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Debt Collection News Roundup – December, 2017

Here at Access Credit Management we pride ourselves on keeping up to date with what’s going on the international debt collection industry.  We aim to bring our readers interesting and relevant news about the sector so once a month we publish a News Roundup.  This should keep you up to speed with all the important happenings in the industry and provide you with a valuable resource that that you can use to stay fully informed of all the latest news. 

It would be interesting to know what you, the readers, think of the stories that feature here.  You can let us know by email or by commenting on our Facebook Page or on our Twitter feed.

The former Universities Minister who raised tuition fees to £9,000 per year is set to urge the UK government to end the three per cent above inflation interest rate on repayments which adds around £3,000 to student debts on graduation and an additional £13,000 on average by the age of 40.  Lord Willetts has questioned the viability of a system which results in students having tens of thousands of pounds worth of debt, a large proportion of which is never expected to be paid back.  Lord Willetts revealed that he hadn’t expected inflation to hit 3% when devising the mechanism used to calculate the interest rate applied to student debt, saying this was designed to reclaim money from the more affluent graduates.  He now advocates the return of maintenance grants for the least affluent students in the UK.

The above news items comes at a time when new analysis suggests that graduates will be facing pension savings that are tens of thousands of pounds smaller as a result of their student loan repayments.  Tuition fees of at least £9,000 result in the average student facing debts of around £50,000 which has serious implications for their long term wealth.  The lack of disposable income faced by those repaying student loans makes it more difficult for them to save for the long term meaning they could end up with pension pots 20% lower than the levels of those graduates who enjoyed a tuition fee free education.

According to the Shadow Chancellor, John McDonnel, the increase in average household debt is set to continue for the next four years.  Labour is warning that unsecured borrowing could exceed £19,000 per household by 2022, claiming that average household debt has risen from £10,921 in 2010 to £14,426 in 2017.  The government claims to be helping working families to earn more and keep more of what they earn by cutting taxes, increasing basic pay, freezing fuel duty and helping first time buyers onto the housing ladder.  This news comes at a time that the Resolution Foundation, an influential research group, is predicting that although the UK’s pay squeeze is set to end next year, a meaningful rise in wages remains out of sight.

To conclude this month’s News Roundup, we’ll leave you with the news that debt collectors were called in to chase the parent of a six year old boy for a library fine of £35!  A mum in Kent revealed that two books borrowed two years earlier had resulted in a letter from a recovery service seeking £25.10 in fines plus an administrative charge of £10.