Some of our biggest lenders continue to cover themselves in shame. Having lent riotously before the credit crisis, they now find any excuse not to. This week, it’s parents who should watch out. As Anna Mikhailova warns in The Times, anyone who has had a child recently may find their ability to borrow curtailed.
For example, Yorkshire Building Society has automatically reduced the amount someone can borrow by 15%. It’s a similar story at ING Direct. Fortunately, no such reductions currently apply at Virgin Money or NatWest and the reduction is less dramatic at HSBC.
The message? Do your homework before applying for a mortgage, as being turned down can affect your credit score and jeopardise future applications.
• Last week marked the 200th anniversary of Jane Austin’s Pride and Prejudice. And according to Scottish Widows, our views have changed a bit since then. Eight out of ten parents would now advise their daughters to get a good education and a secure job. Only 7% would suggest they marry well instead. Indeed, today’s parents are more concerned that their sons marry well to achieve financial security.
• This is also “Spot the Dog” week, notes Patrick Collinson in The Guardian. According to financial advisers BestInvest – who compile the bi-annual report on poorly performing funds – the worst-performing fund management houses over the last three years are Scottish Widows, Blackrock, Baillie Gifford, F&C and Jupiter. The best include JP Morgan, Axa, M&G and BNY Mellon/Newton. The worst market for funds over the last five years has been China: “a graveyard for investor expectations”.
• “I totted up how much interest I’d paid and felt physically sick,” says actress Samantha Womack in The Daily Telegraph. Her mistake? Over-using credit cards, says Richard Evans. If you rack up a £23,000 debt and pay the minimum off each month, but allow the rest to roll up at a rate of 18% (a conservative estimate), the debt will double in ten years.
How can you avoid this? Sensible budgeting and keeping costs down is key, and if you do use a credit card, remember the golden rule: don’t use short-term loans to cover longer-term debt repayments.