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Believe it or not, there’s a financial time bomb ticking away in UK, and if it goes off: hundreds of thousands of individuals stand to lose everything because of the culmination of a number of factors. We’re talking about attempts to stay afloat and keep the wolf from the door but these attempts could well bring the wolf in, sit him down and offer him afternoon tea. Have a read of this to find out more…

Bit of a stat-tastic post today all about lending in January 2010 and the whole of 2009, courtesy of recently released figures from the Bank of England. Check these beauties out:

- 48,198 mortgages were approved in January ‘10, – 17% lower than the 58,223 in December ‘09 but a whopping 43% higher than in January ‘09.

For a bit of context, researchers Global Insight believe 70,000 to 80,000 home loan approvals a month means ’stable house prices’ and experts attributed slow Jan ‘10 sales to poor weather (yes you read right) and the return of the Government stamp duty threshold to £125,000.

- **RECORD BREAKER** – UK banks wrote off a previously unheard of £4.12billion in bad credit card debt in 2009.

- £984million of mortgages were written off in 2009, double the £408million in 2008.

- In total the amount written off by banks (including cards, mortgages and other loans) rose from £6.9billion to £9.3billion.

- Total lending dropped from £13.53 billion in December to £10.24 billion in January.

- UK citizens borrowed £500million more than they repaid in January, a rare occurance with the populus having repaid more that we’d borrowed for five of the previous six months. An interesting comparison is that at £500million borrowed, the amount of credit being handed out in one month is still a long way from the £2billion a month during the peak of the recent boom time.

Earlier this week, Martin Lewis’ website MoneySavingExpert.com launched it’s new “bank charges reclaiming guide” with the headline that up to £480million of unfair bank charges could still be reclaimed. They’ve calculated that more than 500,000 people could still claim, despite last year’s Supreme Court ruling to the contrary.

The GMTV money expert said: “Rumours of the death of bank charges reclaiming have been greatly exaggerated, certainly the number of people who can do it has decreased – it’s now mainly those people suffering financial hardship.” If anyone watched the live announcement by the Supreme Court at the end of last year, they’d have seen how angry Lewis was, so it’s no surprise that he’s starting the fightback so soon.

It’s ok, don’t worry… they’re gonna be alllllright.

I know you’ve been fretting that those poor bankers might miss out on their bonuses what with the country being economically rogered by their bosses and us having to pick up the counseling bill. But everything’s back to normal now, all the major banks are forcasting that a quarter of all London-based investment bankers will earn average pay packages of £1m each for the past year. Back to normal, just the way it was before the recession, which is… erm… worrying.

Now, you and I may see a problem with this, but it seems the financial industry has had a jolly good year so it’s back-patting time. After getting a nice big wedge from HM Government 12 months ago, the banks have removed all the competitive products from the market, cut back on value for money and hiked up the interest rates. The result of which means that we struggle for a loan or credit card deal that doesn’t involve double digit interest and the bankers get wage packets that start at £100,000 minimum and go well into eye-watering, forehead slapping territory.

And our only hope of preventing another recession is the Queen periodically checking up on the boys in the City. (More forehead slapping).

Whoopy!! The latest figures from the Office for National Statistics (ONS) show a halt in the rise of unemployment and early calculations show the recession is over after the economy grew in the 4th quarter of ‘09. This is yet to be confirmed and a more in-depth assessment will release figures this month and next to solidify the economic growth.

Despite this good news, more and more people are cancelling all non-essentials to try and prepare in case they lose their job. Top of the list of money-saving cuts are insurance products, in particular payment protection insurance (PPI). No doubt the countless PPI compensation claims has contributed to the cancelling of policies but those who do axe correctly sold cover are leaving themselves wide-open to greater problems.

As if the raft of unfair bank charges and mis-sold PPI wasn’t enough to contend with, the banks then went and put us into a recession which has led to record unemployment levels. Meanwhile, billions of our money was used to bail them out and now they all have their million pound bonuses back.

Corruption is the only word I can think of at this point. And don’t think that they’ve been made to turn over a new leaf by a slap on the wrist from a toothless QUANGO or Government investigation panel. The new way that we’re getting shafted is through personal loan interest rates which are at the highest level since 2001. When it comes to extracting cash from our pockets; you’ve got to give the banks some credit, even if they overcharge you for doing the same.

Last year, the Financial Services Authority (FSA) whacked a massive fine on mortgage lending company GMAC-RFC for starting repossession proceedings too early. Now, GMAC-RFC conducts no new business in the UK and as well as the £2.8 million slap on the wrist, the US based lender had to repay £7.7 million to the customers concerned.

The thing is, what GMAC-RFC did is just as bad as all the extortionate bank and credit card charges that other lenders charged leaving people overdraen and in serious debt. Yet those lenders go unpunished and have their actions sanctioned by a Supreme Court. As usual in this odd financial system we have, it’s one rule for one set of customers and another rule for another. Get it sorted, someone.

You heard it hear 2nd – The Recession’s over! According to the figures released today (Tuesday), by the Office for National Statistics (ONS), the UK economy, measured by gross domestic product (GDP), grew by 0.1% in the final quarter of 2009.

But before you get all excited and start buying Tesco Finest lasagne again, this number is only preliminary and the ONS will release a revised figure on Feb. 26th and another on March 30th that could see us still officially in a recession. However the ONS have said that they are just as likely to adjust the figure upwards as well as downwards so there maybe room in your budget for that lasagne after all.

The latest report by the Financial Ombudsman Service (FOS) has revealed that unfair bank charges are affecting low-income  households so much that they are unable to pay their rent or mortgages. According to the report, the number of families struggling because of excessive bank charges risen from 2,000 to 8,000 in just one year.

As part of their report the FOS commented that the situation had been made worse by the Supreme Court decision to allow bank charges to remain unregulated and in turn denying millions of customers the chance to reclaim bank charges. The FOS expects 2010 to be a year of continued and increased banking distrust and is preparing for a 27% increase in the number of disputes between consumers and financial firms about bank charges, mis sold PPI and mis sold endowments.

Just a quick one today to point you in the direction of Msartin Lewis’ Blog, he’s been to No. 10 to discuss the future on bank charges and credit card charges. Looks like the PM’s on board with making sure the banks reduce fees and play ball, check it out here…