Over the first three months of 2008, individual insolvencies were calculated at 25,264, a rise of 1.7% up from the previous quarter period.

The figures revealed that there were a total of 15,651 bankruptcies out of the overall 25,264 individual insolvencies declared, with bankruptcy declarations from the self-employed sector falling to 11% in 2007 compared to 61% in 1995.

Individual Voluntary Agreements (IVAs) reached a total of 9,614, down 22% in comparison to the same quarter in 2007, perhaps surprisingly given the added pressure on financial services created by the ongoing credit crunch.

The IVAs, which are basically arrangements made with creditors aimed at reducing the total amount of debt, are considered to carry less stigma than bankruptcy. The IVA industry is reported to be pushing through policy to further publicise and improve the service, and expects this effort to be reflected in the figures for the next quarter.

Mark Sands, KPMG director of personal insolvency, commenting on the current insolvency figures, commented that data from his organisation revealed that the average amount of debt owed on an IVA during the first quarter was £48,200, with over 500 people owing a minimum of £100,000.

Meanwhile Nick O’Reilly, newly appointed President of R3, the Insolvency trade body, warned that official statistics hid the full extent of the UK debt problem.

He commented: “The true number of those unable to pay their debts could be three times higher due to those in Debt Management Programmes (DMPs) not being included.”

Also remarking on the parlous state of indebtedness now existing in the UK, Anna Sofat, founder and Director of Addidi Wealth, a financial management service aimed at women and administered by women, said that Britain has “a lifestyle of debt”, and warned that soon many consumers “will pay the price for it”.

Ms Sofat believes that one of the main reasons why people find it increasingly difficult to save money is because mortgage rates are now higher than they have been for some time.

She explained that recently large numbers of consumers had been coming out of remortgages and fixed rate mortgages, and that towards the end of last year two to three year fixed-rates experienced a significant rise in interest charges.

Ms Sofat also commented on the fact that within the last two years lenders were offering money at “silly rates”, pointing out that personal loans were being offered at cheaper rates than a mortgage, homeowner loan or unsecured loan.

The overall gloomy picture of a debt-ridden nation was further borne out by a Citizens’ Advice Bureau report released recently, which stated that enquiries regarding mortgage arrears rose by 35% in the first two months of this year in comparison with the same period during 2007.

The impact of the credit crunch on property investment also continues to be keenly felt with The Nationwide company publishing figures revealing a fall of about £2,000 on the value of the average UK house, now standing at a figure of £178,555.

The cumulative result of this latest information is to generate new fears of negative equity forcing a likelihood of more house repossession, with little reassurance coming from the chilling and salutary tale of the Scottish £10million lottery winner, John McGuinness, who, after running up debts totalling £2.1million to the Royal Bank of Scotland (RBS), was forced out his £750,000 mansion on April 31st of this year.

Concern about money now also seems to be affecting the nation’s children, with a recent survey by Abbey Banking of 300 children between the ages of 11-15, revealing that the fear of “being poor and falling into debt” was their second greatest concern after worries about examinations.

Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

However, traditional homebuyers will not be the ones to benefit, research revealed. Instead, it will be the professional landlords in the buy-to-let market who gain the most. Their large portfolios make them the most financially secure, with some even able to put a portion of their rental income aside for personal use.

In fact, almost 50% of landlords who owned 20 or more properties earned enough from their rental properties to supplement their primary savings. Of the other half, nearly 40% made enough money from their property portfolios that they were able to rely on it as their main source of income.

Rental properties in central London once again proved to be the most successful. Yields in the capital city can be up to four times higher than amounts generated from properties in the south-east of England.

Alliance & Leicester’s results further predicted that Scotland would see an increase of 5% in rental yields in 2008, with the north of England close behind at 4%.

Overall, 71% of those surveyed expected good results in the new year.

Jeremy Claridge, head of specialist mortgages at Alliance & Leicester, commented on the situation: “It is encouraging that buy-to-let landlords indicate they are feeling buoyant about the outlook for 2008.

“Regardless of a tough financial year, it is clear the buy-to-let property market is still healthy for longstanding landlords, especially for those in the south-east of the country.”

The latest data from the Rics quarterly Letting Survey shows that the demand for houses has risen 25.2% since the last quarter, while the demand for flats has dropped by 20%.

This is good news for landlords, who are riding the wave of demand in relative comfort, with gains from rising rents offsetting the erratic market.

However, the survey also warned of some uncertainty for landlords in the future as tightening lending criteria and successive interest rate hikes begin to hit the buy-to-let market.

Meanwhile, those hoping to invest in real estate are increasingly discouraged by the lack of incentives and the unstable property market. 

Jeremy Leaf, spokesman for Rics, commented: “With rents still on the increase, many would-be buyers will find accessing the housing market even more difficult as they struggle to raise the capital for that first important purchase.”

Standard Life Bank will lower its Freestyle Standard Variable rates by a quarter of a percent to 7.21% as of January 1, 2008.

HSBC is also planning to reduce its variable mortgage rates by a quarter percent - from 7% to 6.75% as of December 24, 2007.

On December 6, following the Bank of England’s decision to cut the interest rate, HSBC was one of the first lenders to react - immediately reducing the rate of its tracker mortgage. The bank’s newest reduction puts its variable mortgage rate at least 0.24% lower than most of its high street rivals.

Financial comparison website Moneyfacts.co.uk reported last week that 31 providers had implemented changes to their interest rates following the cut. Twenty-five reduced rates by more than 0.25%.

However, analyst Lisa Taylor criticised the response of the banks, saying current changes compared unfavourably with reactions in past years.

The last time rates fell back in August 2005, 46 lenders announced changes to their rates.

Ray Boulger, senior technical manager for John Charcol, claims trackers have “really come into their own” following the Bank of England’s recent cut to interest rates. With only a few lenders lowering their rates accordingly, a variable mortgage provides a lot more protection. 

Boulger noted: “We have seen over the last few years there is always a proportion of lenders who do not move their rate in line with the Bank’s rate.” 

“Most of the time a tracker mortgage is a quarter of a [percentage point] higher than a fixed rate mortgage, providing the starting point is good.”

Looking ahead, Boulger predicts that trackers will continue to sell strongly in the near year despite some lenders reducing the number of mortgages in their portfolio due to the credit squeeze.  Lenders are not expected to place restrictions on them as base rates fall. 

Boulger does not expect there to be a significant rise in the number of people switching mortgages in 2008. 

He added: “The reality of people deciding to look at their mortgage product is based on whether the value of a discount mortgage is cheaper than a tracker mortgage or vice versa.”

Mortgage website mform.co.uk has completed research showing that the average cost of closing a loan remains about £150. This is regardless of efforts made by the Financial Services Authority (FSA) in August to make the process clearer to customers.

The website’s analysis covers all major lenders. Although a few such as Royal Bank of Scotland group, Standard Life Bank, Lloyds TSB and Cheltenham & Gloucester have abandoned fee schemes, most continue to charge over £100. 

According to mform’s report, many mortgage companies were not making charges clear on their websites. 

FSA is still pushing to make lending terms more transparent and has ruled that next year customers may reclaim exit fees if they paid more than the amount agreed to in the original terms and conditions of their contract.

Francis Ghiloni of mform praised lenders who have eliminated exit fees and attributed the improving situation to the FSA’s work. 

“They should be considered at the start rather than come as a nasty surprise when it’s time to move on,” Mr. Ghiloni said, referring to the hidden fees many borrowers encounter when trying to wrap up their mortgages. 

Borrowers are finally waking up to the fact that such charges are part of the price of the mortgage deal - they don’t relate to any administration costs. 

Improvements spearheaded by the FSA would be especially helpful to people who regularly remortgage and move from lender to lender.

Mr. Ghiloni advised borrowers to learn what they could at the outset of their loan and to “take into account exit fees as well as application fees and other costs which will have an impact on the true cost of their loan.”

Poor planning is the major culprit, says Alison Wright, Chief Marketing Officer at Egg. “Each year we get 12 months advance warning that Christmas is coming, but still often resort to last minute panic buying. Consumers need to try to find ways to drive down the overall cost of Christmas - one way seems to be by avoiding those last minute shopping sprees, when lack of choice and panic buying are rife.”

Egg research also found that, despite popular belief, there is no difference between men and women when it comes to last minute panic buying. Women are just as bad as men about failing to plan ahead for the holidays.

According to figures released yesterday by cash machine network operator LINK, daily ATM withdrawals for the first ten days of December are up by 7.1% over the last month - previous years’ figures have been closer to 5%. 

This trend goes against predictions made last month by payments association APACS. The company predicted an increase of £53 billion or 4% in total festive retail spending over last year’s figures, which it claimed would be driven by increased card spending, accompanied by a 5% fall in cash spending - dropping from £19.8 billion in 2006 to £18.9 billion in 2007.   

The drop in credit card spending appears to be confirmed by overall retail spending figures released yesterday. Credit card giant MasterCard says shops recorded weak sales for November, causing a decline in the annual retail sales growth rate from 4.5% to 4%.

According to new research, one in five Britons will still be paying for their Christmas spending in June. 

One in ten will be paying off their debts in September, and a further 3.9 percent will be celebrating Christmas next year with a hole still in their pocketbooks from 12 months ago. 

Figures released last week by MoneyExpert.com supported the stats, showing 4.4 million people are still paying off credit card bills from last Christmas.

“It never ceases to amaze me how Christmas continues to sneak up on people and how ill-prepared financially they are to deal with it,” said Cesarina Holm-Kander, presenter of Channel 4’s Your Money or Your Wife and speaker at this year’s Your Money Matters Show.

“To those who are spending without thinking about the bigger picture this Christmas, I would like to offer a little reminder - a credit card binge is not just for Christmas, it’s a legacy that could be with you for most of next year, too.”

Despite the increasingly high cost of gifts expected over the holidays, only 50% of Brits put aside any savings in preparation for Christmas. 

The biggest savers are in the north-east, but perversely these are the same people who are most likely to get into debt this holiday period.

Unsurprisingly, London is home to the most aggressive festive spenders in the country, with one in five shoppers dishing out more than £1000 in holiday bills.  Contrast with East Anglia, where frugal spenders average half that - spending £500.

Overall, £53 billion is expected to hit retail counters over the Christmas period - £11.7 billion of that on plastic.