Risk-averse jerks - the banks

One of the Bank of England's independent policy experts has suggested banks could be "risk-averse jerks"  for holding back on lending to smaller businesses.

And he added that there were even more significant "fundamental" problems in their attitude to lending to businesses with productive ideas.

Adam Posen is a US economist who sits on the Bank's Monetary Policy Committee, which votes every month on whether to change the level of interest rates.

He said on BBC Radio 5Live that UK banks were not doing enough to support the real economy.

"How much of that is because they are reluctant, risk averse jerks and how much because there is something more fundamental at work - I think it's as much fundamental if not more so," he explained.

He said that cutbacks in lending to small, medium and new businesses had been "tremendous".

And Mr Posen commented that banks were "choosing to lend to roll over debts to large borrowers...but they're not issuing new loans to new borrowers."

Loans and overdrafts at 10 year low

Households have cut back sharply on personal loans and overdrafts, leaving them at the lowest level for 10 years according to the latest snapshot of lending from Britain's banks.

They've also been trying to save more in the face of worrying economic prospects.

Family budgets have been coming under heavy strain as incomes stagnate and inflation increases - and there's the fear of job losses.

So people have been busily repaying personal loans and overdrafts, to the tune of £200m in the last month alone.

And they're attempting to save more -- total savings are up more than 8 billion pounds so far in 2011.

But that's a smaller increase than last year as the rising cost of living soaks up spare cash.

Parents feel the pressure to help with tuition fees

Now there are indications from Oxford that it could raise tuition fees to the maximum of £9,000 next year, matching Cambridge. At the same time there is evidence that parents are being frightened into saving more to help cover their children's fees.

Here are two parents' stories...

SARAH MARTEN is a mother of two children, aged 15 and 13, so university fees are only three years away.

She's been saving to help with some of their costs, but can't put aside any more to cover the hike in fees to a potential £9,000 a year.

"We put in plans to save up enough money to cover the fees for 3 years of a degree for each of our 2 children and now it's looking like that money we'd saved will only cover one year of a degree, so obviously there's a massive shortfall and we're not sure what we're going to do.

We will try and save a little bit more but we've only go 3 or 4 years to save up many thousands of pounds and it's simply not going to be possible to save that sum of money in so short a time.

It feels absolutely impossible. I mean we don't have that much surplus income. Interest rates are really low as well. And when you put those things together and you look at how much you can save it's going to be a really small amount.

We feel very angry about what's happened. We feel very disappointed. The thing that we want to avoid at all costs is for our children to start their adult working lives saddled with these huge debts. That's really important to us and we're not going to be able to do anything about it. That 's going to happen.

We've always encouraged them to be sensible. We want them to take a gap year and work during that time and save some money. We'll still be trying to help them find ways to fund their university without taking on a huge amount of debt."

MANDY SHARP has been prompted to save more after hearing about the rise in tuition fees. She has a 5 year-old daughter, who has just started school.

Mandy is salting away £100 a month in a tax free ISA and she plans to add lump sums when she has spare cash.

"I felt very nervous. It's a lot of money. I don't know what I'll be doing with my life at that stage. So it's spurred me to increase my savings for her to make it that bit easier.

It's hugely daunting. It's huge amounts and I don't want her to have those big debts when she comes out of university. I never had those fees when I went to university. It's a lot to come away with in terms of debt. That worries me.

It's not an ideal way to start your early years in a career. You won't be earning a large salary. You'll need rent, you may be looking for a flat and there are all those other living expenses. It could be a huge burden.

I'd like to be able to help her. I've been saving since she was a baby. I feel education is important I want her to have the best. I'm not saying I'll be able to cover the whole cost but if I can help her as much as I can, then I'd like to do that."

What if you had to repay student loans while still studying?

Part-time students might have to start repaying loans while still studying! That's after their new student loan scheme starts in 2012-13.

Part-time students will have to start repaying their student loans three years after they start a course, the government confirmed today. This means that in theory a part-time student might have to start repayments while still studying. However, that would only occur if the student's earnings had reached £21,000.

BIS has published full details this afternoon of the new loan scheme for part-time students, much of which had already been revealed.