’s like taking an unnecessary risk, particularly for those who travel into a group, such as the elder person as well as those who have health problems. 

You also can’t travel too many places at the current moment. And, travelling outside the United Kingdom is also banned as all the countries throughout the globe are trying to take control of the spend of Coronavirus. Apart from this, there are a few flights for emergency purpose. 

Spending like Normally You do!!!

The current situation is not normal and no one has any idea when the normal situation will return again. So, at this moment you need to focus on saving money by cutting our expensive as well as excessive expenses. 

This is essential for the people or employees who have already lost their sources of income due to Coronavirus. It is also important for the people who are at high risk of losing their source of income. 

So, you need to review the current budget of your family as well as you need to find out the areas where you can cut back the spending. You can find out the services that you may have used in the past, but don’t use that in the present time. 

So, it’s better to cancel the subscription of those unnecessary services. Apart from these, turning down the thermostat can also lower the energy bills. Try doing anything you can to save your money. Then, you can place your extra money into a fund or fixed deposit that can be used in an emergency. You need to check the savings every weeks and month until the current situation starts to return to normal. 

There are a lot of people in the United Kingdom who are struggling with the current situation. They are facing a difficult time in the coming months and they can’t get rid of this situation until the pandemic starts to abate and people can go back to their work. 

But, if you can learn through the aforementioned five mistakes, then it can help you to prevent your situation from getting too much worse. 

The post How to Invest Money During the Pandemic Situation of COVID-19? appeared first on Step Changes.

More than 203 countries are affected around the world because of Coronavirus. The Government of the affected countries has advised the people to quarantine themself until the situation gets better.

As a result, not only the daily wage earners are suffering but the global economy as a whole is sinking into depression for the outbreak. Countries like the United States, Europe, Japan, China, and India are releasing trillions of dollars. Government is spending to save their country from economic depression. 

Nations across the world are coming up with new strategies to confront this devastating effects of the pandemic. They are coming up with a mixture of tax incentives, loan guarantees, wage subsidies. This is intended to save the citizens as well as the enterprises and organizations. 

$7 trillion COVID-19 Rescue Package is Needed to Save the Global Economies

The economic fall out because of COVID-19 is slightly going towards “much worse” situations. For some 6 billion people in the globe, a $2.5 trillion rescue package is going to be introduced to boost their resilience to survive further. Governments and Central Banks have proposed to provide $7 trillion to the citizens as a whole. 

This total package includes government spendings, tax breaks, loan guarantees, etc. Along with this, money printing by Central Banks is also inclusive, to buy essential assets like bonds and stock funds. 

Even in developing countries (like Burkina Faso) extra-economic help is required. The international community are willing to help because of the COVID-19 pandemic. An economic slowdown situation is already faced by China in the last quarter of 2019, i.e. before the Coronavirus outbreak reached the Central area of this country. 

Is it Really Unpredictable?

The outcome of the CoronaVirus pandemic is unpredictable in terms of scale and speed. According to the latest research, the UN trade and development body, along with the commodity-rich exporting countries (that includes China) will come across a $2 trillion to $3 trillion drop in investment. This will leave a huge impact from overseas in the upcoming years. 

The United Nations Conference on Trade and Development announced a $2.5 trillion Coronavirus Aid package to help the developing countries. This rescue package will help people all over the country to avoid the worst COVID-19 scenarios as well as the devastating impacts. 

An amount of $274 billion is in the process of stimulation, on the way to Japan, which could be approved by the first week of April. Some of the economists are claiming that the global economy needs at least close to $3 trillion to overcome the breakdown. The G20 leaders are ready to give away all their money to minimize economic damage. 

Results are Hard to Believe

Though, the vast spending over the country is not enough to overcome the economic pain that the world is currently going through. While the issues like, unemployment benefits and cutting checks are still untouched. The country won’t progress until the restaurants and bars start to re-opens and people go back to their workplaces. 

Few Specific Countries and their Global Economic Rescue Package

Some of the countries like China, United States, the United Kingdom, the European Union, Japan, and India have come forward. They have taken a huge initiative to protect the economy of their country. 

United States

To save their country from the outbreak because of the deadly virus, the US lawmakers have released a $2 trillion stimulus package. According to this, the employees will get direct payments. This legislation also includes unemployment benefits. And, a $500 billion lending program to help out the US citizens. 

Besides, Congress has agreed to contribute more than $112 billion for continuing the vaccine research of COVID-19. They have declared two weeks of paid sick leave for those who are infected or tested positive for the disease caused by the novel coronavirus.

The Federal Reserve has pledged to provide $700 billion in United States treasuries and mortgage-backed securities. The Fed also came up with $300 billion to carry forward the credit flow to business and purchasers.

United Kingdom

The UK government has announced £330 billion in loan guarantees and put up the local business taxes for essential sectors like retail and hospitality for 12 months. This loan is also covering up 80% of the UK worker’s salary for the coming 3 months. 

The Self-employed persons are also getting a cash grant of 805 of their monthly income. The Bank of England has joined hands with £200 billion to increase the economic growth of the country. 

China

China is the 4th most-affected place for the COVID-19 outbreak. This country has announced an amount of 116.9 billion yuan fund relief and stimulus to its citizens in this financial crisis period. Besides, the government has declared 800 billion yuan in tax and fee reductions. The people who are engaged in the Bank of China have availed various credit facility measures. And, contributed 1.15 trillion yuan to help the enterprise which has massively gone down because of a deadly virus. 

Japan

The Japanese Government introduced a package of 30 trillion yen to help the small and medium-sized companies. And, if required, the Bank of Japan will release a 6 trillion yen fund to boost the economy of the country. 

Italy

In Italy, almost 2,500 hundred people have died because of the coronavirus pandemic. This country declared a rescue package of up to 25 billion euros on March 16. This euro package is to support employment and to strengthen the healthcare system of the country as a whole. 

India

The Indian Government released an economic package worth $22.6 billion within just 36 hours. And, this just happened after the PM of the country imposed a lockdown on the whole country. This package ensures food, health coverage as well as subsidies and other initial benefits to the daily workers.

The post Coronavirus: What Should Be the Amount of COVID-19 Global Economic Rescue Package appeared first on Step Changes.

In the UK, most of the debt collection agencies are licensed and authorized. These debt collection agencies are mostly controlled by the Federal Conduct Authority. The FCA makes the guideline on the debt agencies which will operate and work on collecting the debts. 

What Does Debt Agencies Do?

If you fail to pay the debts within the given time, you will receive a notice related to the payment. The notice will be sent by the creditors or from the debt collectors. 

Debt Collection Agencies in the UK mainly have specialization in collecting debts from certain industries and on the types of debt. Mostly they use two procedures to collect the debts. 

• The Debt collection agencies will ask the companies to pay the debt and the agency will have a certain amount of fee for collecting the money.
• The company will pay the debt to the agency at a discounted price and by doing this they will become the legal owner of the debt. 

Once the debt collector collects the debt, the company from whom you have taken the debt will have no longer contact you. The total communication will be carried forward by the collector and they will help you to pay off the debt. 

What is a Debt Collection Agency?

Debt collection agencies are the companies who mainly deal with collecting the debts when the creditors fail to get the debts. 

What a Debt Collectors Deals With?

The debt collection agencies have specialization in dealing with debt collections. They don’t have such legal powers to impose upon the individuals. But, they can connect via call, text, letter or even using the email. They can even state about the court action for not paying the debt at the correct time (as mentioned in the letter or email).

What is the Debt Collection Process?

The Debt Collection agency works in a very effective way. Each and every collection agent maintains certain strategies to collect a debt for the taxpayers. If you miss the payment, then you have to again repay the amount and this might harm the credit score. Poor credit score will reduce the ability to get further credit in the near future. 

Difference between a bailiff and a debt collector 

The debt collection agencies can collect the debts by contacting the bailiffs and debt collectors. But the bailiffs and debt collectors use different strategies to collect the debts. 

The bailiffs are mainly appointed by the Court to collect the debts. There are mainly 3  kinds of the court where the bailiff mainly works on, Magistrate court, county court, and the Sheriff Court. 

Bailiffs have the power to repossess and sell the properties that one owes to repay the debts. 

Who are the Bailiffs?

Bailiffs are mainly the Enforcement agent who works on the behalf of the creditors. They recover the debts either from taking the money directly from the debt payers or from seizing the possessions such as one’s house, vehicles, clothes, jewellery, television, and other non-essential furniture. 

The bailiffs can not pursue certain possessions such as clothes, beds and beddings, tables and chairs, a cooker, a fridge, and other essential things. 

When Does the Bailiff Force Entry?

The bailiffs can visit the taxpayers’ house if he does not repay within the given time. And they can only enter anyone’s house by applying peaceful means. Between 9-6 he can only break into someone’s house or on the public holidays the bailiffs are allowed to do certain activities. Further, they cannot enter into the home if only 16 years old children stay. 

Circumstances to Force Entry

There are certain circumstances through which a bailiff can force entry to a property and those are:

• The bailiffs can enter your house if the Magistrate Court has sent them to report the unpaid fine or debt.
• They can break into someone’s house if he has done this before and has enough experience to do so.
• They need to have a warrant from the court to enter into the debt payers’ house.

How Much Power the Debt Collection Agencies Have?

Debt collection agencies don’t have that much legal power when it comes to collecting debts. They can only act as the debt collection companies tell them to do which implies that they are mostly contracted through letters and calls. 

Sometimes, they collect the debts after getting court action or if anyone sends them to the taxpayer’s house. However, they can not threaten any debt payers via call or by sending any letters. 

A debt collection agent mostly gets an order from the County Court Judgement. And, if anyone refuses to pay the debt the CCJ will take action against him.

Rights of the Debt Collector

Debt collectors have certain rights when it comes to collecting debts. There are certain rights that they can impose upon the taxpayers, such as:

• Debt collectors can send a letter mentioning that they will send someone to visit your house/ But they don’t have the right to break into someone’s house without taking any permission from the court.
• The debt collectors cannot make the payment or take anything forcefully. 
• They don’t have the right to make the payment in cash when the debt collection agencies collect the payment.
• To enter into someone’s house, the debt collectors have to show certain proofs such as their ID if anyone refuses to speak with them. 

The Debt collectors can not harass any individual but if they do so, you should immediately file a complaint against them in the respective courts. 

What happens if you miss the regular payments of the debt?

Creditors can file a complaint against you if you fail to repay the debts. In that case, the debt collectors will start to put pressure on the individual or they can even threaten to take further actions against you. 

Some companies can provide advice such as from where you seek help or how to pay within a given time. Individuals’ bank accounts are monitored by the debt collection agencies, bailiffs or the sheriff officers. 

You won’t be able to take help from the County Court Judgment. A CCJ can provide more power to the debt collectors to collect the debt from the individuals. All the missed payments get recorded in the credit files of the debt payers. If anyone has a poor credit file, he won’t get any credit in the future. 

What Debt Collection Agencies Do If Anyone Fails To Pay Off the Debts?

If you don’t repay the creditors, they can appoint the debt collection companies to take out the money from the individuals. And to do so they go through a certain process. Mainly the debt collector agencies chase the debt and send the collectors.

But, sometimes they can even help you to increase the interest and charges. They can set a default agreement in the name of the taxpayers. And there are other activities as well which they implement to help the taxpayers. 

1. Write the Letter

The debt collector companies can write a letter to you or they can even call the taxpayers asking you to pay back the debt. You have to reply to that letter within the given time stating the reasonable reason behind not paying the money. 

• Sends the Debt Collectors

The debt collectors don’t share the same power as the bailiffs. But, some of the debt collector agencies choose the debt collectors at the time of collecting the debts. 

• Increase the Interest Rate

If you fail to pay the debt within the given time, extra interest charges will get added. And for this, the interest rate will get added to the balance.

• Put Up an Agreement

If the person misses his 6 months payments, the company can put up a default on the account which will be added to the credit report. And this will remain on the credit report for another six months. 

• Apply for the Debt via a Collection Agency

The collection agencies collect the payments when the credits will write a letter to them. Or a person can even hire the collection agents. 

• Grant Permission from the County Court Judgement

If the court is involved in the debt, you have to do certain paperwork at the time of paying the money. If the taxpayers don’t do this, the court can take action against him. 

• Go for Statutory Demand

You can even issue a statutory demand to the debt collection agencies. This is the initial step for a company to make you bankrupt. For this, you can be issued an amount on top of the debts which are worth £5,000.  

A debt payer needs to be aware of his rights when he will pay the debts. This will help him to make the future decisions when it comes to dealing with the debt collectors, bailiff and sheriff officers. 

What to do next when the debts get passed to a debt collector?

Debts are only passed through the collection agencies if the account has an amount to be paid. Each of the debt collection companies works differently to handle such situations depending on the power of the collectors.  

What You Should do to contact the debt collector?

If any debt collector contacts you and tells you to pay the exact amount of money and you fail to do so, then there is a high chance that the debt collector will file a complaint against you. Once they contact you, you should immediately take debt advice to repay them in time. 

What To Do If a Debt Collector Visit a Home

Debt Collectors will send you a letter or they can even connect you whenever they will visit your house. If any agent visits your house, you have to check certain aspects, such as:

• They should have ID proof with them. 
• The debt collectors are not allowed to take property from the house. 
• If you tell them to leave your house, they have to listen to your order. 

You should first check the ID proof, which is provided by the FCA to the debt’s collectors. However, some of the debt collectors have ID proof for being a member of the Credit Services Association. You can also check the license which is given by the debt collection agencies before they charge the debt. 

Will the Debt collectors take Extra Fees or Charges?

When the debt will be sold to the debt collection agency, no extra charges will be added to that. This occurs more precisely when the account is defaulted by the original creditor. 

What you should do if more than one agency contacts you?

Regarding the collection of the debt, if more than one debt collection agencies contact you, it is high time that you should take help from the court. You should always verify the name of the debt collection agents to avoid any kind of unwanted situations. Also, you must check the address of the collection agency when they will visit your house to get the debt. 

The post How To Help The Debt Payers With Debt Collection appeared first on Step Changes.

When to Start Worrying about Debts?

It can be stressful for you if you have too many loans on your head. Look for these signs to know if you have taken way too much of debt-

1. You do not have any record of how much money you have already paid and how much you still owe to the creditor.
2. Most of your earnings are spent on repaying the debts. If more than 20% of your monthly income is given to the creditors that means you are in serious financial crisis.
3. You have not paid your monthly instalment for a few months and now you are a loan defaulter.
4. You have overdrawn your checking account more than three times in the previous year.
5. Your credit rating is so low that you cannot get any more loans.
6. You have taken one loan to clear the debt of another loan.
7. You do not make full monthly payments to the creditors.
8. In order to pay your monthly credit card bills, you borrow money from your retirement account.
9. You have to arrange for another source of income or get another job to pay your regular expenditure bills.

Smart Ways to Handle Your Debts

Here we have listed some of the best ways that you can adopt in order to reduce stress caused by debts.

Face your Financial problems Head On

It is quite natural to get worried while struggling with debt repayments. But the first step to reducing stress from debt problems is to face your money problems and find its root cause. It is very easy to run away from your problems and pretend that everything is going smoothly. But you have to be honest with yourself. If you keep on ignoring your debt problems you will have to face more stressful situations in the future.

You must have complete knowledge of your debt situation. You should keep a track of your debt repayments so that you know the exact amount already paid to the creditors and how much money still needs to be paid. Furthermore, if you have taken multiple loans then you need to make a separate list for each creditor. This will allow you to maintain a track of the different interest rates of different loans and how much you owe to each creditor. 

Do not Stress about Other’s Debt 

If you are worried about your son’s debt even if he is not having any financial constraints then you need not stress about it much. If your son is having a stable income then he will repay his debts in the given time period. Furthermore, you should not be worried about student loan debt as these are considered as non-priority debts. You should first focus on paying your priority debts only as not settling these loans and credits have some serious consequences.

Make Changes in your Spending Habits

Different people cope with stress differently. But according to a report, people often find comfort in shopping. Most people call it therapy for stress. But it is definitely not a good solution especially when the stress is caused by debts. In situations when you are already facing a financial crisis and have a shortage of money to even pay your monthly repayments, spending money on shopping can lead to more difficult situations. Shopping can reduce your debt worries only for a short span. But after a while when you will ultimately realize that you are in a worse situation than before, you might become more stressed. Therefore to avoid facing such situations you can make changes in your spending habits.

To achieve this goal, you can start buying from sustainable clothing brands, eat more home-cooked food, spend less on luxurious items such as bags, watches, and shoes and reuse those which you already own. According to a report, people often tend to buy more from online apps than the actual stores. Therefore, you can easily understand how tempting some online offers can be. But you have to control this habit of excessive online shopping. What you can do is stick to a 24-hour limit after you have placed items on your cart before buying them. In these 24 hours, you can decide whether you actually want that product and if it’s that necessary after all. 

Therefore, the next time you feel the need to shop when feeling stressed, try to control your emotions. And opt for some better options to reduce your stress levels. Instead of going shopping, hit the gym or do some other engaging activity to distract your mind from the shopping urges.

Take Advice from a Non-Profit Debt Counselling Firm

The topic of loans and debts is very personal. Many people do not find it comfortable to talk about their financial situations with their family or friends. And moreover, your family and friends may not have the best advice for you. But we should not keep our problems to ourselves. As this may be the primary reason for all our worries and stress. In situations like this, you can get the best advice for all your debt problems if you consult a Non-Profit Debt Counselling firm. 

The non-profit debt counselling company will offer you free counselling on your financial status and how to improve it. They will also manage all your finances by building a realistic budget plan according to your income and affordability. In addition to this, their counselling sessions will help you in a great way to overcome all your debt worries. With proper debt management planning taking place, all your worries related to debts will automatically fade away.  

Make a Plan to Clear All your Debts

After you have figured out how much is left to be paid to your creditors, you will be in a better position to make a solid plan of how to repay all your instalments and clear the debts. Making a debt management plan will give you a sense of hope and even motivate you to become debt-free. 

While making a debt management plan, the first thing you need to decide is which loan you want to clear first. You can choose this depending on your current income and affordability. After you have decided which loan to clear first, you can make a budget plan accordingly. If you follow this plan you will always be on track and never miss any instalments. 

Stay Positive

Taking stress about anything is not good for your health. It has severe negative impacts on your mental health. That being said, you should not worry about your Debt conditions so much that it becomes excessive stressful for you. You can avoid this situation if you stay calm and think positively. Positive thinking always helps in every situation of life. It gives you hope for a better tomorrow and even motivates you to think more about how you can overcome this situation and become debt-free quickly.

Is it Bad to Get Worried About Student Loans?

According to a recent survey, it is found that 55% of people who have taken student loan or educational loan are worried about student loan debt. This is because if they are not able to repay the loan on time and become a student loan defaulter then they will have to pay at least 15% of their salary every month to clear this debt. It is often said that if you worry a little then you are more likely to pay off your instalments on time as you fear to miss any repayments and become a defaulter. But this is not always true. All debts should be managed without taking excessive stress. If you have a stable income and you are able to save enough money to make the monthly instalments then there is no reason to worry. 

The post Worried about Debt? Reduce your Stress with these Solutions appeared first on Step Changes.