Simon Read: The difference between debt misery and a solution
Saturday 05 June 2010
The recession may be over but money worries remain for almost three-quarters of the UK, according to poverty charity Elizabeth Finn Care. Its research published this week reveals that two out of five people think that they will be financially worse off in six months' time, with older people even more negative about their money situation – half of those aged over 55 believe they will have less money as the year end approaches.
Interestingly, only one in 20 blames themselves for their financial situation while a third thinks they will be worse off because of the new coalition government. Trying to put the blame on others is natural but those who refuse to accept their own part in their financial problems are likely to be the ones who refuse to seek help in finding solutions.
Previous research carried out by Elizabeth Finn Care showed that almost a third of people got to the stage of skipping meals because they couldn't afford to buy food before they considered contacting a debt charity for help. Meanwhile over half couldn't afford the transport costs involved in visiting family and friends, yet still didn't seek help or find out if there financial support was available to them.
I've often written about the problems of coping with a debt cycle and the fact that the shame of getting into debt leads many to keep quiet about their penury. As the shame increases many find it harder and harder to do anything about their problems. Matthew Sykes, chief executive of Elizabeth Finn Care echoes that. "We know from experience that it can take a long time before people begin to seek help with their financial predicaments, as often they are too ashamed or embarrassed to approach a charity for support," he says.
So I'm glad to publicise the charity's Turn2us website and recommend that anyone beginning to struggle with their finances and worried about getting deeper into debt should check it out. The website, which you'll find at www.turn2us.org.uk, allows you to check your benefit entitlement and search for grants from more than 3,500 charitable funds online. A visit to the site could yield the cash that could help make the difference between debt misery and a debt solution.
FUND MANAGER Jupiter Asset Management is set to float on the stock market later this month. The company runs a number of good funds and has a decent reputation. Potential investors have until 14 June to apply to buy shares with the share offer price to be announced on 16 June. But is investing in a fund manager a good idea?
That depends on your view on how stock markets are likely to perform over the next few months or years. In simple terms a rising market will allow the funds managed by Jupiter to benefit, which should make the company's shares look more attractive. If markets slump then the opposite will happen. There are, of course, lots of other issues to consider before buying shares, not least the timescale involved: are you looking for a quick gain, for instance, or are you prepared to wait for years for profits?
Sometimes the excitement generated by an initial public offering (IPO) can encourage investors to steam in without thinking through a proper strategy. For that reason I've always been inclined to avoid them. But then I've often had to subsequently sit back and see others enjoy a considerable quick profit. Investing in an IPO can be a gamble too far in my view.
Costs soar if your location is wrong
how much you get charged for your energy depends on where you live, according to uSwitch. The comparison site accuses energy companies of regional pricing, meaning a postcode lottery decides the price of your energy, and some people can end up paying £100 more simply because of their location.
ScottishPower, for instance, charges customers in one area up to £189 more than customers living elsewhere, according to uSwitch. "While suppliers choose to target their ultra-competitive online plans regionally we will continue to see a postcode lottery," says Ann Robinson, director of consumer policy at uSwitch.
"Consumers cannot assume that their local supplier will automatically be cheaper – very often they are not," she says. "The key thing is for people to understand that energy companies price by region and to minimise the impact. They can do this by making sure they move to the most competitive plan with the most competitive supplier in their region."
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