In a new research from Scottish Widows, half of all men questioned about their “financial IQ” rated it as “good” or “excellent” (49%), but just a third (34%) of their female counterparts reported the same confidence when it comes to their financial intelligence.

When it comes to the nation overall, the survey suggests that nearly half (45%) of Brits feel their financial IQ is “OK, but could be better,” one in ten (10%) rate their financial IQ as poor, and 2% say it is ‘”non-existent.”

Those Brits who worry about their finances spend an average of 11 hours a week doing so, which could equate to more than a working day each week – or 24 whole days a year. In the battle of the sexes, the survey founds that men spend more time worrying about their finances than women (12 hours vs. 10 hours per week).

The survey also shows that young people worry the most about their financial futures, with those aged 18-34 spending 13 hours per week worrying, compared with 11 hours among 35-54 year olds and 9 hours among those aged 55 and over.

Personal finance journalist Rosanna Spero said:

“Men appear to be much more confident when it comes to their money know-how, rating themselves as being financially “fitter” than women. But irrespective of whether you’re male or female, as a nation it seems we’re simply not that confident when faced with issues such as financial products, as well as our understanding of the current economic situation.”

Gross mortgage lending in February increased to an estimated £9.2 billion, according to the Council of Mortgage Lenders. The figures represent a 6% rise from £8.7 billion in January.

An increase in lending in the shortest month is unusual, according to the CML. but was not unexpected, due to the coming to an end of the stamp duty holiday, which distorted lending figures considerably in both December and January.

Lending in February was down 6% on £9.7 billion a year earlier, but the first two months of this year are broadly in line with the CML’s forecast for lending of £150 billion for 2010 as a whole.

In today’s market commentary, CML economist Paul Samter commented:

“As we look forward, we expect emerging signs of improvement as confidence in the economy grows and we move past the election. However, the need for the authorities to address fiscal deficit will inevitably slow the economy. At the same time the funding markets, while certainly better than a year ago, remain difficult and will limit the flow of available housing finance.

“Given the short-term weakness and distortions in the housing market, as well as more properties coming onto the market, it was perhaps unsurprising to see falls in some of the monthly house price indices in February. With activity unlikely to pick up much in the short term, we would expect to see continuing price fluctuation in the coming months.”

Results of a poll undertaken by uSwitch.com has revealed that consumers have adopted a ‘buy now, pay later’ strategy, with one in ten Brits living beyond their means. This means that 5.4 million adults spend more than they earn, up from 4.8 million in 2008. Furthermore, 26% of adults only just break even at the end of the month, whilst 53% have less than £100 left in their bank account after paying for all their utilities.

And with spending cuts and tax rises expected after the General Election, the effect on the gap in household budgets could be devastating uSwitch.com warn. In fact, despite reports that the economy is on the mend, 15 million consumers (31%) believe that they will be worse off this year than last.

The study into the nation’s spending habits also reveals that, like the Government, consumers are turning to borrowing to plug the gap between income and outgoings. Of the 5.4 million living beyond their means, 48% use overdrafts, 34% use credit cards and 19% borrow from friends and family to make ends meet.

Meanwhile, despite the economy being on the mend, over 16 million workers (57%) do not expect a pay rise this year, and those who do can expect a rise of just 1.9% – a net monthly increase of just £27.
Against the backdrop of inadequate pay rises, there are no clear signs of a let up in living costs. Motorists are bracing themselves for record petrol costs after the AA reported that prices could hit £1.20 a litre within the next few weeks. The reports place further pressure on the Government not to go ahead with a proposed 3p hike in petrol duty on 1st April.

Ann Robinson, Director of Consumer Policy, uSwitch.com, said:

“The economy may be on the mend but millions of consumers are still struggling to make ends meet. People will be looking to the Chancellor to help ease the burden through his next Budget. Instead there is a danger that he will take more money out of our pockets.

“It’s a catch 22 situation – the Government needs to put forward measures to reduce the public deficit but there is every possibility that these will directly impact household budgets.

“Consumers are working hard to stay afloat but it’s a struggle. Wages are not keeping up with living expenses. Short-term debt solutions may be an easy way to fund spending but they can lead to severe debt issues if not managed properly. Rather than continuing to plug the hole by borrowing, consumers need to work harder to strip down their essential bills to the bare minimum. This is crunch time for UK households.”

Latest figures from unbiased.co.uk reveal that that 42% of mortgage enquiries last month were from first-time buyers, following on from a 43% market share in January.

Other significant advice drivers in February 2010 included remortgaging, with nearly a third of consumers (32%) searching for a whole of market mortgage adviser who specialises in remortgage advice. In addition, just over one in five (21%) of all searches on the ‘find a mortgage adviser’ search were by consumers looking for residential property advice.

Karen Barrett, Chief Executive, unbiased.co.uk, said:

“It is encouraging to see first-time buyers are back out in force looking to get their foot on the property ladder. Especially as they’ve been given a helping hand by those lenders who’ve now re-introduced competitive mortgage rates on high loan-to-value products. This is a positive move, which suggests lenders now have a renewed appetite to compete at the bottom end of the market, after first-time buyers were all but shut out by banks almost two years ago. Hopefully we may see more lenders follow these footsteps, in which case 2010 could turn out to be the year of the first-time buyer.”

A study by Aviva UK Health has found that business owners and workers are dubious about how the government’s Fit Notes initiative will be brought into effect next month, and question its power to reduce absence rates in the workplace and get employees back to work sooner.

The launch of the new Fit Note means that instead of giving patients a sick note saying they are too ill to work, GPs will have to decide whether a person may be fit for work with some support, and what employers can do to help them return. This includes a phased return to work, altered hours, amended duties or workplace adaptations.

The initiative is designed to encourage employers to be more responsible regarding employee rehabilitation. It aims to help reduce the impact long term sick leave has on UK businesses, which is estimated to cost the UK economy £17.3 billion. However, Aviva’s research indicates that both employers and their workforce currently remain to be convinced of the benefits of Fit Notes.

Among the 500 employers questioned in the ‘early intervention prevention’ study, just 5% said they thought Fit Notes would reduce absence rates. One in ten thought they would be hard to administer and 68% had little or no knowledge of the change and how it would work for them. On the employee side, the majority of the 1,000 respondents (57%) did not think their doctor was in a position to say if they are fit enough to work.1 This is a view shared by GPs with nearly two thirds (64%) feeling ill-equipped to provide Fit Notes for the UK workforce. A further 15% were non-committal.

The study suggests that there is a major communications issue to address before Fit Notes can begin to have a positive impact on absence rates. Success of the scheme hinges on GPs being prepared to comment on the functional impairment that their patient has, as well as employers being flexible to adapt the role or the workplace in the short-term. However, the study suggests there is little evidence that this is currently the case.

The research also indicates that employees who don’t have a full understanding of the process may feel Fit Notes could be used to get them back to work too early or even as grounds for dismissal. If left unchecked, this could foster a culture of suspicion or lead to an increase in workplace presenteeism.

Dr. Hugh Laing, Chief Medical Officer for Aviva UK Health and a practising GP, said:

“Any move on behalf of the Government to get people back into the workplace is commendable. However, we are concerned by the apparent lack of awareness of Fit Notes among employers and their workforce. The move from sick notes represents a big change for businesses and will take time to embed.”

The latest mortgage lending data for the UK has been published by the Financial Services Authority (FSA).

The data, which includes the last quarter of 2009 reveals that the total value of outstanding loans is now £1,027 billion – an increase of 1% on the year before.

The FSA’s figures also show that lending for house purchases accounted for 62% of new advances and 63% of new commitments in the last quarter, with advances for the quarter totalling £41 billion and commitments for the quarter totalling £36 billion.

The proportion of new lending done at an Loan To Value (LTV) of more than 90% accounted for less than 2% of new advances for the second quarter in succession, down from 6% in Q4 last year. The use of combinations of high LTVs and high income multiples also continued to decrease, and accounted for less than 1% of new lending in Q4.

Meanwhile, the proportion of loans to borrowers with an impaired credit history was little changed during Q4 2009, at 0.4%, whilst the number of new arrears cases has reduced in each quarter of 2009, and was down by a further 9% in Q4 2009, to 41,000.

The total number of accounts in arrears had fallen to 378,000 by the end of 2009, a decrease of 4% in the quarter, and is similar to the level at the end of 2008. The proportion of the residential loan book that is in arrears, and hence not fully performing, fell for the second successive quarter, to 3.42%.

The FSA report also highlights the fact that the number of new possessions totaled 11,800, a decrease of 15% on last quarter and the lowest figure since Q2 2008.

An article in Economic and Labour Market Review, analysing spending data results from the Living Costs and Food Survey, has found that the level of income inequality between the highest-spending fifth of households and the lowest spending was lower than the gap between the top and bottom 20% of households and their income.

The article authors found that the proportion of single parents and couples with children was lower at the bottom of the distribution on expenditure compared with the income-based distribution. Similarly, people in full-time education were much less numerous in the bottom quintile of the expenditure distribution than they were in the bottom quintile of the income distribution.

The analysis also found that on average, households in the bottom two deciles had higher spending than income, suggesting that people in these groups are sustaining their expenditure in other ways, such as borrowing or making use of savings. Analysis of those households where expenditure was twice or more their income showed that a high proportion were headed by young people – in all, 11% of these high-spending households were headed by someone under 25, compared with only 4% of all households.

Asked how they funded their spending, high expenditure households were most likely to cite savings (32%), followed by overdraft (19%) and credit or store card debt (15%).

New rights for Britain’s credit card users that will save consumers millions of pounds and give people more control over their finances have been announced by Prime Minister Gordon Brown.

There are five new rights in total, and they are as follows: right to repay, right to control, right to reject, right to information, and right to compare. Right to repay means that repayments will always be put against the highest rate debt first. Right to control will ensure that consumers have the right to choose not to receive credit limit increases in future and the right to reduce their limit at any time. Right to reject will allow consumers to have more time reject increases in their interest rate or credit limit. Consumers at risk of financial difficulties will be given advice on the consequences of paying back too little through the right to information, whilst through the right to compare, consumers will have an annual statement that allows for easy cost comparison with other providers.

In addition, consumers who are at risk of financial difficulties will be protected through a ban on increases in their credit limit as well as the ban on increases in their interest rate, and card companies will work with debt advice agencies to agree new ways they will provide targeted support to consumers at risk.
The new rights were secured in an agreement between the Government and the credit and store card companies negotiated in the light of feedback from thousands of consumers to a Government consultation on credit cards. The key changes will be introduced by the industry this year and given statutory force as soon as possible.

Gordon Brown said:

“Step by step, we are reinventing the financial services industry after the global financial crisis and moving the balance of power back towards consumers. These new rights will put an end to the irresponsible lending practices that people have been most concerned about, and help cut the cost of borrowing.”

The Government estimates the new rights will save consumers almost £300 million a year and one industry forecast predicts customers will gain around £500m.

Young people aged 18-24 appear to be taking advantage of overdraft facilities offered by providers by taking out multiple current accounts, research by Callcredit Information Group (CIG) has found.

Almost one in ten (9%) adults aged 18 – 24 years admits running three or more current accounts with overdraft facilities and 27% of 18 – 24 year olds who have more than one account admit to using more than three different current account providers.

CIG’s research also indicates that 9% of British adults over-inflate their income when applying for credit in a bid to secure a higher credit limit, with 6% of those surveyed acknowledging that they have applied for credit knowing they might not be able to meet the repayments.

The research also revealed one in four mortgage holders would default on their mortgage if their monthly income dropped by just £300, with this rising to three out of ten (32%) among the 44 – 54 year old age group.

Graham Lund, Managing Director, Callcredit Information Group, said:

“While the end of the recession may be in sight, it seems that many consumers continue to struggle in managing their finances. What’s particularly concerning is the proportion of young people who appear to be targeting multiple providers for access to multiple overdraft facilities. Lending and borrowing responsibly to ensure affordability is vital for the recovery of the economy and lenders need to have a complete customer view – not only of accounts held with them but externally too – to ensure a consumer is not overburdened with credit.”

Date released by the Council of Mortgage Lenders shows that, in January, house purchase loans fell by more than three times the decline in remortgages, demonstrating the effect that the end of the stamp duty holiday in December has had on the mortgage market.

There were 49% fewer house purchase loans in January than in December but only 15% fewer remortgage loans. However, the 32,000 loans for house purchase, worth £4.7 billion, were up from the low of 23,000 (worth £3.1 billion) seen in January 2009. Conversely, the 24,000 loans for remortgage, worth £3 billion, were down from 45,000 (£6.2 billion) a year ago. This is the lowest monthly level of remortgage activity – both by number and value – in eight years of available data.

The group to see the largest drop in house purchases was first-time buyers, with a fall of 54% (55% by value) from December to January – reflecting the fact that a high proportion would usually fall into the £125,000-£175,000 property value category and rushed through their purchase to complete in December.

There were 11,300 first-time buyer loans, worth £1.3 billion, in the month, down from 24,800 (£2.9 billion) in December 2009, but still up from 8,600 (worth £900 million) in January 2009.

Following a 63% increase in the number of first-time buyer transactions for properties in the £125,000-175,000 band in December, the number of equivalent transactions fell by 80% in January – to account for just 19% of all first-time buyer loans, down from a record 42% in December. Compared to a year earlier, the number of first-time buyer loans in this category was down 22%.

A similar picture can be seen amongst home movers. This group saw a 49% increase in transactions in the £125,000-175,000 category in December and a 71% drop in January – while transactions across the other price bands fell by a more modest 36% in the month.

Commenting on the data, CML director general Michael Coogan said:

“It was a quiet start to the year. Lending volumes in January were low, but we had predicted this would happen due to the end of the stamp duty holiday distorting December’s figures.

“When December and January data are taken together, they show little change in underlying market conditions compared with recent months, with activity still slow but well up on the lows of a year earlier. We expect lending over the coming months to remain weak as uncertainty over of the state of the economy and the upcoming election are likely to continue to hold back housing market activity.”