Simon Read: Bankruptcy mustn't become the latest celebrity accessory

The people's champion

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The Independent Online

I've written about Kerry Katona before, and not in positive terms. The former reality star and bankrupt pocketed a huge fee from a payday lender this year to flog the expensive credit on daytime TV.

The original ad was banned by the Advertising Standards Authority for being “irresponsible”.

On Tuesday the Atomic Kitten singer, pictured, filed for bankruptcy at Wigan county court. It was the second time she had done so, after being declared bankrupt in 2008.

Bankruptcy used to be a mark of shame. Now it seems Ms Katona is turning it into a badge of honour. At a red-carpet event on Wednesday she brazened out her latest downfall, saying: “I feel amazing. I've got a roof over my head, food in my belly, four amazing kids, the love of my life, what more could a girl ask for?”

I applaud her for being plucky in the face of adversity but her continual ignorance of even basic money management is not something to be applauded.

Her fans, and there are still some out there, could easily be led to believe that financially reckless behaviour pays.

Indeed, let's remind ourselves why her payday loan commercial was banned. The ASA said references to Ms Katona's financial problems and bankruptcy within the ad “had the potential to encourage vulnerable viewers with financial problems to seek to resolve them through the payday loan service”.

Ms Katona's action this week was worse, as she seemed to suggest it's easy to walk away from debt. That is much more irresponsible.

Trust and integrity? Some hope for investment firms

I was speaking at an investment industry conference this week. I spoke about what I believe consumers in the future will want from wealth managers and other finance firms.

My message boiled down to this: technology will give consumers much more power and knowledge allowing us to make more informed decisions about money.

The more informed we become, the more we will be demanding of our finance providers. And underpinning our decisions in the future will be trust. We will choose the bank, fund manager, financial adviser that we trust to treat us fairly and not rip us off.

Speakers from the industry at the conference run by the Chartered Institute for Securities and Investment appeared to have grasped that idea. They spoke of the importance of “gaining trust” and showing integrity.

Laudable stuff. But until there's clarity on charges and fees, I'm afraid the investment industry has a long way to go.

Interest rates are at record lows, so overpay

The Bank of England kept interest rates at 0.5 per cent this week, the level they've been at since March 2009. Further, the Bank's new Governor Mark Carney intimated that rates could remain at rock bottom for the next three years.

What that gives to anyone with a mortgage is an opportunity. Home loans have never been cheaper so while you're enjoying the benefit of low repayments, give a thought to the future.

Eventually rates will rise, which will mean monthly mortgage demands increasing. But if you can afford now to overpay a little – or even a lot – you could avoid any payment shock later.

But, more crucially, you could also save thousands. That's because your overpayments will reduce the capital – the amount of money that you still owe. Less capital means less interest. Less interest means more money in your pocket. Sounds simple? It is. If you can afford it, overpayments could be a great financial move.

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