Selling your endowment policy 'could help meet debt management needs'

An increasing number of Britons are defaulting on their credit card repayments, numerous sources show, a problem which could be compounded by the current unstable job market.

The Organisation for Economic Co-operation and Development has raised concerns about the financial state of Britain, with many UK families struggling to meet their personal debt commitments.

Chris Radford, chief executive officer (CEO) for aap - the UK's biggest buyer of endowment policies - said that some of its customers had sold their unwanted endowment policies for their household debt management needs.

Finding the money to clear credit card debt could be a wise option. Speaking to the Daily Mail, Peter Sargent, a partner at insolvency specialists Begbies Traynor, said some families have no savings to fall back on when times get tough.

"More and more people are staring financial ruin in the face. The number defaulting on their credit-card debts is growing and therefore the number of personal insolvencies will grow over the next two years," he told the newspaper.

He said when individuals are in stable employment the prospect of clearing personal debt may not be as daunting, "but if they lose their job they've had it".

Some individuals may turn to the estimated 38 million unused credit cards lying around the home, which have a combined credit limit of £200 billion, to meet their financial commitments, uSwitch.com recently revealed.

This tactic may not be a wise move to make, as this could leave people further in debt. And many consumers could be rejected from obtaining credit in the future, because of their history of defaulting. A rejected application could leave a blemish on the credit history of individuals.

Rather than relying on more credit as a financial crutch, Britons may want to assess other ways in which to clear their climbing credit card debt.

Aap CEO Chris Radford said that some of the firm's customers had sold their unwanted endowment policies to keep on top of debt management commitments.

Individuals who have already considered surrendering their underperforming endowment policies may not realise that selling it to a secondary market maker such as aap could see them obtain more cash.




Source