Top up fees associated to higher education, are said to be the primary cause for an astounding rise in the current level of debt amongst graduates.

According to recent statistics, the accumulative value of student debt has historically surpassed the 3 billion pound mark. The SLC is due to release official figures at the latter part of this week, but many experts predict that debt levels will be almost 3 times higher than they were this time, 1 decade ago.

Numerous student bodies and even government officials have called for drastic changes to be made to the current system, as many financially disadvantaged students are clearly suffering. Debt is a common worry amongst many people in the UK, however debts associated to education are said to be preventing graduates from reaching their full potential.

Tony Blair has also been heavily criticised for his controversial introduction of higher education tuition fees. It is suggested that the additional fees have caused many students to “drop out” of further learning, and is also becoming a serious hindrance to those who choose to absorb them.

In what can only be described as a testament to the times, one of the countries largest debt collection agencies (Equidebt) is readying for flotation on the AIM stock market.

Incidentally, the floatation will be recorded as the first ever for a UK debt collection agency, with the company hoping to raise 75 million from the listing, for which to further grow its business.

The firm’s primary activity is centred on the acquisition of huge debts from national banks, which it attains for a small percentage of the value. The company then pursues debtors in an attempt to retrieve outstanding monies, from which it makes its profit.

The UK debt market is thriving at the moment, as more and more consumers fall further into the red. Recent figures suggest that the current level of outstanding unsecured credit in the UK is valued at around £200 billion, debt collections agencies operate in a market valued at approximately 10% of that value (£20 billion).

There are numerous reasons for the sharp rise in consumer debt, however heavy reliance on credit and volatile economic conditions are thought to be the main contributors.

According to a recent study, debt consolidation loans are the least effective way for a consumer to control their debt problem.

Approximately half of all people who enter into a debt consolidation agreement admit failure in just 1.5 years of commencement. Experts suggest that consolidation loans are just not practical for people who have become seriously indebted, simply due to the level of control which needs to be exercised, in order for the plan to work. Statistics suggest that 1/3 of people who commit to a consolidation loan actually increase their overall debt by around 60%.

The primary reasons for failure, for people using this method stems (as mentioned previously) from the level of discipline needed in order for the scheme to be effective. In almost all cases, the reasons for people arriving at a situation, which warranted the use of a consolidation loan, was due to a serious mismanagement of credit in the first place. To prescribe further credit as a cure to the problem is obviously a recipe for disaster.

Numerous consumer groups have urged individuals to stay well away from consolidation loans as a means to manage their debt. It has also been suggested that lending institutions need to deter or decline people who are identified as being seriously indebted, to both protect consumer interests and to demonstrate best practice.

According to recent reports, serious debt is one of the primary causes for a number of health and life quality related issues.

One of the UK’s leading social trend research companies has conducted a survey amongst people, who have been identified as struggling with some form of debt. According to their findings, almost 90% of respondents claimed that financial concerns consumed their thoughts on a day-to-day basis. Serious debt has been linked to a number of health related issues such as depression and worryingly suicide. Debt is also one of the primary causes for the break down of relationships, social confinement and job loss.

As a means to control serious debt amongst the populous, numerous consumer groups, debt charities and even government departments have called for the introduction of debt awareness to form part of the national curriculum. It is suggested that credit management is a compulsory part adult life and children should be educated on the subject from an early age.

Few people appreciate the type of impact serious debt can have on a person’s health, and many other aspects of their social life. Depending of the severity of a situation, debt can be quite crippling and it is important to identify and help such people at the earliest possible time.

If you’re a student or have partaken in some form of further education at some point in your life, chances are you have amassed a few debts as a souvenir of your journey.

The theory as to whether loans can be the root of long-term personal debt for former students has been the centre of many debates, for quite a while. According to recent research, the acquisition of loans whilst in further education is not directly responsible for debt later on in life (from the perspective of accumulative interest). What appears to be more harmful for graduates is the adoption of a “credit as a means to survive” attitude resulting from the student lifestyle.

Accordingly, former students are less likely to consider the possible future detriments of multiple credit agreements with many viewing standard credit terms (such as personal loans) in the same light as student credit (i.e. prolonged repayment terms). It has also been suggested that graduates expect to become indebted to some degree, supposedly viewing those with minimal to no debt commitments as unusual.

Statistics suggest that the average student will amass a debt of 13,000 upon graduation with a propensity to increase debts further by around 100% during their lifetime. The average unsecured debt for people, who have skipped higher education opting to enter into full time employment instead, is said to be around £8000.

A new study, conducted by the UK’s leading credit authority has discovered that consumers who frequently choose to make bare minimum repayments on their credit cards, are more likely to run into debt problems as a result.

According to the study, almost 60% of credit card owners are in the habit of making minimal repayments to their card balance each month, with the majority claiming that they choose this option as a matter of “convenience”. However, very few people are actually aware of the debt implications associated to making small repayments on cards.

In almost all cases, making the smallest possible repayment on your card will actually increase your overall debt, and crucially, will keep you in debt for longer. Typically, the smallest contribution a person can make to their card balance each month is around 2-3% (or £5). However, the rate of interest tied to the majority of card balances is at least 10 times that amount. What this means to the consumer, is that by making the smallest possible contribution, you will only be repaying a small proportion of the accumulated interest, and not touching the actual balance.

This fundamental lack of understanding by card users has caused much concern amongst officials, mainly due to the fact that people are running the risk of amassing serious debt, without even realising it. It has been suggested that the average card balance currently stands at around £3000, however if a person opted to make the smallest possible repayment (and discontinued to use their card) it would take almost 25 years to clear the debt. The reality however, is that people continue to spend on their cards, and continue to make minimal contributions. This in turn causes their overall debt to increase dramatically, as they accumulate interest on top of the existing interest and so on.

The minimum repayment option should never be viewed as a convenience, and you should always try to clear as much of your balance as possible, whenever the opportunity should arise. Alternatively, if you haven’t already done so, it may be worth switching your balance to an interest free card. Many cards offer 0% interest fixed term facilities, however always read the small print as some cards will not allow you to re-switch or may charge a fee as a result.

A controversial statement recently issued by the UK’s leading insolvency body, claims that lending institutions may have hidden agenda’s with regards to their condemnation of the IVA procedure.

According to the IP body R3, lending institutions are frequently rejecting IVA proposals in an attempt to force high rate consolidation loans upon indebted consumers. IVA’s allow seriously indebted people to propose a payment alternative to their creditors, allowing them to write off a percentage of their overall debt. However, many lending organisations have publicly criticised IVA firms, stating that the procedure is being forced onto consumers when far more practical alternatives will suffice. It appears that in this instance, the “practical” solution referred to, is in fact an even more expensive consolidation loan.

Representatives from the insolvency body have condemned such practices, as being “unethical” and “immoral” stating that lenders have a responsibility to consumers and forcing loans on to people through the refusal of an IVA, constitutes as abuse of their power. It is suggested that the primary reasoning behind voluntary insolvency rejections are two fold, first and foremost to avoid any potential losses that would result in the approval of an IVA, and secondly to make even more money through higher rates of interest tagged to a consolidation loan.

It is unanimously agreed that consumers cannot borrow their way out of serious debt problems, and we would advise any person who has been offered further loans as a means to escape debt, to contact a dedicated debt charity or consumer body before making up your mind.

If you want to reduce your chances of overspending and the running the risk of going into the red, it may be a good idea to know how much money you’ve got to spend.

What on the surface, appears to be a fairly obvious statement is apparently not so obvious for almost 75% of UK adults. According to a recent study, only 25% of people know the exact balance of their bank accounts at any given time. Approximately 2/3rd’s of people can pinpoint their balance to the nearest 10 pounds, with the remainder only able to quote their balance to the nearest 100 pounds.

The study further reveals that surprisingly low amounts of people check their accounts on a daily basis (approx 1 in 10), with a further 50% stating they check their account balance every few days. However, although the figures do seem to be very low, they are apparently better that they were 12 months ago. The market analyst responsible for the findings has stated that people are becoming more aware of their finances, in light of news re bank overcharges and increased cases of identity fraud.

Consumers need to understand the importance of monitoring their finances daily, as guesstimating your financial position is a sure fire way to run into trouble. It is possible that this news could be another contributing factor to the rise in IVA cases and overall consumer debt.

A long awaited meeting between members of the BBA and representatives of the Insolvency industry is scheduled to take place this afternoon. Their mission… To establish and agree new guidelines for which to govern and better regulate the IVA industry.

The key points of discussion are expected to include a review of how IVA firms charge their clients, as many banks claim current fees are to high. It is also likely that a more structured approach to the actual promotion of IVA’s will be put into place.

A senior spokesman for the BBA has stated that the primary purpose of the meeting is for both IVA practitioners and lending institutions to unilaterally agree to any proposals that arise as a result of the meet. The vice president of the ABR commented that his feelings towards the event are positive, and are the result of much progress made in the last few months.

For consumers, the new sets of rules are likely to simplify the IVA procedure and ensure fewer people enter into an agreement under false pretences. However, some IVA firms feel that the proposed fee structure is not a fair representation of the amount of work involved with regards to the set up of an IVA.