New research from the Post Office has found that a quarter of mobile phone owners are considering ditching their contracts in favour of Pay As You Go.

The mobile phone market is likely to look dramatically different in coming months as 6.5 million users consider switching from a mobile phone contract to a Pay As You Go (PAYG) option due to the current economic climate. A further 723,000 people say they are already in the process of switching to a pre-pay tariff.

Currently 32.7 million people in the UK are on PAYG - 54% of the population. But this figure is likely to rise to around 40 million, equivalent to a 65% market share.

Some Post Office branches have seen sales of mobile top-ups more than double in recent months, suggesting that sales will continue to go up sharply in 2009. Martin Moran, head of telecoms at the Post Office, said, “Clearly people are being mindful of their finances during difficult times, and taking control of their spending by switching to more manageable options for mobile phone costs.

“59 per cent of people say that having a PAYG mobile allows better control of spending and in some Post Office branches we’re seeing record numbers of people topping up their mobile phone at the counter,” he added. “We’re preparing ourselves for an increase in use of [such] services as the financial crisis deepens.”

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An appeal by eight banks, against a High Court ruling allowing regulators to investigate the fairness of unauthorised overdraft fees, has been thrown out.

The Appeal Court ruled that the Office of Fair Trading had the power to launch an investigation that could cost the banks up to £2.6 billion a year in lost revenue, and force them to make up to £1 billion in refunds.

The ruling comes after a 13 month battle for consumer groups, who have urged the banks to back down and pay back unfair charges. However, acting against the advice of the appeal judge, the banks have decided to make another appeal, this time to the House of Lords, which could delay an investigation further and hold up the cases of thousands of claimants.

Peter Vicary-Smith, chief executive of Which?, the consumer organisation, said “The courts have made it clear the banks should now throw in the towel. This case has been going on too long and it’s about time they tried to regain some of their dignity and paid customers their dues.

“This whole saga has severely damaged the banks’ reputations. If they try to appeal in the face of such a clear decision, they will suffer further losses in the court of public opinion,” he added.

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A charity has warned that levels of personal borrowing in the UK are unsustainably high, and that the effects of the credit crunch will leave many borrowers bankrupt.

Research from the Citizens Advice Bureau shows that people turning to the charity for debt advice owe an average £16,971 through credit cards and personal loans - two thirds more than in 2001 and nearly 18 times their monthly household earnings. It would take 93 years for such customers to pay off their debt at an affordable rate, said the charity.

CAB chief executive David Harper has called the figures “sobering”. Worse still, they are based on information collated before the credit crunch really took hold, when jobs were more stable than they are now.

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Northern Rock has announced that it will revive its mortgage lending with extra money from the taxpayer.

The decision comes as part of a wider government plan to boost lending across the banking industry, and goes back on the bank’s previous policy of winding down its loans.

The bank also announced that it would report a loss of £1.4 billion for 2008, and said that it would freeze the pay of senior staff at 2008 levels, and would not award them bonuses except for contractual entitlements. Frontline staff however, such as bank tellers, will receive bonuses worth up to 10% of their 2008 salary. Likewise, junior managers will receive a bonus for 2008, but this can be witheld until 2010 or denied them if performance criteria are not met.

In a reveral of its previous lending policy, the Newcastle-based bank is aiming to lend an extra £5 billion in new mortgages this year, and up to £9 billion from 2010. The Treasury will provide the bank with an extra £10 billion of taxpayers’ money to fund the project.

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Stave off those late-winter blues with 2 for 1 meals at ASK restaurants.

From Sunday to Thursday till 9th April, customers who order two main meals at ASK will be able to get the cheapest free. With a selection of main courses ranging from salads to pizza, risotto to calzone, you’re bound to find a meal that tickles your taste buds. You can view their menu here.

To benefit from the offer, just fill in your details here and print the voucher. Then hand in the voucher to a member of staff when you order at any ASK restaurant.

This offer is valid Sunday to Thursday until Thursday 9th April, excluding Mother’s Day. The voucher cannot be used for the set menu or in conjunction with any other offer. Full terms and conditions can be found here.

Fewer people are applying for ISAs as the credit-crunch bites and consumers decide to pay off debts rather than save money.

Due to laws restricting the tax-free savings account to one cash ISA per person per year, people have traditionally flocked to banks at the beginning of the financial year in April to open an account. Last year, when the economy was still growing and savings rates were above 6%, the level of demand for ISAs was so high that many consumers experienced a delay in opening an account.

But a report from the Co-operative Bank suggests that this year’s “ISA season” will be a quiet one. According to the bank, the number of people taking out an ISA this year is due to drop by 13% to just 27%, compared with 40% a year ago. Worsening economic conditions and recent cuts in the official interest rate from 5% to 1% by the Bank of England have put consumers off saving, knowing that they will reap scant returns.

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UK consumers are switching from credit cards to debit cards as the pressure on liquidity mounts, according to payments association Apacs.

In 2008 credit card spending increased just slightly from £124 billion in 2007 to £126 billion, while spending on debit cards rose 9% to £245 billion from £224 billion. The use of cheques fell by 10.4% compared with the previous year.

Debit cards accounted for nearly three quarters of card transactions last year, and the number of debit cards in circulation overtook the number of credit cards. The number of credit card holders fell by 2% last year, indicating that more people are trying to reduce their personal debt during the credit crunch.

A report from May last year suggests that the use of cheques id in “irrevocable decline” after 350 years in use, since fewer stores are accepting them and other payment methods are becoming more common, such as payments made using a mobile phone.

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The number of people losing their homes rose 54% last year to a 12 year high of 40,000, while the number of hownowners behind on their repayments rose by a staggering 70%, figures released today by the Council of Mortgage Lenders (CML) show.

Though the number of repossessions was lower than the predicted 45,000, over 200,000 people were three or more months behind on repayments at the end of the year, compared with 127,500 at the end of 2007. The CML has forecast that some 500,000 people could be in arrears by the end of this year.

The CML said that the lower than expected number of repossessions indicated that lenders were trying hard to keep as many people in their homes as possible.

“The fact that there were fewer repossessions than expected, despite a worsening economy and rising unemployment, demonstrates that mortgage lenders are making strenuous efforts to ensure that repossession really is a last resort,” the association said.

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A Watchdog has told employers to stop using the recession as an excuse for cutting pension contributions while still paying dividends to shareholders.

The UK Pensions Regulator (UKPR) said that while employers with final salary pension schemes should be allowed some “breathing space” during the economic downturn, they should still treat trustees fairly.

The UK pension market is in dire straits, with companies’ pension deficits totalling an estimated £191 billion, compared with a deficit of £49 billion a year ago.

Figures released earlier this month showed that 90% of the 7,800 pension schemes measured by the Pension Protection Fund were in the red. A separate report found that a quarter of major private sector firms expected to close their final salary pension schemes within the next few years.

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New figures from provider RSA have exposed the true cost of car insurance fraud.

The number of false claims made by policyholders has increased significantly during the credit crunch and the crime is costing the car insurance industry £1.6 billion a year. But many car insurance customers are unaware that the financial squeeze on the industry is passed on directly to consumers in the form of higher premiums.

The RSA report found that a large proportion of motorists seem to be tolerant of this kind of fraud. It showed that at least 1.4 million consumers believed fraudulent car claims to be “more acceptable” than a year ago because of the recession. What is more, a staggering 4.5 million motorists believe that making a fraudulent claim is not necessarily “wrong” - a rise of 1 million over the last 9 months.

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