PricewaterhouseCoopers released a report this week after surveying just fewer than 4,000 people in their “Credit Confidence” survey.

The results of the survey show that more than 1 in 4 people are worried about their ability to repay their debts in the future, but very few of the 16% already struggling to repay are considering how to deal with these debts. This isn’t a problem for just one sector of society – as the report highlights that falling property prices have caused the wealthy to be facing debt issues as well as those that are less well-off.

What is worrying however is the fact that those who are worried about repaying their debts are not necessarily seeking help and guidance in how to best repay them. It is vital that you seek help if you are burdened by debt and fear that you will not be able to repay your creditors. Organisations like the Consumer Credit Counselling Service (CCCS) have a free phone number on 0800 138 1111 where debt counsellors can provide you with free and independent advice on the best way forward. CCCS also has a web based tool called Debt Remedy which can help to provide a solution if you are worried about your finances.

Let’s now review the other top money stories of the past week commencing the 1st December 2008.

Monday 1st December

Royal Bank of Scotland delays repossessions - Royal Bank of Scotland (RBS) announced today that they will give homeowners who have fallen behind on their mortgage repayments a six month ‘grace period’ before they pursue repossession. This is double the three month ‘grace period’ that was announced last week in the Pre Budget Report. This is good news for homeowners and it should affect many of you as RBS are the fourth biggest mortgage provider, with 7% of the UK mortgage market. The fact that RBS have taken this step may also put pressure on HBOS, the market leader, to follow a similar route.

Mortgage lending falls further - The latest figures released from the Bank of England show that the number of mortgage approvals fell again in October with just 32,000 being approved. This drop represents a 74% drop since this time last year. Sir James Crosby, former head of HBOS has warned the government that in 2009 the number of mortgages approved may fall further unless the government took steps to improve banks’ abilities to raise funds to lend to homebuyers.

London Scottish goes into administration - The Manchester-based London Scottish bank went into administration today as the Financial Services Authority stepped in to stop it accepting deposits. The Chancellor, Alistair Darling has taken the extra step to exceed the £50,000 compensation limit as he has said that all customers of the bank will have their deposits protected.

Thursday 4th December

Further support for struggling homeowners - The government announced last night, in the wake of the Queen's Speech, a £1bn bailout for families who are struggling to meet their mortgage repayments. Homeowners with a mortgage of up to £400,000 with less than £16,000 in savings will be able to defer interest payments on their mortgage for up to two years, if they experience a significant fall in income during the economic crisis. It is thought this could help 9,000 homeowners. These dramatic plans come after the Council of Mortgage Lenders (CML) has forecast repossessions to reach 75,000 in 2009, up from the 45,000 repossessions seen this year.

So far it has been reported that HBOS, Abbey, Nationwide, Lloyds TSB, Northern Rock, RBS and HSBC have agreed to these measures in principle, which would allow their customers to negotiate deferrals of up to 100% of their interest payments. This deferred interest will then be added on to the borrower's outstanding balance. The government has agreed to foot the bill to the lenders if those who defer their interest do not cover their payments. Regardless of whether your lender is listed above or not, if you are experiencing problems meeting your monthly repayments it is vital that you speak to your lender as soon as possible. The government has been very vocal recently in announcing the steps that lenders must make before they pursue repossession, so if you are having financial problems speak to your lender to find out what other options are available.

Interest rates are cut again - The MPC of the Bank of England met today and cut interest rates by 1%, bringing them down to 2% - a 57 year low. Many commentators have praised this cut of interest rates as an essential move in trying to slow the economic downturn. However there is a degree of uncertainty as to whether lenders will pass on these cuts, after 75% of banks and building societies failed to pass on the full benefit of last month's 1.5% drop in interest rates. The Confederation of Business Industry (CBI) said it is critical that banks pass on this cut in interest rates to businesses and individual customers.

Friday 5th December

More job losses announced – There were more job losses announced this week from the retail and banking sectors. If you have recently lost your job or you fear that you may in the near future, it is worth looking at the “When Things Go Wrong” section on the Moneybasics website.

House prices continue to fall – House prices continued to fall in November, which means that house prices are down by 16.1% in the year to November. This drop has meant that the average value of a home is down £32,000 to £163,605, a level not seen since July 2005. As house prices have continued to fall they have pushed more and more homeowners into negative equity, as the value of their home falls below the value of their mortgage.

Prepared for Moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).