One in 10 people struggle to meet the costs associated with the death of a loved one with many forced to take on debt, research has indicated.

Providing a funeral and memorial, as well as covering probate fees and other costs associated with dying, sets the average family back by £6,801, according to financial services firm Sun Life Direct.

But despite the sum falling by nearly £300 from its 2009 peak, 10% of people said they struggled to give their loved ones the send-off they wanted.

One in five of these people said they had to use a credit card to cover the costs, while 20% borrowed money from friends, 4% took out a loan and 5% sold some of their belongings.

But 10% of people said they had been forced to cut back on funeral arrangements because of financial constraints, while the same proportion cashed in savings and investments.

Nearly half of people had not made any provisions to cover the cost of their funeral before they died, while 41% of people arranging a service said they did not know exactly what their loved one would have wanted.

Four out of five funerals are now cremations, which cost an average of £2,546, while burials typically cost £3,168.

The actual cost of a funeral has risen by 4.5% during the past year to average £2,857, but people have cut back on the amount they spend on associated items in the face of the economic downturn.

Families now spend an average of £229 on limousine hire, down from £487 in 2008, while they typically spend £128 on flowers, compared with £229 three years earlier.

A memorial typically costs £759, while £338 and £104 are spent on catering and venue hire respectively. Relatives also typically pay £2,000 in legal fees associated with the administration of an estate.

Source: Press Association

A new concession will mean many people facing the highest demands for back-tax will not face interest payments.

Those given time to pay more than £2,000 in underpaid tax will now have interest waived - in line with those with smaller demands, MPs were told.

The Permanent Secretary for Tax, Dave Hartnett, told the Treasury Committee that the authorities "could have done better" to prepare people for bills.

More than two million people underpaid income tax in the past two tax years.

This was the result of errors in their Pay As You Earn (PAYE) tax code.

About 900,000 taxpayers will not have to pay anything after the government raised the write-off threshold from £50 to £300, a concession costing the Treasury £160m.

This left 1.4 million people owing about £2bn, or £1,428 each on average.

Source: BBC News

Signs of a weakening recovery are expected to see the Bank of England deliver its 18th consecutive decision to hold interest rates.

The Bank's policymakers will give their latest verdict at noon as recent economic indicators led to fears of a double dip recession.

Economists widely expect the nine-strong Monetary Policy Committee (MPC) to keep rates at 0.5% and to maintain its Quantitative Easing (QE) programme at £200 billion, with members torn between the pressures of stubbornly high inflation and faltering growth.

The MPC left rates unchanged at their historic lows since March 2009.

But a split was emerging among members, with above-target inflation leading Andrew Sentance to vote for a quarter point rate increase in each of the past three months.

Consumer Prices Index (CPI) inflation was 3.1% in July and warnings suggest cost pressures will worsen, with food prices expected to increase over the coming months.

Source: Press Association

Workers at many of Britain's biggest firms face having to pay more to maintain their company pensions, actuaries have warned.

From 2012 workers will be automatically enrolled into their company's pension scheme, although they will retain the right to opt out.

According to a survey, 41% of firms questioned said they were "likely or highly likely" to reduce future scheme benefits to meet the additional cost of these newly-pensioned employees.

Just over half the organisations also favoured a delay in introducing auto-enrolment, which is due to begin in October 2012.

The survey - by the Association of Consulting Actuaries (ACA) - quizzed 210 large private and public sector employers with combined pension scheme assets of £166 billion.

Auto-enrolment is being phased in between 2012 and 2017, following new laws brought in by the previous Labour government.

Companies will initially only have to pay in 1% of a worker's earnings, rising to a minimum of 3% by 2017. Individuals will have to contribute 4% of their salary to their scheme, with the Government topping this up with 1%.

Three-quarters of respondents to the ACA survey said staff with less than three months of service should not be auto-enrolled, currently required under the new rules, while 60% felt employers with fewer than five staff should be exempted altogether.

The findings come after the demise of many final salary pension schemes - which guarantee staff a percentage of their final salary when they retire. Most private-sector workers now pay into "money purchase" pension plans, where benefits depend on investment returns.

Source: Press Association

Elderly and vulnerable people were left without adequate household or motor insurance owing to fraud, the City watchdog has said.

The Financial Services Authority (FSA) handed down a near-record £150,000 fine to a company director in the case for failures regarding insurance policies.

Four other people were also banned following a separate insurance investigation by the FSA.

Fourteen people in insurance businesses have been banned this year by the FSA.

Large fine

One of the largest fines - of £150,000 - was handed down by the FSA to Andrew Jeffery, from West Sussex.

The director of Jeffery Flanders (Consulting) Limited failed to put insurance policies in place despite collecting payment of hundreds of pounds from customers, according to the watchdog.

"In so doing, he exposed customers to risks such as not having adequate household or motor insurance," the FSA said.

"This was particularly serious as many of the customers were elderly or vulnerable. He also knowingly forged documentation and correspondence potentially to mislead insurance companies."

He also obstructed the FSA's investigation, the watchdog said.

In a separate case, four people - Barrie Duncan Aspden, Melanie Aspden, Gaenor Clayton and Paul Willment - were all banned for their part in issues relating to Orion Direct Limited and motor insurance site Peppercom.

Barrie Duncan Aspden used approximately £300,000 of Orion client money to finance the creation of a new company Click the Pepper, which traded as Peppercom.

"His actions meant that several hundred customers of Orion were put at risk of being uninsured because their premiums were misused," the FSA said.

Source: BBC News

Buy-to-let lending has risen to its highest level since the fourth quarter of 2008, figures showed.

In the second quarter of 2010, the number of buy-to-let mortgages taken out was 24,900, up 13% on the previous quarter, and 15% higher than the same period last year, the Council of Mortgage Lenders (CML) said.

At the end of June, there were 1.26 million buy-to-let mortgages outstanding, worth a total of £149 billion, accounting for 12% of all mortgages - the highest proportion since records began, the CML said.

The group said the freezing of the buy-to-let mortgage market that emerged as an unwelcome side-effect of the credit crunch appeared to have eased.

With fewer people able to afford entry costs of home-ownership, the CML predicted tenant demand for private rented property would remain strong.

Low interest rates helped to reduce the number of landlords who are behind with their mortgage repayments, the CML said.

Around 18,500 people, the equivalent of 1.46% of all those with buy-to-let loans, were in arrears of at least 1.5% of their outstanding mortgage at the end of June, down from 19,300 at the end of 2009, and 22,900 a year earlier.

There was a slight increase in the number of properties that were repossessed at 1,600, up from 1,400 during the previous three months, and 1,400 a year earlier.

The CML said it anticipated little change in the wider housing market over the latter part of this year, and forecast only a modest rise for 2010 for the wider mortgage market.

There are 11.4 million mortgages in the UK, with loans worth over £1.2 trillion.

Source: Press Association

The Bank of England will have to keep interest rates at their record low of 0.5% until 2014, a leading economic forecaster has said.

The Ernst & Young Item Club said rates would need to be kept low to counter-balance the government's spending cuts.

"A base rate of 0.5% will begin to look like the new normal," Professor Peter Spencer from the Item Club said.

The Office for Budget Responsibility (OBR) has said that it expects rates to start to rise next year.

Interest rates have stood at 0.5% since March 2009.

"The new coalition's plans to cut the deficit are certainly ambitious," said Prof Spencer.

"On the assumption that the government is able to implement the overall reduction of £40bn set out in the Budget, we expect that UK growth will struggle to reach 1% this year but will gradually speed up in the following years to give the UK a high-quality recovery based on trade and investment."

The Item Club believes the Consumer Prices Index (CPI) measure of inflation will stay above the Bank of England's 2% target over the next 18 months, helped by high energy prices and increases in VAT.

But it says inflation will then fall "well below 2% as these effects wear off and spare capacity bears down on pricing decisions and wage bargaining".

"To prevent CPI inflation moving below 1% it will be necessary keep the Bank base rate low at 0.5% for much longer than the OBR and the markets have anticipated," Item said.

Source: BBC News

Business Secretary Vince Cable has accused high street banks of "ripping off" their customers after it emerged that some are charging up to 167% interest on unauthorised overdrafts.

Mr Cable also said customers are losing out because of a lack of competition in a marketplace dominated by a small number of big banks.

He was speaking after a survey for the BBC's Panorama programme revealed the average interest charged on unauthorised overdrafts was as much as 167%.

The research also found banks were demanding an average 32% interest on authorised overdrafts, despite advertised rates of around 19%.

Mr Cable said: "When we talk about restructuring the banks what's going to come out of this is a more competitive system where the customers are not ripped off.

"One of the negative side effects of this crisis is that our banking system that was already very concentrated is now even more concentrated so there's less competition, less choice and bigger temptation for banks to earn margins at the expense of their customers."

Source: Press Association

The Government has announced plans to change the rate at which private sector pensions are increased each year.

Pensions Minister Steve Webb has called for the schemes to rise each year in line with inflation as measured by the consumer prices index (CPI), rather than the retail prices index (RPI).

The move, which is expected to be introduced next year, would bring the inflation measure used for private sector pensions in line with public sector ones.

The Government also recently announced that benefits and the state pension would rise in line with CPI rather than RPI in future.

CPI is considered to be a more appropriate measure of inflation for pensioners, as it excludes housing costs, such as mortgage interest, which retired people are less likely to pay. But the move is likely to cost workers hundreds of pounds a year over the course of their retirement, as CPI is generally lower than RPI.

The Government also announced that benefits paid by pensions safety net the Pension Protection Fund and the Financial Assistance Scheme would also rise in line with CPI rather than RPI in future.

In a written statement, Mr Webb said: "The Government believes the CPI provides a more appropriate measure of pension recipients' inflation experiences and is also consistent with the measure of inflation used by the Bank of England. We believe, therefore, it is right to use the same index in determining increases for all occupational pensions and payments made by the Pension Protection Fund and Financial Assistance Scheme."

Source: Press Association

Most people want employers to lose the right to tell people when to retire, according to a survey by the charity, Age UK.

It says the government should scrap forced retirement immediately, currently set at 65 years for both men and women.

The survey showed more than two thirds thought the principle of forced retirement was wrong.

Age UK is asking the government to make clear its plans for the retirement age.

Under the current system, employers can tell any member of staff to leave work once they pass their 65th birthday, whether the individual wants to stop work or not.

One who did not want to retire was John White, a 69 year-old postman.

He was forced to leave work in July last year, despite the fact he loved his job and was good at it - a fact confirmed by his manager.

He points out that the higher-paid professions, such as politicians, doctors and judges, can keep on working past 65 - the age at which the state pension is paid to men.

Source: BBC News