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NEWS ALERT: Base rate rises to 5.50%; James Falla Comments
The Bank of England's Monetary Policy Committee today voted to raise the official Bank Rate paid on commercial bank reserves by 0.25 percentage points to 5.50%.
Commenting on the rise, James Falla, debt expert and MD of debt consultancy Thomas Charles (www.thomascharles.com), said:
“Looking at a £150,000 interest only mortgage, this will mean an additional monthly payment of around £31. In itself, this does not sound much. However, this is the fourth rise since August 06, meaning an increase in just 9 months of around £125/mth. In real terms, an increase in the cost of mortgage borrowing of over 20% since last Summer.
This is a significant increase in the cost of living for people with mortgages and can only be bad news for those who are already walking on the edge of a debt crisis. If every penny in the month is already accounted for, then having to find even an extra £30 per month is enough to push some over the edge.
At Thomas Charles we are seeing more and more homeowners struggling with debt repayments. Incomes have not risen by 20% during the last year and so people are meeting the growing cost of their mortgage in other ways - all too often through the increased use of credit cards and loans. With people taking ever larger mortgages to get onto the property ladder, we expect this trend to continue and inevitably end in debt problems and insolvency for some people."
Last week Thomas Charles released the results of their latest quarterly insolvency research showing a correlation between age and insolvency. Click here to view the results: http://www.thomascharles.com/rss/0021_likelihood_of_insolvency_increases_with_age.asp
CONSUMER DEBT:
Top tips
- Don’t bury your head in the sand. Try working out your financial position using the debt-help-uk.org.uk ‘debt wizard’.
- Consider transferring credit card debt to a 0% card while you deal with more pressing bills, such as any council tax or mortgage payments. But don’t use this as an excuse to run up more debt elsewhere.
- Don’t take out other loans to pay off the original debt or use a consolidation loan. If you must do this, be disciplined and don’t use the new loan money for anything else.
- Talk to your creditors about structuring a realistic repayment plan.
- If you cannot do a repayment plan and you do not want to go bankrupt then try an IVA. Visit IVA.co.uk or call the IVA helpline (0800 197 48 38).
- If you want to consider bankruptcy then try the Citizens Advice Bureau (citizensadvice.org.uk)
Useful contacts
About Thomas Charles & Co Ltd
Thomas Charles & Co Ltd was set up in 2004. The Joint Managing Director, James Falla has 7 years experience in the insolvency and debt management industry and was involved in the set up of debt help specialists, Brookvale Group PLC, listed on OFEX since 2001.
Thomas Charles operates throughout England and Wales with its head office in Acton (West London). It has a personal, consultative approach to debt management. It focuses primarily on providing formal solutions for debt problems including Individual Voluntary Arrangement and Bankruptcy. However, it will also provide advice around informal debt repayment plans where appropriate. It works with third party Insolvency Practitioners around the UK.
About James Falla
James Falla has advised people who have personal debt problems since 1997. During this period he has helped 1000s of people through the IVA process and worked with many others who have decided to undertake both Bankruptcy and informal Debt Management Plans.
James co-founded Thomas Charles (www.thomascharles.com) with William Berry in 2004 with the objective of providing clear impartial advice and solutions for people in serious debt. James has made numerous TV and radio appearances, including BBC1 News, BBC News 24, and Wake Up To Money
For further information, please contact:
Emily Cagle (PR121)
Tel: +44 (0) 20 8832 1257
Mob: +44 (0) 78 9485 5722
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