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Debt Collection News Roundup – February, 2019

Here at Access Credit Management we keep up to date with what’s going on in our industry so that we can bring our readers interesting and relevant news in a monthly News Roundup.  This should keep you to stay informed about the important developments within the sector so that you have a resource that keeps you fully informed of all the latest news.  It would be interesting to know what you, the readers, think of the stories that feature here and if you have any news you’d like us to cover, why not get in touch via our Facebook page or on Twitter.

Our first item concerns the revelation that the current young generation is the first one to earn less than the previous generation and many of these Millennials are beginning their working lives already burdened with debt.  This generation faces a world of expensive housing costs, intense competition for jobs, low wages, zero-hour contracts and a rapidly increasing cost of living.  Alongside this, these youngsters are always connected (online, rather than with the mobsters) and they are being constantly pressured by social media and marketers to spend more.  According to the Financial Conduct Authority, the “pronounced build-up of indebtedness” of this generation is not caused by reckless borrowing, but the affordability of basic living costs.  This is a gloomy outlook for a whole generation of Britons.

Meanwhile the Russell Group of Universities, in collaboration with the Money Saving Expert (MSE), are piloting a redesign of student loan statements for students, parents and those in the higher education sector to test out.  Claiming that current statements of a student’s outstanding debt with interest added are dangerous and misleading, the Russel Group and MSE plan to present their findings to the government in a bid to change the current student loan statements and ensure that in future they focus on the actual repayments that students have made and what they are likely to pay in future.

UK council debts are well on the way to reaching a massive £100 billion and borrowing continues to show no signs of slowing down.  The rise in this type of debt has occurred largely due to the way that UK councils borrow money.  A council official makes a call to the Public Works Loan Board (PWLB - a department of HM Treasury) stating how much they want and over what term.  There is no requirement to explain what the loan is for or how it will be repaid and within two days, the money is transferred!  UK local authorities are given free rein in determining how much they can borrow and the system depends on self-policing.  Local councils across the UK have seen funding from central government reduced by 60% since 2010 and, with more cuts planned, the situation is likely to get worse, rather than better.  This is likely to become an issue to be discussed at Parliament in the coming months as a Conservative MP is calling for legislation that would curtail the use of PWLB funds to buy commercial property.