During the recession many people did their best to cut back on the amount that they were spending, and rather than accruing debt they decided to make payments to try and clear existing debts to ease their financial situations. However, inevitably there were many people who were unable to do this as a result of their finances, and in order to cope with essential payments such as their mortgage repayments, rent payments, and day to day essentials had to turn to their credit cards.

On top of this the recent Christmas period has also affected the level of credit card debt, and following another turbulent financial year many people did not have enough money put aside to pay for their Christmas purchases and once again had to turn to their credit cards. With credit card bills having now been sent out after the Christmas period a large number of cardholders will found that they cannot cope with repayments on their cards.

As a result of all of these factors industry experts are now expecting the number of credit card consolidations in the UK to increase, as consumers rush to take action to make their credit card bills more affordable and relieve the financial strain. The soaring number of personal insolvencies in the UK has already given an insight into the problems that consumers are facing with their debts, and for many consolidation may now be necessary to cope with their finances.

There are a number of options available to those that are looking to consolidate their credit card debts, and in some cases this can be a really sensible solution as it can mean reducing interest and cutting repayments, which can subsequently mean reducing the risk of missed and late payments, CCJs, and black marks on your credit report. A consolidation loan is one of the solutions that consumers can go for, and these loans can be used to wrap up credit card debt as well as other smaller, high interest loans, catalogues, store cards, etc.

Another option is to go for an interest free balance transfer credit card, and with these borrowers can transfer debts from multiple existing cards up to the new credit limit, and can then enjoy a generous period of interest free credit to clear the transferred debt. For those that think they may need longer to clear their transferred debt a life of balance transfer is another option, and whilst these do charge a low rate of interest on the transferred balance the interest rate is far lower than the standard and it means that the low rate will be applied for the life of the transferred balance providing more time for the balance to be cleared.

The report showed that there had been continued recovery in the Scottish property market, with the average property price in Scotland rising to £160,074 in the three months to the end of January according to the report.

Compared to the previous quarter the property price increase for the latest three month report was up by 5.9 percent. The biggest property price increase was seen in Dundee, where property prices increased by 16.3 percent over the past quarter.

In Edinburgh there was an increase of 11.4 percent, and there was an increase of 11.2 percent in property prices in the south west of Scotland. In the south ease the house price increase for the quarter came in at 10.4 percent.

The north of Scotland saw property price increases come in for the quarter at 8.4 percent, and in Aberdeen the increase was recorded at 7.3 percent.

However, there were areas of Scotland where property price drops were recorded for the quarter, which included a 7.6 percent in central areas and a 1.6 percent drop in Glasgow.

The report stated that there were signs of recovery in the property market in Scotland, but the figures were based on low levels of activity. One of the officials involved in the research stated: “Although a house price recovery is evident in Scotland, it is based on much reduced levels of activity. Nevertheless, the Scottish housing market is now into recovery.”

The report added that between February 2008 and February 2009 there was a 65 percent fall in property transactions in Scotland.

A report from the British Chambers of Commerce has indicated that many workers will face further pay cuts over the course of 2010, with many others facing a freeze in pay as businesses continue to struggle. According to the BCC around 60 percent of bosses have said that they are going to be freezing pay for workers in 2010. The news is bad for those who will see their pay frozen again, but the BCC has said that the situation is even worse for some workers.

Around 5 percent of bosses have said that they are planning to actually cut wages next year, which means an even more bleak outlook for some workers. Nearly 20 percent of bosses are also looking at cutting benefits in 2010 in order to try and save money. This could include bonuses, gym memberships, and the like. The BCC said that the figure may have been higher but 40 percent of bosses said that their workers did not receive such benefits anyway.

David Frost from the BCC said: ‘We face a tough year ahead. It will be a really long haul. The stark reality is that business finances are still under incredible pressure.’ He added: ‘Wages freezes and cuts are unpleasant but have ensured unemployment has not risen like it did in previous recessions.’

In some of the worst hit areas around three million people had to stay off work due to problems caused by the weather, and this equated to an absence rate of 50 percent. With thousands of schools and nurseries being closed many parents were forced to take time off work, whilst in other cases workers simply weren’t able to tackle the roads in order to get themselves into work.

The army had to be called in to rescue stranded motorists in some areas, and hospitals had to cancel non-essential operations as the weather continues to wreak havoc across the country. Forecasters have said that the cold spell is the worst that has been seen in around thirty years, and in Scotland temperatures could drop to as low as -20 degrees.

The weather has already caused chaos for many people, leaving drivers stranded, air passengers unable to travel, households without electricity, and roads in highly dangerous conditions. Some councils stated that they only had enough grit to cope for one day, and even Business Secretary Lord Mandelson has stated that he is baffled by the inability of Britain to prepare for bad weather such as this

Economists have stated that the move to keep the base rate on hold has not come as any great surprise, and most do not expect the MPC to increase the base rate in the near future. The move to keep interest rates on hold has been welcomed by manufacturing and industry groups, who have said that whilst the economy has shown signs of improvement it is still fragile and there is doubt over the sustainability and strength of the recovery seen so far.

The manufacturers’ association the EEF stated: “The recovery is now underway, but its strength remains in doubt. There are a number of potential pitfalls even as the UK economy starts growing again, including cautious consumers, questions over the public finances and a still-fragile banking system.”

One economist said that 2010 would be a very difficult year for policy makers, as there were many difficult decisions to be made with regards to interest rate movement and the quantitative easing programme. The Bank of England also confirmed that the QE programme would be held at £200 billion but would continue to be reviewed. There is a chance that the QE programme may be extended next month, although most industry experts do not think that it will be extended any further in the foreseeable future.

The letter expressed great concern over the risk that Britain faced as a result of the public debt, which is heading towards £1.5 trillion, and it said that the public debt level ‘could embark on an unsustainable path, and may already have done so’. The economists went on to state that Britain was at risk of losing its triple-A credit rating, and that the effect upon sterling could be disastrous.

The Labour government has recently made a decision to wait until after the election to produce a Comprehensive Spending Review. This fixes the budgets of departments for a three year period. However, the postponement of this could pose a further risk to Britain according to the letter from the economists. Figures show that the budget deficit for this year comes in at a record £178 billion.

In the letter the economists stated: ‘The absence of even the rudiments of a convincing plan to reduce Britain’s structural budget deficit in the December Pre-Budget Report was highly irresponsible and risks damaging the economy. It showed alarming complacency in the face of the fiscal challenges facing the UK.’ However, the Treasury said: ‘The Government is committed to halving the deficit over four years and has set out the slower spending growth and tax rises necessary to achieve it. The new Fiscal Responsibility Bill will … require a year-on-year reduction in borrowing.’

The test cases relate to borrowers who are trying to escape their debt by stating that lenders have breached regulations relating to the Consumer Credit Act. Many borrowers have refused to make repayments on their debts because of this, and the test case is designed to determine whether the cases have merit. If the judge decides that they do then this could enable many more borrowers to escape their debts under the same claim.

The claim that the cases are making is that the lenders have not been able to provide them with a copy of the original loan or credit agreement, which is something that they are supposed to be able to do under the Consumer Credit Act. Many are claiming that because the lender has been unable to provide this the debt is not enforceable and have therefore refused to make repayments on the loans.

The Office of Fair Trading has said that some borrowers have become too reliant on technicalities that they think may get them out of debt, but which may not actually be effective. The OFT said that in some cases consumers had been subject to misleading information, adding: ‘As a result, numerous disputes have been generated over whether a request has properly been made, whether the duties have been complied with and whether as a consequence the agreement can be enforced.’

Recently released figures have indicated that more and more people are doing this, with the number of insolvencies in the UK said to have hit historic highs.

In the third quarter the number of people becoming insolvent soared, breaking the previous high seen in the summer.

It is thought that the surge in insolvency numbers is linked to the new Debt Relief Orders, which are aimed at low income families or individuals. Many of these quickie Debt Relief Orders have been taken out by those that have seen their income reduced of have lost their jobs. The figures were released by the Insolvency Service.

One industry official said: ‘Unemployment and falling house prices is the issue as people seek advice when they have less surplus income. This has led to the rise in DROs in particular and they will continue to rise as debt advisers become more familiar with them and begin to recommend them on a more regular basis.’

Another said: ‘Three months ago, people may have had some equity in their property, but now they may not necessarily have that. They may not be in a position to pay off their mortgage and may have to turn to DROs as a last resort.’

One economist added: ‘Unfortunately, it is highly likely that individual insolvencies will continue to rise for some time to come, despite current mounting signs that the economy will finally return to growth in the fourth quarter. Unemployment has already risen substantially and is likely to climb significantly further, many people are suffering wage freezes or even cuts, debt levels have risen and credit conditions remain very tight.’

The watchdog group is targeting around twenty six of these firms following claims that they could be mistreating their elderly clients through misleading and unfair contracts. There are concerns over the fees that these companies may be charging to clients who decide to buy or let their properties in terms of exit fees.

The watchdog has expressed concerns that the contracts that come with these exit fees could be in breach of Unfair Terms in Consumer Contracts Regulations.

The OFT is now looking into these concerns and one official from the watchdog stated: ‘This investigation is motivated by the need to ensure that terms and conditions are clear and fair.’

The agency has contacted the twenty six companies, which are as yet unnamed, and has provided them with two weeks to respond.

An official from the charity Age Concern and Help the Aged stated: ‘This is good news for thousands of people living in retirement properties who are angry about the charges they incur when they come to sell or rent their homes. Rather than enjoying their retirement, older, potentially vulnerable people are experience a huge amount of stress and worry as they try to ensure the charges they are paying are fair.’

However, he said that whilst the OFT intervention was welcomed there was plenty of other measures that needed to be looked at. He added: ‘We have heard from hundreds of residents who are concerned about many unfair practices that retirement homes are carrying out. The Government needs to improve regulation across the industry as a whole and create simple ways to challenge unfair housing charges.’

The jobless rate in the country has risen by over 200,000 in the past three months alone, bring the total of unemployed to 2.47 million – the highest it has been in over 14 years. The unemployment rate stands at 7.9% today – up from 5.6% one year ago.

The recession has exacted a toll on the people and the economy of Britain. According to the figures released by the Office for National Statistics, only a few groups are experiencing any success in obtaining work, such as those in the public sector and foreign-born workers.

David Blanchflower, a former labour market specialist and official with the Bank of England, says that the numbers of those graduating from colleges and universities is the largest they have been for some time.

Thus the young people are coming out of school and unable to find jobs, which makes the recession that much worse for this age group. He fears that the graduates will have permanent scars because of the lack of job opportunities that are open to them.

Blanchflower went on to say, “Firms have stopped hiring at a time when there are lots of young people around. This is a national disaster. The Government needs to do everything it can to get them off the unemployment registers. I believe there is going to be another huge jump.”

His analysis of the job market for the young people of Britain was confirmed by the reports from the Organisation for Economic Cooperation and Development (OECD), which warns that joblessness will continue to rise for some time to come. There were 2.7 jobs lost between December of 2007 and July of 2009 and predicts that ten million more people will lose their jobs by the end of 2010.

OECD-wide unemployment is the highest it has been since it started keeping records at 8.35%. It predicts that this percentage will likely reach 10%.

Stefano Scarpetta of the organisation said, “We are facing a jobs crisis. This is the most rapid increase in unemployment we have seen since the early 1970s. There has been a huge increase in youth unemployment. We need to prevent a lost generation of young individuals who are not being given a chance.”

Almost 20% of young people in Britain are unable to find a job. A further 34.6% are classified as inactive, which means they are on sick leave or have become despondent with the job market and have stopped searching for work. The number of people claiming jobless benefits rose by 24,400 in August to a total of 1.61 million, the highest it has been since May of 1997.

The hardest hit areas of the economy are the financial services, construction and manufacturing and many employees are settling for minimal increases or freezes in pay. Average earnings have only increased by 2.2% in May, June and July of this year – the lowest rates since 2001.