With the hangover from Christmas, many people across the UK turn to cutting back on everyday vices for their New Year’s resolutions to improve health, wellbeing, the environment and help balance the books. Sadly, many people soon give up on their New Year’s resolutions and go back to their old habits.  However, data from InvestorBee.com shows there’s an added incentive for people to keep up with their New Year’s resolutions: it will massively increase their savings potential this year.

InvestorBee.com’s data reveals that in 2011, Brits saved on average 9.9% of their salary, equalling £3,238 for the whole year for an average earner. But for example, by sticking with a New Year’s resolution to give up cigarettes, a 20-a-day smoker could have almost doubled their yearly savings with an extra £2,555 (or 79%) in pocket. Furthermore, if those extra savings had been invested, the ex-smoker could have seen this pot grow to £3,924 with a medium risk investment strategy, more than doubling their annual savings and bringing the total to £7,162, or 22% of total salary.

The table below shows how much Brits could have saved by sticking to their New Year’s resolutions throughout 2011, as well the results from investing those savings at various levels of risk.

Graham Mannion, managing director and founder of InvestorBee.com, says: “Many people start 2012 with good intentions, but find it all too easy to slip back into their bad habits. However, if people realised the economic potential of keeping up with their New Year’s resolutions, I think that they’d be surprised by how quickly such small incremental savings can add up.”

The effect of inflation

The data above shows how keeping up our New Year’s resolutions can generate significant savings. However, over the last few years inflation has risen by 8.9% (equating to an average yearly rate of 2.9%), which means that what would have cost £10 in September 2008 would cost nearly £11 in September 2011.

Mannion says: “This inflationary effect means that as well as goods getting more expensive, the value of an individual’s savings is falling in real terms after inflation. So even if an individual is able to keep up with their New Year’s resolutions, by putting the money into a regular cash savings account, they may be losing money. Until now it’s been difficult to get the facts to work out what alternatives are available for an individual’s savings, and what the upsides and downsides are for different options. That’s why we’ve launched InvestorBee.com, so people can really understand what has happened to their hard-saved money and make more informed decisions for the future.”

InvestorBee.com is a new service that will give people the information they need to take control of their money and set realistic saving targets. By opening up its database of the actual savings and investments of over one million individuals in the UK, InvestorBee.com will take the guesswork out of saving and investing. With this information at their fingertips, for the first time, users can benchmark their current savings habits and investment strategies against what other people like them are doing, make more informed decisions for the future and choose the savings strategies that are right for them.

To learn more about how people in the UK are saving and investing, visit www.investorbee.com

Notes to editors

The data comes from InvestorBee.com’s own database of more than one million UK investors.  Only counties with a representative sample have been included in the study.  Saving and salary data are based on the 12 month saving rates as at end September 2011.

The service provides a fact-based resource for investors looking to check financial advice or existing investment benchmarks. It is aimed at both those who use financial advisors, by helping them to ask the right questions and to set saving and investing targets, or those who operate independently, enabling them to invest money confidently.

Users can profile themselves against a database of more than one million UK consumers to see how their saving habits and investment performance compare to their peers, experience the trade-off between risk and return by setting up and tracking a virtual investment, and see how their money could be working for them. Users can subscribe for detailed information enabling them to benchmark the performance of existing investments, and to invest in one of four cost-effective, risk graded strategies

Graham Mannion, MD of InvestorBee, says: “When it comes to investing, consumers have been forced to rely on opinion. By opening our data to the public we’re giving them the simple and useful facts they deserve. Our aim is to help people get a better deal from an industry that has been complicated and confusing for too long. InvestorBee will shine a light to help consumers make smart and confident decisions about their savings and investments.”

InvestorBee data shows that after a 3 year period only 1 in 2,000 investors consistently outperform the average each quarter and the service aims to show users that good investing is about making sensible decisions rather than trying to hit the jackpot.

Many high-earning Britons are now being declined by mainstream lenders – often due to just minor blemishes on their credit files.

That’s the finding of specialist motor finance group The Funding Corporation which reports a sharp rise in the number of people who are “salary rich, but credit poor”.

The Chester-based group specialises in non-prime car finance for those with impaired credit records.

But this sector no longer comprises just low earners with poor repayment histories, according to the company’s Norman Beaumont:

“We have plenty of applicants from professional backgrounds who have been stunned to learn that a bank or finance house has refused them a loan,” he says.

“The cause might have been just a few missed payments on a credit card some years ago, but today that can be enough for some lenders to turn down their application.

“Being a high earner is no barrier to someone being classified as high risk,” said Norman who is sales and marketing director of ACF Car Finance, the group’s car sales division.

Professionals and senior managers with incomes well above the national average are among those now having to cast their net more widely for car loans, comments Norman.

In many cases, he says, the family’s main car is supplied via the business – so the person’s credit history isn’t revealed until they come to buy a second vehicle.

It’s then they receive the surprise news, sometimes from a prime dealership, that their application for car finance has been refused.

“Every day we are talking to people whose incomes, even after all outgoings have been deducted, could very easily accommodate a car loan,” said Norman.

“A few years ago, a few blemishes on their credit file might have been ignored – but now, many mainstream lenders are looking only for spotless borrowing records.

“The lenders with which ACF Car Finance works, including its parent The Funding Corporation, still apply strict lending criteria, but also look more closely at the reasons for any past difficulties.

“In many cases, these often don’t indicate a chronic repayment problem, but simply a blip which has since been remedied and is unlikely to reoccur,” added Norman.

ACF Car Finance operates a national network of car dealerships which supplies vehicles directly to customers who may have had difficulty in acquiring finance.

“It can come as a shock for someone who feels highly regarded in their professional life to find that their credit status is so low amongst lenders,” said Norman.

“But perhaps they can take some comfort from the fact that refusals are now very common – and that there are lenders out there which understand and can help,” he commented.

More information from www.ACFCarFinance.co.uk

Contact info
PR consultant Jon Boston
jon@jjbpr.co.uk

Guarantor loans may be the best bet for students and recent graduates who are struggling to get a loan and repay the debts they incurred whilst at university. Whilst it is not a great start to life after Uni, it needs to be sorted out which is where a guarantor loan can make the difference.

Leaving University is a time to rejoice for most students as it means they can finally put all of the knowledge they have gained to good use and start a new career in a field that they love. But what happens if you have built up extensive debts and let’s face it, unless you are fortunate enough to have wealthy parents who have paid for all of your student / university expenses, you will probably have a debt that will run into the high 4 figures at the very least.

This debt could prevent students from buying a property or even renting a property simply because the repayment on the debt is too onerous that it leaves nothing in the account each month, even if that student is working. Now in the recent past that would not have been a problem. A graduate could simply apply to the local bank and obtain a loan at decent rates and arrange a repayment period over a longer than usual period (to keep the repayments down) so that it becomes afffordable. Unfortunately, those days are gone…

How can a guarantor loan help?

Guarantor loans can help because they effectively ignore the credit history of the individual making the loan application. That means that if a graduate has just left university with say, £7k in debts and is desperate to pay it back but they can’t because they are trying to save up for a deposit on a new rented flat (phew! Life is tough for graduates!) then there is an opportunity for graduates to take out a loan but with a guarantor. This means that the guarantor (the person ‘endorsing’ the application and confirming that they are good for the repayment each month) will be the one who is credit checked, not the ex-student or graduate. The graduate will still receive the cash and they will still be the one making the repayments each month, the only difference being is that if the graduate cannot repay the loan for any reason, then that is where the guarantor steps in.

The other fantastic thing about guarantor loans is that they allow lenders to take on a little more risk. This means that if the person applying for the loan has a little bit of adverse credit such as a few late or missed payments and maybe a couple of defaults, then most guarantor loan lenders would be ok with this as they have a pretty good chance of getting their money back simply because the loan comes with a guarantor.

So instead of a traditional loan where a student or graduate may get declined, try the new option of a guarantor loan instead.

The domain was reserved almost 3 months ago and finally came to fruition on Wednesday 14th July 2010 when the domain extension was released around the world at 7pm GMT.

guarantorloans.co are a ‘no upfront fee’ loan provider and have an exclusive arrangement with one of the UK’s foremost Guarantor loan lenders. All applicants are treated with respect and there is complete transparency in all dealings with them so there will not be any nasty surprises down the line such as back end fees or other such charges that the client was not made aware of at the outset.

Service is quick and efficient and guarantorloans.co state that all applicants will have their cash within 4 working days of being accepted for a guarantor loan.

A guarantor loan is much like any other loan in that it is a sum of money borrowed by an individual repaid over a period of time. The loan itself is unsecured and this means that the lender lending the money has no security over the money they have lent out. In other words, if the borrower decides not to repay or can’t repay the loan, then they have no recourse or way of getting their money back, apart from the usual legal demands for full repayment. This is why this type of lending is considered to be risky from a lenders point of view.

It differs from a secured loan because lenders can apply to reposess a property in lieu of full repayment for the loan if the borrower defaults on the loan. Secured loans and mortgages are just two types of secured loans.

This is also why guarantor loans came into existence.

A guarantor loan works in exactly the same way as a traditional loan (mentioned above) but the main difference is that the person borrowing the money is not the same person that the lender is lending to. Confused? Read on for a more detailed explanation.

The borrower applies for the loan. The lender asks for a guarantor to endorse the application. This guarantor will be someone in full time work, employed, a homeowner and with a decent credit history. Most guarantors are family members, friends or other people well known to the borrower.

The lender then assesses the loan application on the ability of the guarantor to repay the loan, not the borrower. If all ok, the money is paid into the borrowers account and the borrower makes all of the repayments on the loan over an agreed period of time. Only if the borrower fails to make the repayments will the guarantor come into play. The guarantor is ultimately responsible for the loan meaning that if the loan is in default and needs to be repaid, then the guarantor will have to pay it, not the borrower. Likewise, if the case came to court, the court would rule that the guarantor is completely, 100% responsible for the loan, not the borrower.

Hence, any individual agreeing to become a guarantor will have to be aware that they are legally responsible for the good conduct and ultimately, the repayment of the loan. The initial applicant or borrower is simply someone who will be providing the bank details to pay the loan into…it is not their loan and under the guarantor loan rules, it never will be.

Guarantor loans are increasing in popularity and yet whilst they were a popular feature of the mortgage market (particularly in the 1980’s with rapidly rising house prices) they were almost unknown in the loans industry until about 18 months ago.

One of the reasons for this surge in popularity in guarantor loans will be down to economics and in particular, the global liquidity crisis which has seen banks and other major finance providers tighten their criteria to make it almost impossible for certain members of society to obtain a loan, or even worse, they have withdrawn their lending facilities altogether.

However the credit crunch has done a lot more than just get lenders, banks and other finance institutions to tighten their criteria. Their new lending stance has actually placed a whole subset of society into the box marked “Do not lend to” and this in itself brings a whole new set of problems.  The subprime credit crunch is well documented but in a nutshell, lenders were lending money to people with credit problems, however (and contrary to popular thought) this was not just a case of lending to people who would not (or had no intention of) repaying their loan, subprime lending was also for people who perhaps hadn’t been in employment very long, or who couldn’t prove their income or in some cases, because they may have missed one or two credit card payments. Either way, these types of borrowers hardly presented a huge risk to lenders as the vast majority repaid their loans on time every time.

Unfortunately, when the subprime crunch became public, it was a case of seeing which lender could restrict their criteria the quickest and for some it was already too late as they went to the wall. Those lenders that remained decided upon drastic action, the main thrust of which was to label “prime” borrowers as “subprime”. To clarify; some borrowers who had a few late payments on a loan or credit card would be classed as prime because they represented very little risk. Now lenders have re-classified those same borrowers as subprime because in this new post credit crunch world, unless you have an A1, first class credit history with absolutely no blips on your file, you will be classified as a risk, especially with something like an unsecured loan.

So what is the solution?

Well, guarantor loans appear to fill the void that the credit crunch has created in the lending sector. They work on two levels and are a definite “win-win” for both the borrower and the lender and here is why.

Borrower

A borrower who is unlikely to be accepted for a loan by anyone else (more details on why further on) can apply for a guarantor loan safe in the knowledge that as long as they can get someone on their side to ‘vouch’ for their loan application, then they are pretty much guaranteed to get accepted.

Lender

Lending money on a guarantor loan is as risk free as it gets with an unsecured loan. Unlike a traditional unsecured loan where the application is assessed and underwritten on the borrower, a guarantor loan is assessed on the guarantor – not the borrower. As the guarantor will have a decent credit history, it means that the lender has a far better than average chance of getting paid each month for the loan. The other major thing to note about this type of unsecured lending is this: Most guarantor loan companies like www.anytypeofloan.co.uk will restrict lending to a new borrower to £3,000. Of course once they are an established client the limit will rise to £5,000 but for a first timer it will be capped at £3,000. This means that if the borrower does default on their repayments, the lender will revert to the guarantor and ask them to repay the rest of the loan on behalf of the borrower, after all, that is what they signed and agreed to.

The great thing about this from the lenders perspective is that the guarantor is unlikely to refuse a request for payment because if they do, it will severely affect their credit profile and they could end up with their credit score being destroyed by this one simple act.

So, the vast majority of guarantors will just pay up and even if they haven’t got the cash to hand, capping the borrower’s loan at £3,000 means that if push came to shove, they could repay the outstanding debt on a credit card or through an overdraft extension. Anything in fact to avoid having their credit history affected.

This is one of the major attractions of a guarantor loan and is another reason why lenders are so keen to lend money on this type of scheme. It works for borrowers, it works for lenders and everyone is happy.

The final thing to note is the charging structures involved in this type of loan. There are lots of firms offering guarantor loans online who charge clients an upfront fee, just for the privilege of applying online, even though there is no guarantee that you will be accepted for a loan. You should always avoid this type of broker and ensure that you only deal with a broker that offers their full trading address, their consumer credit licence (CCL) number and a UK telephone number for you to call them with any issues, problems or queries, either before or after your enquiry.

Remember, all brokers and websites on the internet must display a valid consumer credit licence and this licence must be in the name of the company trading style so if the website is called guarantorloans4u.com, then their CCL must also have that exact name otherwise it is a criminal offence. Unfortunately, the popularity of guarantor loans has led to an increase in bloggers and other sites that do not have the relevant permissions or licences. To check out the company you are looking to deal with, search on the OFT website to ensure they have a valid CCL.

Guarantor loans from www.anytypeofloan.co.uk

Usually, loan enquiries reduce during the period of a major event such as the Olympics or World Cup but the reality this time is somewhat different as enquiries have actually increased for anytypeofloan.co.uk since the start of this major football event.

Anytypeofloan.co.uk work with a lender who can provide guarantor loans to individuals and in some cases, can even offer unemployed applicants a loan as long as they have a guarantor who is at least 21, a homeowner and with a fairly decent credit history.

Paula Harrison, Director of anytypeofloan.co.uk commented: “There appear to be a number of new entrants into the guarantor loans market and I am sure there will be more. We have been providing guarantor loans since 2008 and have built up a great reputation in this market as people know that we will never charge them a fee. Even though the OFT decided not to impose any restrictions on what interest rates short term lenders and loan companies can charge, we believe that the customer still pays enough for a guarantor loan which is why we are committed to never charging fees.”

We are not yet able to release details as we are under a press embargo but two of the lender principle’s are familiar names within the industry and the third lender is a relative newcomer although they are experienced in another sector of financial services.

This will be a welcome addition and will offer beleagured brokers more options and hopefully higher LTVs to add to those products already provided by Blemain, Nemo and Link

The review looked at home credit, pawnbroking,  payday loans and the rent-to-buy market.

One of the more recent entrants to the high-cost credit market – payday loans – has come under fierce criticism from campaign groups and MPs. Some charge interest rates in excess of 2,000%, a factor that prompted the Archbishop of Canterbury, Rowan Williams, to call for “an urgent review” of such rates two years ago. At that time, Debt On Our Doorstep, a coalition of debt charities and credit unions, tabled a motion in parliament calling for an investigation into payday loans.

The OFT said today that it had considered the case for price controls for pawnbroking, payday loans, home credit and rent-to-buy credit and concluded they would not address the problems in the sector. It said such controls could further reduce competition in the sector and lead lenders to recover lost income through increasing charges for late payment and default.

It said, instead, that it was recommending improvements to the way the markets operate, including an industry-wide code of practice and more information about such loans to be published on price comparison websites. Some of these, such as Moneysupermarket.com, actually sell payday loans.

Ray Watson, OFT director of corporate services credit, said: “Our report has found that people who use high-cost credit have limited options and find it difficult to exercise what choice they have to obtain the best deal.

“This means competition between suppliers is less effective than it might be. The recommendations we are making would deliver worthwhile improvements to these markets but more radical approaches, outside the remit of the OFT, need to be examined by the government if the fundamental and long-standing issues of lack of consumer power and limited supply are to be tackled.”

Mick McAteer, founder and director of the Financial Inclusion Centre, said he was “deeply disappointed” by the OFT’s findings. “There is no justification for a failure to impose price controls in this sector,” he said. “We were hoping to see a cap on charges phased in over three years while social lenders build up their capacity to offer alternative forms of finance.”

Social lenders include businesses such as Fair Finance, which offers financial products and services to the financially excluded in London, and credit unions.

The Finance & Leasing Association, the trade association for the asset, consumer and motor finance sectors in the UK, said it agreed with the OFT’s findings on price controls. Head of consumer finance, Fiona Hoyle, said: “They would have adverse unintended consequences for consumers, including for the cost and availability of credit.

“We hope that the government will take careful note of these arguments against price capping when it considers the credit and store card markets.”

Commenting on the report, independent consumer body Consumer Focus said that “simply clamping down on high cost lenders will not provide the answer”.

“The OFT’s report shows that it would be very hard to boost competition among high-cost lenders and drive a better deal for consumers,” said Marie Burton, financial services specialist at Consumer Focus. “It is therefore important that the government considers how it can make sure that lower-cost borrowing, like credit unions, is available to borrowers on low incomes.”

A report this week revealed up to 67,000, or 7%, of those struggling with debts say they have already contacted a loan shark or doorstep lender, while a further 13% have considered doing so.

Steven Law, president of R3, the trade body for insolvency professionals that commissioned the research, said: “Going to this source for financial resolution will simply build up a larger store of debt and create more pressure and stress.”

Original article here.