Advice on my debt please

bobcat2 · 11 October 2016 at 10:16PM

If you have savings, I would pay the overdraft immediately if its charging interest, the overdraft would then be available as a genuine emergency fund if required. I would do something to tackle the 39% interest on the retail account as quickly as possible as that APR is horrendous. Is there any available credit on the credit cards at 0% than you can use to tackle some of this? In my opinion its important to get the interest rates down as low as possible so you can start making a dent in outstanding amount with your repayments.
It doesn't make any financial sense to have savings if you are paying interest unless you will definitely not have access to any other funds in case of emergency.

EssexHebridean · 12 October 2016 at 9:29AM

At the very least pay £450 from your savings to your OD as a matter of urgency - today - as this will reduce the charges by £15 a month and mean your £40 a month you're currently paying again will start to make a dent - albeit a small one.

Then contact the bank and ask them to change your OD limit to £1000 at the moment - that way you are still within an "agreed" level. You also need to ask them to put an absolute stop on the account so it can't go beyond this point, though. Once you've decided what to do about shifting the rest of your savings, you can make a decision on reducing it further to act as an emergency fund, but once you do that, you do need to commit to it actually being for genuine emergencies, not just stuff you haven't budgeted for.

MEM62 · 12 October 2016 at 9:40AM

asoe209 wrote: »

I drive a 2005 vw polo, its got 56,000 on the clock

I don't believe they want any thing driven older than 5 years.

the car allowance works out at about £300 after tax

Your employers' expectations on the type of car they are expecting you to drive in relation to the car allowance they are paying you is unrealistic. This is adding to your financial pressures. Either their expectations need to be lower or the car allowance considerably higher.

MrsTinks · 12 October 2016 at 9:47AM

MEM62 wrote: »

Your employers' expectations on the type of car they are expecting you to drive in relation to the car allowance they are paying you is unrealistic. This is adding to your financial pressures. Either their expectations need to be lower or the car allowance considerably higher.

Not really... New polo with £2k towards a deposit is about £188 per month - allow say £40 on top of that for insurance and it's perfectly reasonable. They haven't stipulated a Mercedes or Audi, A car under 5 years with a car allowance of £300 after tax is perfectly reasonable.

Obviously there are also way cheaper options out there - I just picked a fairly mid market brand new car.

sugarcube84 · 12 October 2016 at 10:38AM

I think what really matters in terms of the car allowance is what does the policy stipulate. It seems at the minute that the OP is making an assumption of their employers expectations in regards to the car but does the policy state that the car must be a certain age and if it does say no older than 5 years (as an example) then how has the OP been managing to get away with a car that's 11 years old.

I would certainly be putting off buying a new car, especially as it seems you have just spent a it of money on it and it has low mileage for the age, I have done half of that mileage in under 2 years in my car and my allowance works out around the same.

On another note is none of the mileage you do able to be claimed as expenses?

MrsTinks · 12 October 2016 at 11:01AM

sugarcube84 wrote: »

I think what really matters in terms of the car allowance is what does the policy stipulate. It seems at the minute that the OP is making an assumption of their employers expectations in regards to the car but does the policy state that the car must be a certain age and if it does say no older than 5 years (as an example) then how has the OP been managing to get away with a car that's 11 years old.

I would certainly be putting off buying a new car, especially as it seems you have just spent a it of money on it and it has low mileage for the age, I have done half of that mileage in under 2 years in my car and my allowance works out around the same.

On another note is none of the mileage you do able to be claimed as expenses?

Employers can use some discretion - so most won't force employees to go out and buy a brand new car (and no-one is saying OP should) - however it sounds like they HAVE noticed and are pushing for it. The condition of the payment is often quite clear that there is a maximum age (so for my husbeast it's actually 3 years and a certain level of car - granted his allowance is pretty generous as a result) - should it be brought up that his car does NOT meet these conditions and on being asked to correct it then his company can withdraw the car allowance because it's not been used for what it was given.

Should be said that no-one seemed to object when he had a 4 year old Audi A8, and the policy is 3 years... they will only start picking on it if it's viewed as an issue normally. IE being late to work repeatedly due to car problems or if travelling to client sites in say a Morris Ital. How strictly a policy is enforced will depend on the company.

Ultimately it's not a base salary - it's an allowance provided to ensure the employee has an appropriate mode of transport to attend his job and possibly represent the company to clients.

As for mileage - I agree this is low on a car of that age, but clearly that's not stopping it from having a lot of issues

enthusiasticsaver · 12 October 2016 at 11:12AM

56000 is not a lot of mileage for a 11 year old car. Normally £300 would cover a less than 5 year old car in terms of a used car HP agreement or even a very basic p2p deal but in terms of your financial state this is not possible at the moment. As Mrs Tinks says I would keep quiet about it and see if you are pushed further especially as you have paid out quite a lot on repairs.

EssexHebridean · 12 October 2016 at 11:44AM

I agree with Mrs T & ES on this one. Keep your current car immaculate, make sure that you have breakdown cover in place (although you should have it anyway, obviously) and keep your head down. Once you are back on your feet, and if your new salary comes off as planned, I would suggest you need to start setting ALL the car allowance to one side in a separate account as it's this which will then not only pay for the running of your current car, but will also start to save towards the next time you come to replace.

Remember also you don't need to be looking at buying brand new, when you do replace. You want to be careful with anything in a registration that crosses over a year, though - ie my car is a 2007 registered 57 plate - Mr EH's however is a 2006 registered 55 - meaning his actually "appears" older than it in fact is. So in other words when you buy, ensure yours is true to its registration year if the age will be important down the line. (And for anyone who that doesn't matter to, a car that shows older than its actual year can be a bit of a bargain!)

asoe209 · 13 October 2016 at 8:24AM

Morning all sorry was not able to log on yesterday.

Well in terms of the car, the policy state 5 years and has to be a 5 door, I did question that and my Director did say that the door number is not so much a problem.

The position I am in is a trainee so im not up to the full salary for the job that I do yet, this will increase once I past my final exam. so at present the terms I moved on where staying on my previous departments pay.

I believe they understand about the car as im not at full pay, and I have made it clear that until I am sorted and on full money I wont be getting a new car as I can afford it or justify it. but every now and again they do ask have you been looking etc.

I do get mileage which is 10p per mile. Last year I I did claim the rest up to the 45p and got about £200. I never quite understood why it was so low as im sure the from state it was £800-£1000 but I believe it was only 20% of that that was returned.

Yes I don't have any other money if I get rid of my saving I have no one that could loan in an emergency etc. this is why the saving have been important I know it don't make sence to save with bill to pay but I would be a bit more comfortable have something there just in case.

I do use them when I can to put towards other pills like the OD I have reduced that over a number of months with it.

I am due a bonus from work at the end of next month, the amount is always different but that will be going on something.

I don't have enough credit on the card to use on the Retailer account.

So its clear plan is to get rid of the retailer account 1st and reduce the OD.

your advising not to get a loan to do the retailer or should I?

I can start putting the lodger money to the retailer. but I think a lot of this is getting taken up by the interest now. of the 360 I paid last month 150 of that is on the balance.

i'm thinking the loan will just give a steady payment that can be budgeted, but at the same time I don't really want a loan over my head.

MEM62 · 13 October 2016 at 10:07AM

MrsTinks wrote: »

Not really... New polo with £2k towards a deposit is about £188 per month - allow say £40 on top of that for insurance and it's perfectly reasonable. They haven't stipulated a Mercedes or Audi, A car under 5 years with a car allowance of £300 after tax is perfectly reasonable.

Obviously there are also way cheaper options out there - I just picked a fairly mid market brand new car.

I would not consider a Polo as suitable for company use. (Too small) For business use most companies would want Golf / Focus sized at least. Also, if the OP is racking up any kind of mileage he won't want to be doing that in a small car. In my industry, if you were taking an allowance instead of a car, the base level allowance would be £6K.

Advice on my debt please

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