Student loan debt IS
now considered when applying for a mortgage, throwing graduates' home ownership
plans into jeopardy.
Despite recent advice suggesting otherwise, graduates will
now have their student loan debts included in the affordability calculation for
a mortgage. The Financial Conduct Authority’s Mortgage Market Review guidelines
will force all mortgage lenders to consider student loans as a committed
expenditure, greatly reducing the amount they are likely to offer. Alexander
Burgess, British Money director and a former MBA student, said: 'There appears
to be a common misconception among students that anyone who has taken out
student finance will have their loan discounted, but this simply isn’t the
case... Universities infer it’s not considered to be a debt, credit rating
firms are swerving the subject on whether they’ll access student loans records
and financial sites such as Money Saving Expert suggest “student loans do not
go on credit files”.’ In the current academic year, university fees can be up
to £9,000 per annum, not counting accommodation and cost of living, meaning
debts of tens of thousands of pounds for students. Burgess added: ‘This is
penalising a whole generation who are already saddled with unrealistic
proportions of debt just because they have career aspirations that can only be
fulfilled through higher education... Graduates have loans for an education
that a few years ago was free, but are now less likely to secure a mortgage.” DAILY MAIL
Boris Johnson calls
for massive council tax rise for owners of empty homes
Boris Johnson has called for "at least" a tenfold
increase on council tax for the owners of empty homes to help to tackle
Britain's housing crisis. The London mayor said he was urging London boroughs
to "whack up" tax on property owners who allow their homes to stand
empty for more than a year. Speaking on his Ask Boris show on LBC Radio,
Johnson praised Labour-controlled Camden council for charging 150% council tax
rates on homes that have been empty for more than two years. He claimed it was
the only London borough to use the power, and urged others to do the same. But
he went further by calling for a change in the law to allow councils to impose
punitive 1,000% rates on the owners of vacant homes. Johnson said: "What
is certainly not acceptable is people buying homes as assets and then keeping
them empty in Kensington and Chelsea or Westminster or wherever as a sort of
bank balance in the sky. That is no good. What we are saying to councils, who
have powers to impose punitive council taxes on such people, is do so. Whack up
the council tax." Johnson acknowledged that building more houses was the
only way to make homes affordable, saying “The only answer is to build hundreds
of thousands more homes." GUARDIAN
Losing out on
£2,500-a-year: How the new state pension will leave millions of workers rich
and poor worse off
Workers earning as little as £5,772-a-year stand to make
more from the existing two-tier system of basic state pension and second state
pension (S2P - the state earnings-related pension), than they would under the
new flat-rate state pension being introduced from April 2016. The Government
has championed its single-tier state pension as 'fairer and simpler' than the
complicated system currently in place, but it will be public sector workers and
the self-employed who benefit the most, while private sector workers both rich
and poor will lose out on potentially tens of thousands of pounds in
retirement. Someone earning just £5,772-a-year with 30 years of National
Contributions and S2P entitlements would get, based on this year's numbers, a
basic state pension of £113.10 plus S2P contributions of about £53-a-week, a
total of £166.10-a-week. The new single-tier pension is expected to be worth
around £155-a-week by the time it is introduced, providing £11.10 less than
this a week, or £577 a year. Someone earning £30,000 meanwhile with 30 years of
S2P accrual would be entitled to around £185-a-week under the existing system,
an extra £30-a-week or more than £1,500 extra every year. The worst off will be
those accruing the maximum amount of S2P - people on £40,040 and over - who
would have been entitled to £200-a-week in retirement, some £2,530-a-year less
than they stand to get under the new system. DAILY MAIL
British retailers set
to take on payday lenders with employee credit union that will offer cheap
loans
In a bid to offer an alternative to the hefty interest rates
charged on payday loans, New Look and Next are among names to have signed up to
RetailCure. The credit union is for people working in the retail sector. RetailCure
is expected to charge interest from roughly 7 per cent to nearly 28 per cent
depending upon the borrower's credit history. People who borrow £400 over 30
days from a payday loan firm are stung with an interest fee of around £127,
while the same loan would cost just £8 from the credit union. Veteran retailer
John Lovering, who has led buyouts of companies including Debenhams, Homebase
and Somerfield, will chair the organisation, which is set to be launched later
this year. He told Sky News: 'The industry feels that we have to find a way of
providing a source of cheap, reliable credit for our people... The three
million in retail and the nearly five million in the wider industry do have a
need for low-cost, value-for-money, short-term borrowing facilities, and that's
what we as an industry are trying to provide.' DAILY MAIL
In June 2014 Parliament started debating a key change to the nation's pensions, the "Pension Schemes Bill". According to the Department of Works and Pensions' press release, "Public backing means full steam ahead for pension reforms".
