The ‘stealth’ charges include amounts of up to £25 for straightforward paperwork, which may simply involve changing the customer’s address during the insurance policy term.

In situations involving the move from an insurance related ‘safe’ area to one considered more hazardous in insurance terms, the premiums will naturally increase.

But insurance consumers are objecting to the kind of charges being levied to cover administration tasks that do not change the overall validity or terms of the insurance policy.

According to the independent price comparison website uSwitch.com, around 14million motorists a year are being hit by excessive fees for making slight alterations in their policy details.

Overall it is estimated that the ‘stealth’ fees are earning more than £330m a year for the insurance companies involved.

Amongst the worst offenders, according to the survey by uSwitch, is Budget Insurance, who are charging a set fee of £25 to alter policy details in mid-term. More Than also charge fees for simple administration services of between £15-£25, and Churchill levies a flat fee of £21. Esure and Sheilah’s wheels are reported to charge £17.50, with Tesco levying £15.75.

A spokesman for the AA reported that the organisation does not make any charge for change of address details, but will only levy fees for major changes to the policy, which may include adding a further driver and then ensuing new insurance conditions are applied.

Other organisations that do not charge for simple administrative changes to an insurance policy include Zurich, RAC Direct and swiftcare.com.

A Budget spokeswoman confirmed that customers are made aware of any additional administrative charges in the original insurance documents, stating that these fees were in line with many competitors.

Offering a warning to drivers to consider administration fees when choosing an insurer, Debra Williams, managing director of the confused.com website, commented: “We recommend the terms and conditions of the insurance policy should be checked so that people are aware of these costs for making amendments.

Ms Williams also considers that the high charges for simple administration tasks could lead to policyholders not being completely honest and open about changes in circumstances, and that this could lead to later problems when claims are being considered.

In the present financial climate such considerations are bound to affect consumers’ choice when it comes to selecting car and van insurance, with many already reeling under the additional weight of mortgage rate rises and the tougher terms being imposed by unsecured and secured loans providers, as the credit crunch begins to impact on the once unshakeable property investment market.

It is therefore unsurprising that in search of alternative viable debt solutions, increasing numbers of homeowners and secured loan borrowers are now turning to debt management companies and requesting Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs).

Through these options many debt-harassed consumers are able to request creditors to accept lower payments, freeze interest rates and, in many cases, waive administration charges. For many at the moment, it is the only way they are able to reduce the monthly cost of outstanding secured and unsecured debts. The Debt Management Programme (DMP) operates by allowing money to be freed up in order to settle outstanding mortgage or other debt payments and gives the consumer the opportunity to begin clearing arrears, which may have accrued in the meantime.

Taking on a Debt Management Programme can also give the debtor some personal breathing space, as most reputable debt management organisations take on the full responsibility for dealing with letters, phone calls and the complete negotiation and repayment terms of the outstanding indebtedness, especially helpful when multiple creditors are involved.

Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

The options for such people are limited: they can be declared bankrupt or they can take out Individual Voluntary Arrangements (IVAs). IVAs entitle them to start anew without debt once they have repaid a portion of their debts to banks and credit lenders.

Homeowners with fixed-rate mortgages due to expire will be among those hit hardest by the high interest rates. They face soaring repayments in the range of £1,390 per month on a £150,000 mortgage.

Others may be headed for insolvency if they cannot control their debts without consolidating old loans or moving debt on to new low-interest credit cards. The tightening of lending practices will only make the situation more difficult for them.

Mr Sands warns that people will not have the credit lifelines they are used to relying on. Currently, one out of every two new credit card applications is being rejected – a rise of 20% since the credit crisis began.

One of the oddest claims received by Lloyds TSB was from a man who had set fire to his living room wall when an England flag was waved too close to an ashtray. 

“We covered these claims because our customers had opted for accidental damage on their home insurance policy,” he added.

Considering the numerous and often freak ways in which homes can suffer major damage, homeowners should be aware that if they have not chosen to cover accidental damages on their insurance, one alternative is homeowner loans which may be a way to cover the cost of repairs.

Managing director Phil Loney added, “The tension of the Rugby World Cup final four years ago clearly took its toll on the nation’s homes.”

By securing a home loan against property, Britons could access additional funds when unexpected damages occur.

In a meeting held by the Monetary Policy Committee (MPC), they conjectured that banks are more likely to provide secured home loans than unsecured forms of lending. 

And although the Credit Conditions Survey taken by the Bank identified an intention to raise the cost of lending to individuals, the committee members observed that “conditions facing the household sector appeared, for the moment at least, to be less affected by the financial turbulence”.

As a result, the New Year could bring an increasingly attractive proposition to homeowners during this transitional phase in lending.

MPC member, Professor David Blanchflower voted to reduce rates in October - the first time in three months that anyone on the committee had rejected Bank Governor, Mervyn King’s proposal to maintain the base rate.

“The spending and the mortgage rates are going up … there’s a lot happening and it’s a very worrying time,” she said.

With many Brits struggling to pay credit card interest and fees, now is the time to put those cards away and spend only what cash is expendable and on hand.

Opting for a home loan is the best way of releasing secured funds, rather than depending on high interest rate, unsecured credit.

In some cases a fixed repayment period could allow homeowners to gain the funds required to pay for their expenditures of the festive season, while at the same time ensuring a long-term budget plan is put into action.

“We definitely have had way too many years of relying on credit and Christmas is one of those incredibly expensive times,” Ms. Hannums explained.

The recent base rate increases have many households reining in their expenditures, observed the financial service provider.

“Families are cutting back on their borrowing and they’re saving to help ensure they can afford higher mortgage and other household bills,” stated Director of Strategic Planning, Sean Murphy.

However, consumers may gain in confidence since Alliance & Leicester has predicted that interest rates are unlikely to hit 6%. For those individuals still unwilling to take on unsecured debt, they may consider secured loans as a more viable alternative.

The research also suggested the homeowners with mortgage repayments still outstanding are 50% more likely to address their unsecured debts in the coming year. 

Mr. Murphy also offered, “With the next move in base rates now seen as more likely to be downwards, this could bring them some welcome comfort.”

The Office of Fair Trading reported that about four-fifths of lending has been unsecured; sending a clear signal to borrowers that now may be the best time to seek secured loans when cash is needed.

Additionally 51% of youths aged 14 to 16 years of age were irritated by unhelpful statements such as “money doesn’t grow on trees,” when questioned.

Most of today’s young Britons aged 18 and under are looking for sound advice when it comes to financial options.

NatWest’s research revealed that nearly three-fifths (59%) of young people believe experience with money management is imperative for their future economic security.

When young people are exposed to the actualities of sound financial practices they are far more likely to make wise financial decisions, such as securing home mortgages in their futures.

The Consumer Credit Counselling Service has previously published that youths under 25 years of age are increasingly more willing to undertake borrowing such as secured home loans.

The financial charity also stated the amount in loans lent to the demographic in all forms, between 2003 and 2005, increased by about a quarter.

Technical Director of the Home Builders Federation, Dave Mitchell, suggested that the rewards of such conversions could be greater in some areas than others. “You can go to some areas and it would add value, and you could go to other areas and it wouldn’t,” he stated.

However, for some homeowners converting a garage to add additional living space could increase the functionality of the home - thus adding value to the property.

Secured home loans are often the best possible means of financing such worthy (and often necessary) renovations.

For those individuals who are caring for an elderly relative, or who need to plan on making space for an elderly relative in the future, the additional usable space to provide the accommodation, often outweighs the concerns about the monetary outlay involved, suggested Mr. Mitchell. “In that sort of situation, I don’t think cost would come into it so much as needs.”

Homeowner loans can provide the funds needed for a range of garage conversion purposes, including adding a home office, which could substantiate the loan even further by adding income producing space to the home - thus increasing the value of the home.

The UK’s economy may slow, but there is little chance of the credit crisis having a terribly adverse effect, it has been claimed.

As such, although home loans may become somewhat more difficult to obtain, they may still be an effective way of gaining extra funds previously locked up in property.

“The threat of a major credit crunch seems to be receding” and “As interest rates come down and new supply remains restricted, the foundations will be laid for renewed real price growth,” offered Professor Peter Spencer, a chief economic adviser.

House prices are also forecasted to recover and gain in the not too distant future, which may increase the amount and frequency of obtainable home loans.

Professor Spencer’s comments revise the previous prediction by Ernst & Young that the credit crunch could “knock the stuffing” out of the housing market during the Christmas season.