Back in August last year, the Government introduced its Funding for Lending scheme, which was designed to give a boost to the loan industry in the UK by providing cheap loans to banks and building societies, which could be used to pass the savings on to loan customers of the lenders.

Whilst this seems to have been successful within the banking sector of the UK loans market, with a wider range of cheap loan deals now available at higher loan to value ratios for secured loans, the scheme also seems to have had a knock on effect in other areas of the loans market, according to one peer to peer loan company.

The peer to peer loan company, RateSetter, has announced that it arranged a record number of loans through its organisation last month and has said that it believes this is due to the effects of the Funding for Lending scheme.

RateSetter was launched back in October 2010 and in January this year it completed £6.8 million worth of new loans, which shows a 100 per cent increase on any previous month since the company was formed.

It seems that this has been a trend throughout the peer to peer loan market, with most peer to peer lenders seeing an increase in loan numbers during January. Overall peer to peer loan companies arranged around £20 million of new peer to peer loans in the UK.

Rhydian Lewis of RateSetter said “Funding for Lending seems to be achieving what the government wanted in terms of getting funds flowing into home owner loans and mortgages, which is great news for borrowers but, on the other side, it has meant savings rates have plummeted as banks replace their retail funding with Government funding. The reduction in savings rates has led people to look at peer to peer lending.”

Despite the gloomy state of the economy in the UK at the moment and the fact that many people are focusing on lowering their monthly commitments and personal loan and credit card debts, last year saw an increase in the amount of money borrowed on consumer credit, which includes personal loans, car loans, overdrafts and credit cards.

The news comes from the Finance and Leasing Association (FLA), which has reported that its members saw an overall increase in loans and other credit of around 6 per cent over the course of last year.

The figures from the FLA have shown that the largest areas of growth were actually in car loans and car finance, as well as in store consumer credit loans, which shows that people are borrowing money and taking out loans to make purchases once again, rather than just for debt consolidation loan purposes.

Car loans and motor finance deals increased by around 22 per cent over the course of the year, to £16.7 billion worth of loans and retail in store credit saw an increase of around 15 per cent, to £2.8 billion worth of loans.

Secured loans saw an increase for the year of around 14 per cent, with a total of £326 million worth of loans, although secured loan numbers only increased by around 2 per cent.

Fiona Hoyle of the FLA said “Today’s figures underline the need for consumers to be able to access affordable and responsibly provided credit and loans.”

“2013 will be a pivotal year for the consumer credit and loan industry as the Government prepares to publish its consultation paper on the new regulatory regime. It is vital that the new system supports the diversity of this market.”

Retirement is a time when people are supposed to be able to relax about their finances and take an income from their retirement planning and investments and live without the burden of loan repayments or other debts.

However, a new survey from the Prudential has found that around one in five people who plan to retire this year will do so with some form of outstanding loan or other debt, with an average loan amount of around £31,200 each.

Within these loan debt figures, it is estimated that somewhere in the region of 43 per cent of these retirees will still have an outstanding balance on their home owner loan or mortgage, as well as other debts on things like unsecured loans and credit cards.

Although this may be an alarming figure for many people, the good news is that the overall amount of outstanding loan debt has actually fallen from an average of £38,200 during last year and the number of retirees with a home owner loan debt has fallen by 7 per cent.

The survey found that around 20 per cent of male retirees will retire with loan debts this year and 16 per cent of females, with average loan debt figures of £33,800 and £28,100 respectively, although once again these figures have fallen significantly since last year.

Of those with retirement debts, 56 per cent will owe money on credit cards, 21 per cent will have a bank loan or other unsecured loan and 19 per cent will have an outstanding overdraft.

Vince Smith-Hughes of the Prudential said “Paying off loan debt as early as possible, preferably while still working, will help ensure that retirees have more disposable income in turn enabling them to enjoy a more comfortable retirement.”

At a time when money is particularly tight for many individuals across the UK and more and more people are relying on personal loans and credit cards to see them through each month, it might be surprising to hear that the majority of us do not have any plans to improve their financial situation over the course of the next twelve months.

Although New Year’s resolutions are notorious for being broken within the first month of being made, now would seem like an ideal time for those who are struggling with their finances to form a budget plan and re organise their financial situation and reduce their dependency on personal loans and credit cards for their day to day living.

However, new research conducted by YouGov on behalf of the Money Advice Service (MAS), has found that around a third of the UK population have no plans to put a financial budget in place for this coming year, which equates to somewhere in the region of 16 million people who are likely to continue to struggle their way through 2013, using personal loans and credit cards to make ends meet.

The survey found that 19 per cent of those interviewed did not think that a budget plan was necessary, as they could always rely on using their credit card, or take out a personal loan, if they required an emergency fund. A further 17 per cent did not see the point of setting themselves a budget, as they would not be able to stick to it anyway.

Jane Symonds of MAS commented on the attitude of many people towards their finances and loan debts, she said “In these tough times many people don’t have much money left over after their bills are paid, so it’s worrying how many households intend to live of overdrafts and credit cards.”

Whilst Christmas is supposed to be a time for celebration and giving of presents, many individuals enter December with increased levels of stress and worry about how they are going to pay for the festive season and stay on top of all their other financial commitments, such as loan repayments and household bills.

A recent survey from Legal & General’s Money Mood survey, has found that around 1.6 million households across the UK are planning to cut back on their festivities and spending this Christmas in order to save money, which equates to around of a third of the population of the country.

The survey also found that somewhere in the region of an additional 300,000 homes across the UK are struggling to stay on top of their monthly bills and loan and other debt repayments at the moment, compared with prior to the credit crunch.

Although may people are making the sensible decision to make some level of cut backs on their Christmas spending, others will still carry on and spend more than they can afford, with many using credit cards, overdrafts and personal loans to help cover the cost of the festive season.

It is also thought that a large number of people are likely to be tempted to take out an expensive pay day loan or similar short term loan to help pay for Christmas, however this is likely to cause much more serious long term loan debt problems, which will last long beyond Christmas itself.

It has been estimated that the average person in the UK will spend somewhere in the region of £20,072 on Christmas over the course of their working lives, which could equate to a whole year’s salary or even more for many individuals.

There is little wonder that people are often tempted to take a loan or borrow money at this time of year, but a little budgeting and cutting back this year could make a significant difference to your finances over the next twelve months and beyond.