Estimates by Sainsbury`s Finance, the supermarket bank, suggest that 37m of debt was taken on in personal loans in 2009 to help cover the cost of school fees, university fees and general education costs, headlinemoney.co.uk reports.

In total, according to the bank, almost 4,400 personal loans – `with an average value of around 8,500` – were taken out for these specific reasons.

It is estimated that 1,100 loans (12.25m of debt) were taken out to cover the cost of school fees, while 1,900 loans (13.56m of debt) were taken out to help with university and college fees, and a further 1,400 loans (11.26m of debt) were taken out to pay for `other education`.

Steven Baillie, Head of Loans at Sainsbury`s Finance, commented: “Parents and anyone paying for education, such as professional qualifications, need to make sure they are shopping around for the best loan rate available and not simply turning to their current account provider.”

Figuring out the cost of clearing debt can be tricky, as a recent press release from moneysupermarket.com demonstrates.

The press release estimates that 63% of balance transfer card users have fallen into the `payment hierarchy trap` by using their balance transfer card to make a purchase.

Due to the way many credit card companies handle their customers` payments, clearing the debt on even a small purchase can end up costing them much more than they expected.

Why? A card might charge 0% interest on the balance that was transferred to it, but that doesn`t mean the debt from a purchase will be interest-free. The interest on `purchase` debts can easily be around 18%. This is particularly important when the customer`s payments won`t go towards that debt until the entire `balance transfer` debt has been paid off – so it could well be sitting there (accruing interest) for many months or even years. Read more…

The Office of Fair Trading (OFT) has decided not to recommend any price controls on payday loans and other forms of short-term debt.

In July 2009, the OFT began looking into a few forms of short-term debt – not just payday loans, but also home credit, rent-to-buy and pawnbroking.

Its decision? That although borrowing money like this was expensive, it still met a need for people who didn`t have any access to other forms of credit.

As the OFT`s press release says: `Products supplied in these markets are typically used by people on low incomes who cannot access mainstream credit and who borrow small sums for short periods.`

Furthermore, the Government should address the issue itself if it thinks it`s necessary, the OFT said, pointing out that `More radical approaches which are beyond the OFT`s remit would be required if the Government or others wanted to tackle the wider social, economic and financial context in which high-cost credit markets exist.`

The OFT did consider the need for price controls, but decided that this wouldn`t solve any problems – and could actually cause new problems. Read more…

Today, we can expect the details of the `toughest package of tax increases and spending cuts in a generation`, as the BBC puts it. We`ll find out at 12:30, when Chancellor George Osborne delivers his first Budget.

The deficit of 155bn basically means we`re spending a lot more as a country than we`re earning. Mr Osborne has said the measures designed to tackle that record deficit will be based on fairness, and wealthier people will pay more.

We don`t know the details of the Budget yet, but we know there will be tax rises and cutbacks in spending.

But there will be some good news as well as bad news – for example, around 900,000 low earners will no longer have to pay tax, as the threshold for paying tax will rise 1,000, up to 7,475. This will also mean a tax cut for millions of basic-rate taxpayers.

Many people disagree with the thinking behind the Budget, however, from unions to employer groups. Read more…

According to a study by Saga Equity Release, 17% of over 50s are left with very little money to enjoy their retirement once they have repaid their debts, while 41% of retirees find repaying their debts difficult, headlinemoney.co.uk reports.

However, more and more over 60s are now taking out equity release plans to unlock money from their homes so they can enjoy a `better quality of life in retirement`.

Figures show that 13% of over 55s are retiring in debt, and 40% of this age group have used equity release as a way to repay these – leaving them `better off in real terms` and free to enjoy their retirement.

Executive Chairman of the Saga Group, Andrew Goodsell, said: “This study dispels the concept that equity release is the last resort for those who have nowhere else to turn. We have found that people are increasingly likely to use equity release to clear debts, enabling them a better quality of life in retirement.”