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Broadband and mobile providers will hit their consumers with annual inflation-linked price increases in April.
Most networks put their prices up each spring by a figure that combines either December’s Consumer Price Index (CPI) figure or January’s Retail Price Index (RPI) plus a typical 3.9%.
With CPI inflation of 4% last month, that means millions of BT, EE, Vodafone and Three consumers (all of whom use the CPI figure) could see their spending hit by 7. 9%.
Ofcom, the industry regulator, will ban companies from increasing their customers’ spending in line with inflation, which it says would cause “harm to consumers”.
The watchdog launched a consultation on scrapping the increases in December, saying people signing-up to a phone, broadband or pay TV contract should be “clear and certain about what they will have to pay throughout its duration.”
He expressed fears that such increases would stifle the festival and make it harder for consumers to identify deals, while forcing consumers to carry the burden of inflation-like currency uncertainty.
Instead, Ofcom needs operators to let prospective consumers know how much their spending will accrue per year in pounds and pence, and when the increases will apply.
The prospect of sharp price increases emerges as Ofcom publishes figures showing the number of court cases won through companies in this market.
Virgin Media, the most criticised broadband, landline and pay-TV provider in the three months to September 2023, according to official figures.
Data from Ofcom, released today, shows that the number of Virgin consumer court cases was well above the industry average between July and September last year.
BT, O2, NOW Broadband and TalkTalk had an above-average number of complaints.
For broadband, Virgin recorded 32 court cases consistent with 100,000 customers, more than double the industry average of 15. Nearly a portion (46%) of court cases were about how the company handled court cases, while 20% were about billing, pricing, and fees.
In the case of landlines, Virgin recorded 19 court cases per 100,000 residents, compared to the industry average of eight. Once again, the court cases were about settling court cases for visitors and bills.
In pay TV, Virgin received almost three times the industry average number of complaints at 20 per 100,000 customers (the average is seven). Again, the data highlighted dissatisfaction with complaints handling and billing.
Ofcom says Virgin Media’s functionality is likely the result of its decision to open an investigation into consumers’ difficulties in canceling their contracts and how the company handles complaints. The regulator believes this would possibly have prompted more consumers to complain.
Fergal Farragher, Ofcom’s consumer protection director, said: “We acknowledge the impact of our investigation on Virgin Media’s complaints figures for this quarter, but are also aware that our investigation was in part based on complaints that customers had already made about Virgin Media’s services.”
A Virgin Media spokesperson said: “We are satisfied that the backlog of court cases in the third quarter is well below our expectations.
“As Ofcom acknowledges, this backlog is largely due to the announcement of its investigation in July, which then generated a higher number of court cases than would normally be expected. However, it should be noted that overall court cases over Virgin Media and O2 products still make up a very small proportion of our visitor base.
BT and O2 are at the bottom of the monthly mobile court case rankings, with six court cases per 100,000 consumers, double the industry average of three. The court cases here were about service and source (putting consumers in your network), as well as difficulties switching providers.
NOW Broadband and TalkTalk also won an above-average number of court cases in the fixed-line sector, while NOW Broadband also won an above-average number of court cases in the broadband sector.
Sky scored the most productive across the board, with the fewest visiting court cases across broadband, monthly cellular pay-per-view, landlines and pay-TV.
Energy bills for households with typical gas and electricity usage could fall in 2024 despite potential disruption to supplies because of international conflicts according to analysis from Cornwall Insight, writes Brean Horne.
The energy price cap set by market regulator Ofgem rose 5% on January 1, to £1,928 for the average home, but analysts at Cornwall Insight say the cap will fall to £1,620 from January 1. April 2024, representing a potential saving of £1,620. 308 consistent with the year.
It expects to fall back to £1,497 a year in July before rising to £1,541 in October.
The cap is amended quarterly to reflect adjustments in wholesale prices, which have fallen since November thanks to higher-than-expected European fuel inventories and favorable conditions from global sources.
The limit limits what suppliers can qualify for each unit of energy supplied and at constant costs. This is not a limit on bills, which will reflect usage.
Energy prices are typically volatile and subject to fluctuations due to a wide variety of factors, in addition to geopolitical events and issues.
Despite concerns about vegetable fuels affected by military activity in the Red Sea, the UK remains well supplied thanks to imports from the United States.
Dr Craig Lowrey of Cornwall Insight said: “Fears that events in the Red Sea will lead to higher energy costs have proven premature, and families can breathe a sigh of relief knowing that costs are expected to fall still further.
“Healthy energy stocks and a positive source outlook keep the wholesale market stable. If this continues, we may see energy prices reach their lowest point since Russia’s invasion of Ukraine [in 2021].
“While recent trends suggest a possible stabilisation, a full return to pre-crisis energy costs is not on the horizon [at the start of 2021, the value limit was less than £1,300]. Changes in where and how Europe supplies fuel and electricity, as well as continued market jitters over geopolitical events, mean that we will most likely still be facing prices of several hundred euros above the old averages for some time, potentially the new general for household energy budgets.
“Whether we can achieve long-term reductions in the UK’s energy costs will hinge on breaking free from the volatility of imported energy prices. To make a real and lasting impact, we need to commit to a sustained transition to homegrown renewable energy sources, reducing our reliance on the volatile international energy market.”
To reduce their energy expenses, households could opt for a fixed-term contract to save money. Shopping around can help you compare deals to find the most productive option.
Fuel stores will have to report changes to their petrol and diesel prices within 30 minutes, according to the government’s value tracking Pumpwatch’s proposals, writes Mark Hooson.
The Pumpwatch program, which is now open to the industry for consultation, aims to make it less difficult for motorists to locate the cheapest fuel in a database of parking prices in near real-time.
The Department of Energy Security & Net Zero believes consumers could save 3p per litre of petrol or diesel using the mobile apps, online maps, comparison websites and in-car devices which would become available once the database is up and running.
A 2023 report from the Competition and Markets Authority found that some fuel shops had overcharged drivers by up to 6p per liter by failing to account for falling oil prices, earning an extra £900m in 2022.
Edmund King OBE, president of the Automobile Association, said: “The glaring price disparity, of 10p a litre or more, between neighbouring cities had to end.
“Increasing profits by maintaining savings from lower fuel prices while consumers, businesses and inflation are deprived of relief is simply inexcusable. “
Since then, twelve of the largest fuel retailers, plus four supermarkets, have volunteered to participate in an interim programme run by the CMA to percentage their prices.
The government says those interventions have already had an impact, with costs falling by around 2p per liter week between November 13 and December 25.
Claire Coutinho, MP and Secretary for Energy Security, said: “We require stores to share real-time information about their prices within 30 minutes of any price change, helping drivers find the deal at the pump.
“This will put motorists back in the driver’s seat and bring the much-needed festival back to the tracks. “
RAC Fuel spokesperson Simon Williams said: “This is a vital day as it deserves to pave the way for fairer fuel pricing for everyone who drives.
“Unfortunately, there have been too many occasions where drivers lost out at the pump when wholesale costs fell particularly and discounts were not sufficiently temporarily or completely passed on through retailers. “
Drivers who used car finance arrangements, such as loans and acquired rental agreements, before January 28, 2021, may be eligible for reimbursement if an investigation filed through the Financial Conduct Authority (FCA) shows that “they were charged too much interest,” Brean Horne writes. .
Before the FCA’s ban on this practice came into effect on January 28, 2021, some lenders allowed agents (car dealers) to adjust the interest rates they presented to their consumers for car financing. Those who charged higher interest rates earned more commissions, which is known as discretionary commission. Arrangement of commissions.
The FCA says there have been a large number of visiting court cases over the amount they were charged before the ban came into force. These court cases have been largely rejected by the lenders and agents in question because they did not act unfairly. or cause losses to visitors.
However, in two cases, the Financial Ombudsman Service (FOS) sided with customers, prompting the FCA to investigate the extent of the issue.
If the FCA finds that a visitor has been unfairly sold car financing, they will get compensation; The main details on how it will be calculated and funded are yet to be determined.
Sheldon Mills, FCA executive director of customers and festivals, said: “We are taking a closer look at old discretionary commission arrangements in the car finance market following a large number of visitor complaints, which are being rejected by companies .
“If we detect widespread misconduct, we will act to ensure that other people are compensated in an orderly, consistent and effective manner. “
Aidan Rushby, chief executive of car finance app Carmoola, welcomed the announcement: “As a long-time success, the discretionary financing technique is compatible with scrap metal, so the FCA’s call for transparent disclosure, increased evidence of affordability and a culture of culpable lending sends a strong message to the industry that putting consumers first is essential.
Compensation would possibly be presented to consumers who:
The survey will come with customers who:
The FCA has paused the eight-week deadline for car finance companies to provide a final response to customer complaints received on or after 17 November 2023 until 25 September 2024.
This is to ensure that all customer complaints are managed in “a consistent, efficient and orderly way.” It also aims to prevent car finance providers from going bust.
Auto financing is covered through the Financial Services Compensation Scheme (FSCS), which means that the repayment will have to be paid out of lenders’ funds. If too many applications are approved at the same time, some auto finance corporations may file for bankruptcy. , leaving affected consumers penniless.
The FCA is also extending the length of time customers get to refer complaints about car finance claims to the Financial Ombudsman.
Usually, complaints must be referred to the FOS within six months of getting a final response from your lender. However, customers now get up to 15 months if they receive a response between 12 July 2023 and 20 November 2024.
Abby Thomas, Executive Director and Chief Ombudsman, said: “When other people apply for a car loan, it is imperative that they are dealt with and that the monetary implications are completely transparent.
“Unfortunately, that is not always the case. We’ve heard from more than 10,000 people who fear they were charged too much for their finance, and we know many more are waiting in the wings.
“We settled two court cases where we felt the way the commission arrangement between the lender and the car dealer worked unfairly for the consumer. Our decisions may pave the way for many more similar court cases that have not been resolved between businesses and consumers.
If you believe your car financing was sold poorly and you’re not satisfied with your lender’s response, you can file a complaint with the FOS for free.
Ofgem, the electricity market regulator, authorises three suppliers to restart the forced installation of prepaid meters in homes, writes Brean Horne.
This follows a nearly year-long suspension of forced installations of prepaid meters (without family permission) imposed on vulnerable customers.
EDF, Octopus and Scottish Power will be able to restart those installations of involuntary prepaid meters after complying with the strict established through Ofgem.
This includes conducting internal testing to identify improperly installed prepaid meters and reimbursing affected customers.
Authorised suppliers will also be required to provide information to Ofgem on a regular basis to identify any misuse of prepaid meter installation procedures as quickly as possible.
Customers can check whether an electric utility can forcibly install prepaid meters on the Ofgem website. Forced assembly of prepaid meters occurs when a visitor with a credit meter incurs large arrears and makes no effort to pay off their debt.
Although they are allowed to use this measure, EDF, Octopus and Scottish Power will only be able to accidentally install prepaid meters as a last resort.
They will have to comply with a strict set of regulations before taking action, as well as make at least 10 attempts to touch a scale ator and perform a scale at a wellness site before installing a prepaid meter.
The regulations also affect vulnerable and high-risk customers. This means that providers will not be able to forcibly install prepaid meters in homes with:
Tim Jarvis, director general for markets at Ofgem said: “Protecting consumers is our number one priority.
“We’ve made clear that suppliers must exhaust all other options before considering forced installation of a prepayment meter, and consumers can help themselves by reaching out to their supplier as soon as possible if they think they won’t be able to pay their bill, so payment options can be discussed.
“Our rules on when and how to install a prepaid meter are transparent and we will be hesitant to take action if suppliers act irresponsibly. “
While energy costs have risen to £94 for a typical household fuel and electricity since Ofgem’s value cap was raised to £1,928 on 1 January 2024, household budgets may come under further pressure in the coming months.
If you’re worried you won’t be able to pay your energy bills or have fallen behind, you need help and it’s vital to act quickly.
Our Coping with Your Energy Expenses Advisor outlines other tactics to ensure you can keep your energy payments at their maximum.
Today sees the scheduled increase in the price cap maintained by the energy market regulator, Ofgem. Average bills will rise by 5%, with a typical household on a dual fuel tariff paying in arrears by direct debit seeing their annual costs increase from £1,834 to £1,928.
For consumers who pay when they receive a bill in cash or cheque, the limit will increase to £99, from £1,959 to £2,058 for typical dual-fuel consumption. The limit for prepaid meter consumers will increase to £99, from £1,861 to £1,960, back for average dual-fuel consumption.
Ofgem is working with the Government to eliminate the price difference for prepaid customers, aligning their costs with those of direct debit payers, with the update planned for April 2024.
The cap, which is updated quarterly, limits what energy companies can qualify according to the unit of energy used and at constant rates. It does not limit the expenses themselves, which will reflect the amount of energy used.
Ofgem says the 5% increase reflects higher prices on wholesale energy markets. Analysts expect the cap to fall to around £1,850 in April thanks to lower ‘forward pricing’ of natural gas and the seasonal reduction in consumption as the winter recedes.
The figure will be confirmed in mid-February.
The April 2024 – March 2025 cap will come with a £16 “adjustment” to fund a range of measures imposed on energy suppliers through Ofgem, such as offering a faster and more constructive offer to consumers struggling to pay their bills.
Critics of the new limit hike point out that UK inflation stood at 3. 9% in November, according to official figures, and further falls are expected.
Ofgem is also called upon to review the permanent tariff regime, which states that tariffs are charged for connection to the fuel and electricity grids, regardless of actual usage. The regulator is carrying out a consultation procedure on the long-term of such tariffs, which we do not commend efforts to reduce consumption.
Consumer finances are under severe strain due to the cost-of-living crisis, with loan arrears rising by a quarter in the year to September, writes Jo Thornhill.
The figures come from the Household Finance Review of UK Finance, the industry agreement for the UK’s banking sector. Covering the third quarter of this year, they show that 99,480 mortgages are past due, up 24% from 2022 and up 9% from last quarter. .
UK Finance says the situation could get even worse as more people forgo reasonable fixed-rate loans and end up with more expensive offers. It adds that lending activity is subdued in almost all sectors, especially for borrowers with small deposits or home equity. .
It also notes that households are continuing to use savings to cover increased monthly bills.
At the end of the third quarter, savings deposits were 3% below their 12-month levels. This is a further acceleration from the 2% annual decline in levels seen in the second quarter of this year. There is a net relief in overall deposit levels. of £37 billion in the first 3 quarters of 2023.
With regard to mortgage lending, UK Finance says the home purchase market was extremely weak in the third quarter, with 26% fewer home moves compared to 2022.
New customer activity also declined in the first nine months of 2023, recording a 22% decline compared to the same time last year.
Banks say that for delinquent borrowers, the loan letter filed in June offers a variety of transitional options, such as switching to an interest-only loan or extending the term of their existing contract to make monthly bills more manageable.
Remortgage activity was strong in the third quarter, with affordability pressures leading more borrowers to enter into pass-through deals (new rates introduced through an existing lender) rather than refinancing with a new lender. Borrowers do not want to go through a full affordability assessment for a product portability agreement.
In 2023, approximately 1. 5 million borrowers cancelled fixed-rate transactions. Since the beginning of the year, almost nine out of ten remortgages carried out were internal product transfers.
This suggests that borrowers will continue to face affordability issues when it comes to remortgaging on the open market next year. UK Finance says there will most likely be a continued preference for product transfers until 2024.
Laura Suter, Director of Personal Finance at AJ Bell, says, “Mortgage arrears increased in the third quarter of this year as more people saw their fixed-rate agreement end and re-mortgage at significantly higher rates, meaning their payments fell.
“Currently, the loan statutes prevent those arrears from accumulating further. However, those are all temporary measures, and since we don’t expect interest rates to drop anytime soon, those homeowners will at some point have to face the truth of higher rates, and many of them will find themselves delinquent on payment.
“Anyone who is struggling to repay their loan or thinks they will struggle in the short or long term, contact their lender as soon as possible. You can get support and recommendations on its features without impacting your credit report.
Chancellor Jeremy Hunt’s Autumn Statement, delivered today, contained a package of measures to stimulate the economy and the overall tax burden ahead of the general election due in 2024.
From a non-public finance perspective, the focal point of his speech was a relief in National Insurance Contributions (NIC), paid for earning between £12,570 and £50,270, from 12% to 10%. Legislation will be introduced temporarily to allow this measure to come into force on 6 January 2024.
A user earning around £33,000 nationally will save around £450 a year.
You can read more about how the cut in NICs will affect you in Andrew’s analysis.
Hunt also announced measures to allow companies to meet their corporate tax obligations by offsetting capital investments.
The chancellor expects inflation to fall from the current 4. 6% to 2. 8% by the end of next year, before reaching the government’s long-term target of 2% by 2025. The economy is expected to grow by 0. 6% in 2023 and 0. 7% in 2023. % next year. The figure for 2024 has been revised downwards to 1. 8%.
Although discussed in the speech in the House of Commons, the declaration included a number of adjustments to the individual savings account regime from next year, adding the ability to open more than one specific type of ISA in a given tax year. All the main points at the end of this article.
Other measures contained in the bill include:
National Living Wage: Ahead of today’s speech, the government announced an increase in the National Living Wage, from £10.42 to £11.44 an hour, to take effect in April 2024. Eligibility will also be extended from age 23 to 21.
National minimum wage: Rates for young staff will also increase, with 18-20 year olds receiving an hourly increase of £1. 11 to £8. 60 per hour.
State pensions will be in line with the triple lock, rising by 8. 5% from April to £221. 20 per week.
Company pensions: The government will explore the possibility of giving Americans the legal right to require a new employer to make contributions to an existing plan, creating the concept of a lifetime “one-time retirement boat. “
Universal credit and other benefits will increase by up to 6. 7% from April, worth around £470 a year. Reforms will be implemented to inspire other people with social benefits to sign up for the hard work market.
Mortgage Guarantee Scheme, where the government backs the provision of 95% loan-to-value mortgages for those with a deposit of up to 9.99%, is to be extended until the end of June 2025. It had been scheduled to close at the end of this year.
Local Housing Allowance (LHA): This cap on the benefits tenants can get in the personal rental market will be higher from April after the Chancellor lifted the freeze on LHA fees, which linked them to rents in 2019-2020. Fewer sets benefited from the cap as rents rose. The Institute for Fiscal Studies says that when the LHA was frozen in 2020, it covered a quarter of leased personal property, yet that figure has dropped to one in 20. The chancellor proposes to reduce the A cap to the 30th percentile of rents, starting in 2023. The figures will provide 1. 6 million families with an average of £800 next year.
Self-employment: mandatory contributions to National Class 2 Insurance will be eliminated from April; Class 4 contributions paid by sources of income between £12,570 and £50,270 will be charged at a reduced rate of 8% (compared to 9%), also from April.
Small businesses: The government will act to tackle late payments, as called for by the Federation of Small Businesses. The freeze on business rates has been extended by a year, as has the 75% business rates discount for firms in the hospitality, retail and leisure sectors.
Alcohol Duty remains unchanged, with the next review scheduled for 1 August 2024.
Tobacco tasks on hand-rolled cigarettes will accumulate 10% more than the task indexing that applies to other tobacco products. This is at retail value inflation plus 2%, meaning that hand-rolled tobacco will accumulate through the RPI plus 12%.
Individual Savings Accounts: From 6 April 2024, it will be possible to:
In addition, it will no longer be mandatory to reapply for an inactive ISA (which has not been touched for two years) if you want to make a contribution again, while Innovate Finance ISA holders will need to invest in long-term assets. Real estate budget and open budget.
What does this mean for you?
Under existing ISA rules, an individual’s annual allocation of £20,000 of an ISA can be divided among other types of ISAs (e. g. £15,000 in a money ISA and £5000 in an inventory ISA), but only one of the types of ISAs is allowed. .
As of April, this restriction will no longer apply.
Dean Butler, managing director of Retail Direct at Standard Life, said: “The ability to start saving on some other monetary product in the middle of the fiscal year can become a pivotal win for other people in this scenario and may simply incentivise suppliers to their product rates.
“There are also likely to be some customers who want to mix fixed-rate deals and easy access savings to give them greater flexibility with their savings.”
Elsewhere, stocks and shares ISA holders have a little more flexibility when it comes to choosing their investments, with the ability to hold fractional shares in their account (a fractional share is a slice of a single share that is too expensive for many people to buy outright).
The government will have to consult on the main points of this change.
Innovative financial ISAs, which in the past only allowed investments in peer-to-peer lending and crowdfunding, have also opened up longer-term investment opportunities.
Clients will need to invest cash in long-term asset funds, which invest in long-term projects, such as real estate and infrastructure development, and real estate funds of indefinite duration.
Allowances will be frozen at £20,000 per year for ISAs, £9,000 for Junior ISAs and £4,000 (excluding government bonuses) for lifetime ISAs.
Rising prices for car parts, paint and labour have pushed car insurance premiums up to 9% in the three months to the end of September and up 29% over the past 12 months, according to the most recent figures from the Association of British Insurers. Jo Thornhill.
The average annual premium payment now stands at an all-time high of £561, £60 more than in the second quarter.
Insurers blame emerging prices in the auto repair market, which is driving up the cost of claims. These come with increases in the third quarter of 16% for curtain prices, 15% for labor, 11% for replacement parts, and 46% for other prices. , driven largely by energy prices.
In addition, insurers report that because cars are more complicated in terms of computer technology, they are more expensive and more difficult to repair. A shortage of skilled technicians also leads to higher prices, as maintenance must be delayed.
The fact that cars stay off the road for longer while maintenance is carried out also increases the cost of offering loaner cars, which also affects premiums.
The ABI is calling on the government to reduce the Insurance Premium Tax (IPT) rate, currently at 12%, to help motorists suffering from consequential charges. The Association says the IPT adds £60 to the charge of a car insurance premium.
IPT generated £7.45 billion in tax revenues last year.
Mervyn Skeet, ABI’s Director of General Insurance Policy, says: “Another quarter of the increase in auto insurance premiums will be a fear for families who are already suffering with emerging prices in other areas.
“Insurers continue to do all they can to keep motor insurance as competitively priced as possible, despite facing substantial increases in costs outside of their control.”
More than 16 million adults have missed at least one household bill payment this year, according to a report by the government’s Money and Pensions Service (MaPS), writes Bethany Garner.
Of those who didn’t make a payment, 14% said it was their first time.
The study, which surveyed 3,016 UK adults in October, was commissioned to mark Talk Money Week, running this week.
The goal is to get people talking about money and doing anything that can benefit their finances, such as contacting creditors, taking steps to save energy, or using a credit card with balance transfer to avoid costly interest payments.
The study found that credit card and application fees are the maximums that are likely to go unpaid. Of the respondents who said they left an unpaid invoice this year, 11% skipped a credit card refund, while 10% didn’t receive an invoice from the application.
A further 10% said they had defaulted on a council tax payment, while one in 20 had defaulted on a rent or loan payment.
Despite the higher prevalence of respondents not paying their bills, 15% told MaPS they would do nothing if faced with monetary difficulties.
Meanwhile, over a third of respondents (38%) said they would not contact their creditor if they fell into arrears, with 20% of this group feeling too embarrassed to discuss the issue, and 15% unwilling to disclose their personal circumstances.
Another 15% didn’t know that creditors can also do anything to help them, although energy providers are obligated to help affected consumers find a payment solution, while other creditors would likely offer a payment plan or temporarily suspend payments.
Charlotte Jackson, head of guidance at MaPS, said: “If you think you haven’t made a payment, let your creditor know. And if it’s already happened, it’s not too late to consider flexible debt counseling. Taking action now will help you have some control over what happens, look at your options, and avoid the havoc debt can wreak. “It can be very difficult to take that first step, but it can make a big difference. If you’re not sure where to start, our free and impartial advisor to start the verbal exchange is now available through our MoneyHelper service.
Fraudsters stole £580 million from British consumers and businesses in the first six months of 2023, according to data from industry body UK Finance, writes Bethany Garner.
Authorised payment scams (APPs), in which criminals trick victims into moving cash under false pretenses, account for £239. 3 million of those losses, the highest figure ever recorded. Approximately another 116,000 people have been affected.
This represents a 22% increase in APP losses in the first six months of 2022.
According to UK Finance, more than three-quarters of app scams originate online, and social media platforms make it less difficult for criminals to succeed.
However, they account for 32% of monetary losses, as this category includes a higher proportion of lower-value frauds, such as procurement scams (where consumers are tricked into buying goods that never arrive).
These scams accounted for £40.9 million of losses in the first half of 2023, up 43% year-on-year.
Laura Suter, head of private finance at investment platform AJ Bell, said: “Ultimately, much of this fraud is spread on social media, and the ease of generating accounts and posts allows fraudsters to expand their net.
“The speed with which a scammer can contact many other people through social media, compared to scams where the scammer has to call one person, means more people can be targeted. “
PPP scams in which the victim contacted by phone accounted for 45% of the losses recorded, while they only accounted for 17% of the cases.
Earlier this year, the Financial Conduct Authority completely banned bloodless monetary calls, meaning consumers treat any unforeseen finance-related phone calls as a scam (see article below from Aug. 2).
Criminals who continue to contact consumers by telephone sometimes become involved in investment fraud, where victims are persuaded to donate their money to purchase false or misleading investment opportunities.
Investment scams made up almost a quarter of financial losses from APP fraud in the first half of 2023 at £57.2 million, UK Finance found.
Although monetary losses from PPP fraud reached record levels, £152. 8 million in losses (64%) were returned to those affected between January and June 2023. This is a 13% increase on the £135. 6 million returned to those affected by PPP fraud in the past. year. first part of 2022.
Ms Suter said: “Many people feel ashamed or embarrassed that they have been defrauded and therefore do not report it, while others assume that nothing can be done to get their money back, so it is not reported.
“Anyone who is a victim of fraud should contact Action Fraud and their bank, as they may be able to get their money back. “
Netflix has increased its subscription prices, effective immediately, more than 18 months after its last implementation.
In a letter to shareholders yesterday, Netflix said costs for UK subscribers would rise to £7. 99 for its Basic package (up to £1) and £17. 99 per month for its Premium tier (up to £2).
It notes in the letter: “Our starting price is extremely competitive with other streamers and at $6.99 (£5.77) per month in the US, for example, it’s much less than the average price of a single movie ticket.”
Netflix has four bands of membership. In addition to the Basic (which allows one screen) and Premium (four screens) tiers mentioned above, there is a ‘with ads’ tier and a standard tier, priced at £4.99 and £10.99 respectively. These prices are not being increased.
The streaming service has added around nine million new subscribers worldwide after banning password sharing among its users earlier this year.
Subscriber numbers for the third quarter of the financial year were up 11% on the previous year, at 247 million. Shares in the company (NFLX) rose by 12% following the announcement. To learn more about investing in Netflix, read our guide here.
Netflix is rarely the only streamer converting its prices. Disney will also be more expensive from November 1 as it introduces a new tiered strategy for subscriptions.
From that date, a subscription with classified ads will charge £4. 99 per month, a subscription will charge £7. 99 per month, and a premium subscription will go up to £10. 99 per month.
Previously, subscriptions cost £7.99 for all users. Existing subscribers will be upgraded to the premium tier for no extra fee until their subscription comes up for annual renewal after 6 December.
Streaming platforms negotiated measures with actors’ unions, writers and directors over the summer, and disputes over residual bills (royalties from ongoing broadcasts and TV episodes) led to productions being halted.
While the Writers Guild of America (WGA) reached an agreement with the Alliance of Motion Picture and Television Producers (AMPTP) on September 24 after more than days of strike, the dispute between the Screen Actors Guild and the American Television and Radio Federation of Artists (SAG-AFTRA) and the AMPTP is ongoing.
New registrations were up 21% in September, with the new “73” registration, introduced earlier this month, generating its classic surge in the market, writes Jo Thornhill.
In September, 272,610 cars were registered, which is the fourteenth consecutive month of accumulation and the second busiest month of the year after March (when the ’23’ registration was released), according to figures from the Society of Automobile Manufacturers and Traders (SMMT). ). ).
Fleet car sales drove much of the growth, with 143,256 new vehicles registered. This is a 40.8% uplift on figures from September 2022. Overall market share for fleets is now 52.5%.
Passenger car registrations increased by 5. 8% year-on-year. With 122,944 new cars registered, this is September’s figure from 2020, but the numbers are still around 20% below pre-pandemic levels.
Distributors by brand and style in September were:
Registrations of plug-in hybrid vehicles (PHEVs) increased 50. 9% year-over-year and battery electric cars (BEVs) recorded their 41st consecutive month of growth, with 45,323 drivers making the switch, an increase of 18. 9%.
But increases to BEV registrations were driven by fleet purchases, with private BEV registrations falling by 14.3%.
Registrations of natural gas vehicles increased by 15% in September (year-on-year) and now constitute 38. 7% of the total market (up from 40. 7% in 2022). Diesel cars fell 4. 2% last month and make up a 3. 6% market share (compared to 4. 6% last year).
The market for new cars, especially electric cars, has been disrupted by the government’s decision to delay a ban on the sale of new cars with internal combustion engines for years, until 2035.
Despite the change, announced through the prime minister last month, brands will still have to ensure that a minimum percentage of their sales are electric cars from next year. By 2024, that figure will be 22%, and that percentage will increase. both one and both years later.
Mike Hawes, chief executive of SMMT, says the decline in personal EV registrations underscores the importance of offering incentives to motorists: “With stricter EV [sales] targets for brands coming into effect next year, we want to drive the transition, encouraging all motorists to make the switch.
“This means adding carrots to the stick: creating personal acquisition incentives aligned with advertising benefits, matching on-street VAT with national off-street rates, and requiring the deployment of charging systems in line with how electric car sales will now need to be dictated. .
“The upcoming Autumn Declaration is the best opportunity to create the scenarios that ensure zero-emission mobility, which coincides with our shared ambition of net-zero emissions. “
At present, the electricity used to charge an EV at home attracts VAT at 5%, while on-street energy suffers VAT at 20%.
Disney’s streaming platform, Disney+, is following Netflix’s lead with its own crackdown on account sharing.
The service, which features popular TV series such as Bluey and several Star Wars shows, will take steps to prevent paid subscribers in Canada from sharing their passwords with non-subscribers starting Nov. 1.
He is expected to lead Netflix and launch his anti-sharing message in other countries, including the UK, later in 2023 and 2024.
The “House of Mouse” has begun informing Canadian subscribers that their accounts will not be shared outside of their own home, following an update to the terms and conditions of service that will take effect in early November.
The text reads, “Unless otherwise legal through your service plan, you may not percentage your subscription outside of your household. “”Home” means that all appliances related to your main non-public are inhabited and used by the people who are living there.
Like Netflix, Disney will monitor how its subscribers use the service, and if it suspects users are sharing their login credentials, it will generate warnings. Repeated violations, per their new terms and conditions, will result in account closure.
The start of the crackdown coincides with the introduction of new Disney+ subscription tiers, including a cheaper subscription subsidised through advertising.
Netflix was first to the market with its sharing crackdown in the spring. While it was unpopular with users and expected to result in unsubscriptions, Netflix says it has since added 5.9 million subscribers.
Those who shared their accounts with friends and family had the option of paying a premium, per user, to continue sharing their accounts effectively.
A popular Disney subscription currently costs £7. 99 per month or £79. 90 per year. Starting November 1, three features will be available to subscribers:
The costs and provision of veterinary facilities in the UK are being reviewed, amid fears that puppy owners won’t get smart deals during the cost-of-living crisis, writes Candiece Cyrus.
The Competition and Markets Authority (CMA), which presented the study today, says the increase in the cost of vets has outpaced inflation.
The study also found that puppy owners don’t get the information they need to make the right decisions when it comes to finding the right treatment for their puppies, as well as knowing which vet to go to and which facility to buy.
It says pet owners may be unaware that one company can own hundreds of practices, which can reduce competition and choice. Its most recent data shows that 45% of practices were independent in 2021 compared to 89% in 2013.
The CMA launched an investigation into the biggest group, IVC, in December last year after it acquired eight independent vet businesses. In total IVC owns 1,000 practices across the UK.
In today’s announcement, the CMA also states that customers’ interests may be harmed through companies promoting products such as diagnostic tests and remedies in specialist services provided through its parent company.
Sarah Cardell, chief executive of the CMA, said: “Caring for a puppy in poor health can create genuine monetary pressure, especially on most other cost-of-living issues. It’s very important for other people to get transparent information and costs. “to help them make the right decisions.
“When a puppy is rarely feeling well, it needs urgent treatment, which means puppy owners can’t shop around for the best deal, as they do with other services. This means they may not have the right information to make informed decisions. in what can be a painful time.
The CMA asks puppy owners and vets about their reports via the gov. uk website, adding whether puppy owners pay for the vet upfront or through a claim on a puppy insurance policy.
Forbes Advisor found that 47% of puppy owners haven’t purchased insurance for their puppies, and 45% say it’s because insurance prices are too high. However, Forbes Advisor research shows that a reasonable maximum profit policy can cost around £11 consistently. with a month for a dog.
The amount that a puppy owner will pay for insurance reflects, among other factors, the charge of the veterinarian where he or she lives. However, while shopping, puppy owners can find deals on their insurance.
A spokesperson for the Association of British Insurers said: “In the absence of an NHS for puppies, insurance can give you peace of mind that if anything happens to your puppy, it will be covered. The cost of puppy insurance largely reflects the maximum veterinary treatment charge, adding drugs and diagnostic equipment, which can lead to more expensive claims, with puppy insurers shelling out £2. 8 million a day in 2022. ”
The CMA plans to provide an update on its review in early 2024.
Direct Line sets aside £30 million to reimburse home and auto insurance consumers who were overcharged for policy renewals, writes Mark Hooson.
The insurer agreed to publish a “review of activities beyond” to investigate errors it made in relation to Financial Conduct Authority (FCA) regulations relating to pricing for new and existing customers.
The rules, which went into effect on Jan. 1, 2022, stipulate that insurers will be required to charge new and existing consumers the same prices for equivalent coverage.
However, existing Línea Directa customers had to pay higher renewal fees than they would have paid as new consumers.
In a statement the insurer said: “An error in our implementation of these rules has meant that our calculation of the equivalent new business price for some customers failed to comply with the regulation. As a result, those customers have paid a renewal price higher than they should have.”
The FCA says this is the first time a formal voluntary requirement has been agreed with a company in relation to its home insurance underwriting rules.
Direct Line consumers do not want to take any action and will be contacted through Direct Line if they have been affected by an overload.
Russ Mould, chief investment officer at AJ Bell, said: “The biggest damage to Direct Line due to the £30 million charge for overcharging visitors for insurance products is to its logo and reputation; The monetary charge will also be painful.
“It compounds a really tough period for the company – inflationary pressures on claims have helped undermine its credentials as a reliable income stock.”
Renting is, on average, cheaper than buying a home for the first time since 2010, according to data from online property portal Zoopla, writes Jo Thornhill.
The typical monthly rent is now £122 less expensive than buying an average-priced asset as a first-time buyer. The update is due to emerging loan rates that are driving up average mortgage loan payments.
But while rents are now, on average, less expensive in the U. K. than loan payments from first-time buyers, rents remain more expensive in six regions, adding Scotland, the North East, Northern Ireland, Wales, Yorkshire and Humberside, where average assets to buy tend to be less expensive.
In London, the average first-time buyer home costs £522,000, according to Zoopla. If buyers have a 15% deposit of around £78,000 it would mean a monthly mortgage repayment of £2,546 (this is assuming a mortgage rate of 6% over a 30 year term). But to rent the equivalent property would cost £2,053, a difference of almost £500.
By contrast, in Scotland, where the average first-time customer value is £127,000 and the average loan payment is £620 per month, rents are £748 for the same term, making renting more expensive.
Historically, renting has been less expensive than buying, but as rental demand has increased, the festival of smart, quality rental housing has boosted hiring. This means that the average rent has been more expensive than buying similar assets for more than a decade. in maximum portions of the country.
Izabella Lubowiecka, senior property researcher at Zoopla, says: “It’s a tough housing market for first-time buyers, with high mortgage rates pushing up costs for those attempting to step onto the ladder. In fact, our research found that nationally, it’s now cheaper to rent a home than buy one for the first time since 2010.
“But the scenario varies enormously across the country. In much of the North, Scotland and Wales, it is still more cost-effective to pay off the loan monthly than to pay the rent.
“We’re seeing first-time buyers become more artistic when it comes to moving: they’re looking at other spaces to start their search, more modest properties or buying with friends or family.
“We also expect housing costs to fall by around 5% over the course of 2023 and interest rates have probably already peaked, which may also be the incentive that many first-time buyers want to go ahead with their purchase. “
Rising interest rates are pushing more people to move and return to cities, a trend contrary to that seen during the Covid-19 pandemic, when there was an exodus out of urban areas.
A survey of more than 2,000 people conducted through asset tax experts, Cornerstone Tax, found that one in 10 people (six million) intend to move closer to a city in the next five years due to the benefits of proximity to services, such as schools, transportation, links and shops.
Additionally, 11% of staff say they have had to leave a rural setting because they may simply not be able to afford living and commuting to work. Many have reduced their workforce and now rent homes closer to the city.
Younger workers are leading this march, with more than one in five aged 18 to 24 saying they’ve moved from a rural area to a city since the pandemic.
According to the Association of British Insurers, the cost of motor insurance has reached an all-time high, writes Candiece Cyrus.
It found the average premium between April and June this year was £511 – an increase of 7% on the previous quarter’s figure of £478 and 21% up on the same period last year. The figure is at its highest since ABI started collecting this data in 2012.
The average price paid by those renewing their cover rose by £36 on the previous quarter, to £471, while the average premium for a new policy was up £21 to £566.
ABI says the difference reflects the other threat profile of new and refurbished customers. For example, a new visitor is more likely to be a younger, less experienced driver.
It says motor insurers paid £2. 4 billion in claims in the first quarter of this year, representing a 14% increase on the first quarter of 2022.
The cost of vehicle repairs soared by 33% in the year since the first quarter of 2022 to £1.5 billion – the highest figure since ABI started recording this data in 2013.
The price of spare parts for many popular cars has also risen by 12% to 21% over the past year, while prices for hard work have reportedly risen by as much as 40%.
The research of the consulting firm Ernst
The study found that for every pound earned through motor insurers in premiums, they paid £1. 10 in claims and operating costs, resulting in a figure known as the “loss rate” of 110%.
Mervyn Skeet, ABI’s Director of General Insurance Policy, said: “Times continue to be tough for many motorists and auto insurers. While many families face higher living bills, no one sees their car insurance charge passing.
“Insurers remain committed to ensuring that auto insurance remains as competitive as possible, but this is complicated as prices continue to rise.
“We urge anyone involved in the possibility of taking out their insurance to talk to their auto insurer to see what features might be available. And despite the pressures on charges, it can still be cost-effective to look for the policy that meets your desires with maximum productivity at the most competitive price.
The government is consulting on plans to ban direct phone calls that provide monetary products, writes Bethany Garner.
The intention is to ensure any cold call on a financial topic can automatically be regarded as a scam.
These plans, first unveiled on May 3 (see dated article below), are designed to fight scammers who knock victims out of nowhere to offer them fake investment opportunities or other non-existent or fraudulent monetary services.
Pension-related cold calling has been banned since 2019, but those new measures will affect all monetary products, adding insurance, cryptocurrencies and investments.
According to figures from the City of London Police, fraudulent investment schemes cost their victims £750 million between 2022 and 2023 alone.
Andrew Griffith, Economic Secretary to the Treasury, commented: “Scammers have long used cold calling to solicit money and products to manipulate and lie to the public in scams.
“We will ban bloodless calls for all customer monetary products and services, so the public can be sure that it is not a valid business if they receive a call about a monetary product without their consent. “
The ban is part of the government’s anti-fraud strategy, which will also require payment processors to reimburse consumers who fall victim to legal “push payments” scams.
During these scams, victims are tricked into sending money directly to a fraudster, who may be posing as a legitimate business or government body. The regulations will come into effect in 2024, and apply to around 1,500 payment services.
In addition to these measures, a new online advertising program aims to fight fraudulent ads on social media, a key communication channel for fraudsters.
Anthony Browne MP, a vocal anti-fraud campaigner, said: “Eighty percent of fraud is cyber-enabled and often starts with scam social media posts, a fraudulent email or false advertising, and this makes engaging with the tech sector particularly important.”
Tom Selby, head of retirement policy at AJ Bell, recommends avoiding investment systems that offer guaranteed returns: “Scammers promise double-digit returns through exotic investments in remote locations. Promoting cryptocurrency investment “opportunities” has also become an increasingly popular medium for scammers. .
“The unfortunate truth is that even with new regulations and strict enforcement, scammers will continue to loot people’s hard-earned savings. So it’s vital, whatever the government does, that the British people remain calm. “
Selby says other people just hang up if someone contacts them to tell them about their finances out of the blue, and that they only deal with regulated money advisors who are on the Financial Services Authority’s registry.
The consultation will remain open until 27 September. Replies are invited to: Financial. coldcallingban@hmtreasury. gov. uk
A two-year era that began at the height of the Covid-19 pandemic in 2020 saw the UK enjoy a retail investment boom, according to the Financial Conduct Authority (FCA), writes Andrew Michael.
The latest FCA Financial Lives survey of more than 19,000 respondents indicates that 41% of adults in the UK (or 21. 8 million more people) owned some investment product in May 2022, an increase of almost two million (37%) in two years. earlier.
The regulator says that direct holdings of shares, held by 21% of the UK population and equating to 11.3 million adults, and stocks and shares ISAs (individual savings accounts), owned by 17% of the population representing 9.1 million adults, continued to be the most-commonly held investment products in 2022 “by far”.
He added that the total number of adults owning stocks and shares increased by one point between 2020 and 2022, and through 3 issuances for ISA stocks and shares.
The FCA reported that the number of adults holding crypto assets has nearly tripled in the past two years, from 2% in February 2020 to 5. 8% in May 2022.
According to the regulator, men were more than one-and-a-half times more likely to invest in May 2022 than women. He adds that investing is strongly related to age and income, and that older people and adults with older relatives are more likely to have investment products than younger adults or those with lower incomes.
The FCA said there had been a notable increase in the proportion of young adults – that is, more young men – owning investment products between 2020 and 2022. The proportions of 18- to 24-year-olds and 25- to 34-year-olds The products holding investment rates have increased. These revenues increased by nine and 11 percentage points, respectively.
On average, young new investors tend to have a higher appetite for threats than other investors. About one in six (16 percent) say they have a moderate to high willingness to accept threats when investing, compared to four percent of new investors over the age of 55 and 12 percent of all investors.
Over half (56%) of new young investors said they held one or more high-risk investment products. For most, these were crypto assets, with 46% of new young investors saying they held these.
The FCA said ownership of high-risk investment products had gained popularity during the two years in question, with 8% (or 4. 1 million) of the adult population owning crypto assets, peer-to-peer lending, and cutting-edge finance. ISA and investment-based crowdfunding or a combination of these, up from 4% ($2. 3 million) in 2020.
Laura Suter, Director of Personal Finance at AJ Bell, said: “A giant proportion of those new investors are risk-averse men who invest outdoors, with tax envelopes and use social media for their studies, which means there’s a chance they’re in for a surprise. “Ultimately, for some of this new wave of investors.
“Two-fifths of new investors are investing directly in stocks outside of ISA packages, likely due to the surge in trading applications that the pandemic blew up. Although many prefer to invest directly rather than through funds, this is unlikely to be the ideal starting point for many green investors.
The most recent study by Financial Lives also found that 7. 4 million people tried, unsuccessfully, to reach one or more of their financial service providers in the year to May 2022.
It also said that less than a proportion of UK adults, or 21. 9 million people, have confidence in the UK monetary sector, and just over a third (36%) believe that major monetary companies are fair. and transparent in the way they treat them.
The regulator’s findings come just days before the arrival of the FCA’s duty-to-consume regime. The FCA expects Le Devoir to bring about a fundamental shift in the monetary landscape that “encourages festivity and expansion based on the highest standards. “
Sheldon Mills, Chief Executive Officer, Client and Festival at the FCA, said: “Our duty as a client will be to adapt our ongoing work to the way firms provide help to visitors; Contacting your supplier is the starting point for help, so we will be running with them to this area.
Following his online meeting yesterday with the chief executives of Asda, Tesco, Morrisons and Sainsbury’s, as well as the bosses of BP, Shell and Esso, energy minister Grant Shapps has told retailers to stop overcharging for fuel, writes Jo Thornhill.
In a video posted on social media, Shapps said, “When your costs went down, they kept them high and refused to pass the savings on to you.
“There is no excuse and the government says enough is enough. We demanded an end to additional billing soon and I told employers that they had to hand over their valuable data. This means that we will be able to find the most productive business and You can receive an alert if someone tries to scam you again.
While Mr Shapps did not quantify the level of overcharging or specify what might be deemed a fair price, a Competition and Markets Authority (CMA) report published earlier this month found some retailers have been over-charging drivers up to 6p per litre.
The CMA said this amounted to an additional profit of around £900 million for stores last year.
The idea of creating a real price database is that drivers can simply compare fuel prices in real time with those at local pumps, for example through an app or on comparison sites. “Prices.
It is thought that, if retailers spurn the opportunity to sign up voluntarily to the initiative, the government will consider making it a legal requirement.
Shapps said he would also appoint a government company to monitor the fuel and alert the government to emerging costs. He hopes that the move will inspire a festival in the sector and diminish the matrix.
Critics of the task recommend that it could lead to motorists converging on establishments that offer the cheapest prices, leading to queues and traffic jams.
Bank of England Governor Andrew Bailey has also pointed to high gasoline costs as a factor keeping inflation high. Inflation was recorded at 8. 7 percent in May (the Bank’s target is 2 percent) and was the driving force for the immediate period. Rising interest rates.
June inflation will be released on Wednesday through the Office for National Statistics and is expected to fall to 8. 2%.
An increasing number of families are feeling the consequences of emerging borrowing or rent costs, as well as much higher spending on food and energy in addition to gasoline.
A new Resolution Foundation report shows that total household wealth has fallen by £2.1 trillion over the past year as interest rates have climbed – the biggest fall as a share of GDP since World War II.
Renters in Great Britain are more likely to report a rise in living costs than mortgaged homeowners, according to the Office for National Statistics (ONS), writes Bethany Garner.
The most recent official cost-of-living data, aggregated between February and May this year, found that, among renters, more than two in five (42%) reported an increase in their prices over the past six months, up to 32% of renters mortgage holders.
This is despite successive bank rate hikes that are driving up the cost of mortgages for adjustable-rate borrowers – and new two-year fixed-rate transactions that average prices of just around 7%.
The ONS also found that 4 in 10 renters (43%) said they found it “very” or “somewhat” difficult to make their payments, compared to 28% of loan holders.
Paul McGuskin, from pension consultancy Broadstone, commented: “Current knowledge not only shows that a much higher proportion of renters are struggling to meet their monthly payments, but they are also much more likely to face monetary vulnerability. “
Average rental charges in the UK rose 1. 3% in the month ending June, according to the HomeLet’s Rental Index, and are up 10. 4% from last year. The average cost of renting a house in the UK has now risen to £1229 according to the calendar. month.
A separate published study shows that hiring increases could have a disproportionate effect on cash-strapped students who face increases of up to 50% when they leave a college apartment to enter the private market.
Around a third of loan holders (32%) have also noticed their home prices in the last six months, according to the ONS, and loan owners are most likely passing on higher prices to tenants.
New car registrations grew by almost 26% year-on-year in June, marking the 11th consecutive month of growth, according to data from the Society of Motor Manufacturers and Traders (SMMT), writes Candiece Cyrus.
Supporters of electric cars are calling on the government to reduce VAT on public charge from 20% to 5% to match the rate paid through those who can rate their cars at home.
Battery electric vehicle (BEV) registrations increased by 39% compared to June 2022 as around 32,000 individual and fleet buyers opted for these zero-emission vehicles. This represents around 18% of the monthly total of 177,000 new vehicle registrations.
80,000 passenger cars were registered in the month (a year-on-year increase of 15%), while giant fleet registrations rose by 38% to around 93,000 units.
Petrol engines remain the vehicle of choice for many, with more than 70,000 registrations, an increase of 13. 5% through June 2022. Diesel registrations fell by 22% to just 6,000 vehicles.
Around 21,000 drivers registered a hybrid vehicle (HEV) – up 40% year-on-year and accounting for around 12% of total registrations. These vehicles are powered by an internal combustion engine and electric motor.
Approximately 13,000 drivers registered a plug-in hybrid vehicle (PHEV), representing 7% of all registrations in June and a year-on-year increase of 66%. PHEVs are HEV vehicles that can be charged from an external power source.
Despite the growing popularity of electric cars (EVs), experts say there is still a long way to go to drive the transition to electric cars to meet the government’s zero-emission vehicle mandate, which requires 22% of automakers’ registrations to be BEVs. Registration until 2024.
Mike Hawes, chief executive of SMMT, said: “The new car market is developing and developing in an eco-friendly way, as the attractions of electric cars are obvious to more drivers. But to meet our climate goals, we want to move even faster.
“Most EV owners appreciate the convenience and savings of charging at home, but those who don’t have a driveway or designated parking area have to pay 4 times as much tax for the same amount of energy.
“This is unfair and risks delaying further adoption. Therefore, reducing VAT on public EV charging will make owning an EV fairer and more attractive to even more people. “
James Hind, managing director of online car marketplace autowow, said: “The way forward is that we see the new car market in the UK entering its eleventh consecutive month of growth.
“While we’re a little way off the 22% battery electric vehicle registration figure needed for the zero emission vehicle mandate, the BEV market share has hit record levels for uptake. Still, there’s room for improvement as we cross the six-month countdown mark.”
Last year, drivers were overcharged for fuel by around £1 billion, according to new official figures announced alongside plans to force petrol stations to make their costs public.
The UK’s Competition and Markets Authority (CMA) has found drivers have been short-changed by weakened competition at the forecourts since 2019, particularly among supermarkets – although it concedes that these retailers remain the cheapest places to fill up.
The CMA’s research found increased profit margins cost drivers an extra 6p per litre between 2019 and 2022. In 2022 alone, this totalled £900m.
Sarah Cardell, director of the CMA, said: “Competition at the pump is not working as well and anything you want to replace temporarily to cope with this.
“Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins.
“We want to restart the festival among the fuel stores. He wants drivers to compare existing costs to make stores more competitive for their businesses.
To increase the festival and reduce prices, the CMA plans to establish a national “search for fuel” program that would allow motorists to find the cheapest fuel locally.
The government has agreed to bring in legislation that will force retailers to publish their prices to power the service. The CMA estimates that the scheme could save the driver of a typical family car £4.50 per tank-full by driving to stations only five minutes away.
Grant Shapps MP, energy security secretary, said: “Some fuel retailers have been using motorists as cash cows – they jacked up their prices when fuel costs rocketed but failed to pass on savings now costs have fallen.
“Today I am applying the CMA’s recommendations and status to consumers: we will punish fraudulent stores to reduce costs and hold them accountable by giving new powers to the law to increase transparency. “
The government will consult on the design of the new program in the autumn. Meanwhile, the CMA is creating a voluntary program that encourages stores to percentage and update their fuel prices.
Similar schemes have been successful in Germany and Australia, where drivers have saved A$93 a year thanks to the data.
In its latest fuel value report, the AA engine company found that unleaded petrol prices had risen from 146. 9 pence per litre at the end of April to 144. 7 pence per litre at the end of May. Meanwhile, diesel prices fell from 161. 1p per litre to 153. 9p per litre.
It found the South East and London were paying the highest prices for petrol and diesel, respectively, while Northern Ireland’s drivers were paying the lowest prices for each.
Jeremy Hunt MP, Chancellor of the Exchequer, chaired a summit meeting with market regulators, joined by the Competition and Markets Authority, the Financial Conduct Authority, Ofcom (telecoms), Ofgem (energy) and Ofwat (water).
The government says it wants regulators “to work at pace to guarantee markets are working properly.”
Hunt says that with the decline in wholesale energy and other costs, consumers are starting to see benefits, adding lower costs and lower bills.
The government is also keen to make sure that banks pass on emerging interest rates to savers and do not set a disproportionate margin between the rates charged to borrowers and what they pay into savings accounts.
Hunt said: “I’m pleased that we’ve reached an agreement with regulators to act with urgency in spaces where consumers want the maximum to make sure they’re treated fairly. Businesses will also have to play their part and I will be closely monitoring their developments.
The Chancellor also agreed with regulators on a new action plan for consumers, especially the most vulnerable.
The Financial Conduct Authority has agreed:
The Competition & Markets Authority has agreed to:
Telecoms regulator Ofcom agreed:
Water regulator Ofwat has agreed:
Energy regulator Ofgem has agreed:
Regulators agreed to provide regular updates to the Treasury on its progress and that a follow-up meeting would be held later this summer. The FCA, Ofcom, Ofwat and Ofgem will also work together to set common expectations for the care of customers in monetary difficulty.
Interest increases will add thousands of pounds to loan bills when borrowers lend again in a new transaction in the coming months, writes Jo Thornhill.
Use our calculator to find out how much you would pay on your loan at other interest rates.
Earlier this week, the Institute for Fiscal Studies said that raising the bank rate from 0. 1% in December 2021 to 4. 5% last month would result in a 20% drop in the source of disposable income for about 1. 4 million lenders.
That’s because their loan payments, when they lend again in the coming months, will add up to an average of £280 per month. Borrowers between the ages of 30 and 39 will see an increase of £360 per month on average.
More than a million borrowers with adjustable-rate and follow-on mortgages will see their payments rise almost after the Bank of England’s further bank rate hike from 4. 5% to 5%, its highest point since 2008.
So far, the government has refused to offer assistance to borrowers in the form of a relief package and has called on lenders to adopt a comprehensive strategy and offer assistance to borrowers who may be in difficulty.
This will most likely involve allowing borrowers to move to an interest-only loan or extending the term of the loan to reduce monthly costs.
The effect of emerging loan rates on borrowers is expected to be dramatic, especially for those who have little additional cash left in their monthly budget, as energy and food costs have also risen rapidly over the past year.
The following calculations show how much typical borrowers will pay with 25-year loans at interest rates in competitive two-year fixed-rate offers.
A borrower with a £150,000 repayment loan (with 10% equity in their property) who is now coming to the end of a two-year steady rate will likely have an interest rate of around 2. 5% and monthly bills of £673. , for example.
If they remortgage at one of the most productive two-year constant rates (90% LTV) at present, around 5. 99%, their new monthly bills will be £965 – £292 more. This represents a cumulative charge of £3,504 in a year.
The same borrower with a £250,000 loan (90% LTV) will have to deal with new monthly bills around £488 more than before, i. e. £5,856 more per year.
A homeowner with a £300,000 loan and 40% equity in their property, who lately paid a constant two-year rate of 2. 5%, could get a new two-year solution at around 4. 8% today. This borrower can access lower constant rates owed. to the highest percentage of equity in your home.
But rate rises will also mean a sharp rise in monthly bills for that borrower, from around £1,345 now to £1,718 after the new mortgage. That’s more than £4,470 in additional bills per year.
While many banks and mortgage lending corporations have already priced in an increase, steady average lending rates are expected to begin to emerge in the coming days as lenders adjust their costs to reflect the new reduction rate.
Karen Noye, a loan expert at Quilter, says it’s a stressful time for millions of borrowers, but burying your head in the sand is the worst thing you can do: “The end effect is that there is now a real threat that other people will be left behind. . .
“If he’s in that position, he can do something. Talking to your lender deserves to be your first port of call. They could possibly offer you a repayment plan, loan vacation, or even extend the term of your loan, which can have a big impact on monthly payments.
Borrowers should also remember that deferring interest, suspending payments or extending the term of a loan will increase the total amount to be repaid.
The cost of renting a UK home climbed by 10.4% in the 12 months to April – meaning a typical tenant starting a new let must now shell out £1,126 a month, or £928 when stripping out London, writes Laura Howard.
This is the consecutive month of double-digit growth, according to Zoopla’s latest rental market report.
After outpacing profit expansion over the past 21 months, rental prices now average 28. 3% of pre-tax tenant wages, up from 27% over the past 10 years.
The extra strain on renters’ monthly budgets comes on top of already crippling household bills and food costs, as annual UK inflation remains at 8.7% – more than four times its target.
The Office for National Statistics will update the official inflation figure (Wednesday), with some expecting it to fall further towards 8%.
Zoopla says a “chronic imbalance between demand and demand” is to blame for emerging rents, with landlords forced to sell or raise rents in the face of rising loan rates.
According to Zoopla’s estimates, in London and the South East, where costs are high and rental yields are low, they account for 51% of sales.
Rental prices vary widely across the UK.
Rents are rising fastest in Edinburgh, at a rate of 13. 7%. The average monthly price of a new rental in Scotland’s capital now stands at £1,130.
Belfast saw the smallest increase, of 4. 3%, with tenants paying £713 per month.
In London, where the cost of a new hire has surpassed the £2,000 (£2,001) threshold, average hiring inflation stands at 13. 5%.
According to the real estate portal, higher rental prices are expected to be maintained in the second part of the year, as the seasonal recovery of summer and autumn emerges.
However, with little prospect of increased supply of rental homes, the market should show signs of a correction, said Zoopla. It expects rental inflation to slow to around 8% by the end of the year, although the figure is still above wage inflation.
Richard Donnell, chief executive of Zoopla, said: “The cost of hiring is at its highest point in a decade, with emerging symptoms of stress for some tenants, especially those on low incomes. Boosting sources of recruitment is the key policy lever for healthier living and a more sustainable procurement sector.
Data published today by the Bank of England and the Financial Conduct Authority shows that mortgage lending is down by 24% compared to a year ago.
Gross advances in the first quarter of 2023 amounted to £58. 8 billion, up from £76. 9 billion in the first quarter of 2022 and £81. 7 billion in the last quarter. Lending is at its lowest point since the start of the pandemic in 2020.
The price of new mortgages (agreed loans that will be brought forward in the coming months) fell by 16. 1% in the first quarter of this year and 40. 7% less than a year ago, to £48. 9 billion. This is also the lowest point recorded since the second quarter of 2020.
Data shows that loan arrears have increased as rates and the overall cost of living have risen over the past year. Notable loan balances in arrears rose to 9. 5% in the first quarter of 2023 and up to 12. 5% in 12 months, to £14. 9 billion.
Jeremy Leaf, north London estate agent, remains positive: “Recent volatility in the mortgage and property markets makes these figures particularly interesting. Although comparisons with the busy period 12 months ago can be misleading, they still show that buyers are proceeding cautiously, despite improvements in activity on the ground since the beginning of the year.
“As long as credit deals remain on the table and interest rates continue to rise, stability will return as the market will continue to be supported by strong employment numbers and higher-than-expected wages. “news here.
Thanks to a nearly two-year extension of the deadline announced today, taxpayers have until April 5, 2025, to fill in gaps in their National Insurance tax returns from 2006 to 2016, potentially expanding their state pension rights, writes Andrew Michael.
The period 2006 and 2016 was a transitional period coinciding with the move from a previous state pension arrangement to the present one. The government originally imposed a deadline of 31 July 2023 for those looking to top-up their contributions for these years.
NCIs are a way of taxing the source of income and profits of the self-employed. Paying is a legal responsibility and those who pay are also entitled to secure social security benefits.
However, not everyone can have a full package of NI payments, due to a disruption to their career, which can reduce the amount of benefits they are entitled to.
This includes the amount earned in state pensions after 2016, which currently stands at £203. 85 per week.
To compensate for this, the government allows other people to fill in the gaps in their NI history by recovering lost contributions. Making voluntary contributions can offer Americans a much greater retirement situation than not doing so.
Rates vary for different classes of NIC, payable according to employment/self-employment status. They currently stand at £3.15 per week for Class 2 NICs and £15.85 a week for Class 3.
Britons typically need at least 10 years of NICs to qualify for any kind of retirement payment at all and at least 35 years to receive the maximum state pension amount.
The government said the move means “people have more time to decide whether paying voluntary contributions is right for them and ensures that no one will have to miss the opportunity to increase their state pension entitlements. “
But the government added that the payment of voluntary contributions does not increase state pension entitlements: “Before starting the process, eligible individuals with gaps in their NI registration from April 2006 onwards deserve to check whether they will gain benefits from filling those gaps. “
Alice Hayne, private finance analyst at Bestinvest, said: “The good news is that Britons with holes in their national insurance record no longer want to panic at the thought of running out of time to close a hole and get the full retirement source. of income to which they are entitled. Buying back lost years is a wonderful way to increase your source of retirement income, and this window of opportunity to roll back contributions to 2006 is something you shouldn’t ignore.
“Extending the deadline will not only give the government time to catch up on the volume of applications, but it will also let more taxpayers know if they would gain advantages from making up the missing years. The extra time will also give those who will gain advantages from making up a shortfall the opportunity to build up a budget to cover the cost, which can run into the thousands, depending on how many years are missing from their record.
Individuals can check their records by obtaining a state pension forecast. For individual IRB records, use the government’s private tax accounts website.
Household budgets continue to face intense pressures, according to industry figures showing mortgages and private savings declined in the first three months of 2023, while housing arrears and foreclosures increased, writes Jo Thornhill.
UK Finance’s Household Finance Review for the first quarter of the year found mortgage lending to first-time buyers and home movers fell to its lowest level since the early months of the Covid 19 pandemic in 2020.
Excluding the lockdown months when the property market was fairly closed, the number of first-time buyers is at its lowest point since 2015.
As we reported earlier this week, the number of first-time buyers opting for a mortgage over 35 years or more (increasing the term of the loan can make it more affordable) is also at a record high, at 19%.
For the first time in 15 years, the savings held by households has contracted year on year with the total value of money on deposit in instant access accounts falling by 4% to £867 billion, compared to £905 billion at the same time last year.
Among families who have not yet saved money, there has been a resurgence of longer-term savings products, such as fixed-rate bonds and real accounts. These accounts, which have been unpopular for the past decade due to low interest rates, now appear to be expanding. popularity thanks to more competitive terms.
The number of borrowers suffering from the accumulation of their loan bills increased in the first few months of the year after an increase in the fourth quarter of 2022. There were 2,530 new backlog cases in the first 3 months of 2023, up from 1,050 in the last quarter in 2022. This brings the total order book to 83,760.
Foreclosure numbers have also risen, albeit from a low level, according to UK Finance. Possession figures had noted an expected decline in the last quarter of 2022 as the industry suspended its testing activities during the holiday season. But the numbers resumed a slow rise in the first few months of this year.
In the first three months of 2023, 1,250 loan holdings were recorded, up from 860 in the last quarter, up 28% from the 960 possessions seen in the first quarter of 2022.
Eric Lefinishers, UK Finance, said: “We expect short-term loan market activity to remain fragile. Borrowers nearing the end of their fixed-rate transaction are encouraged to seek a recommendation from a global broker.
Consumer spending (on debit and credit cards), which typically declines in the first few months of the year as families tighten their belts after the holiday season, was predictably subdued in the first quarter of the year. But this was partly offset by higher-than-expected spending on holidays and abroad.
Overall credit card debt is increasing about 10% year-over-year.
Sarah Coles, private finance expert at Hargreaves Lansdown, said: “Our enthusiasm for travel has held up strangely well. It turns out that having to stay at home during the pandemic has replaced the way other people understand their vacations, more and more others see them as a must-have detail that they can’t live without, even if it’s hard to afford.
“For some consumers, they are covering the extra costs with savings, perhaps build up during the pandemic.”
Sales of new cars to personal buyers fell in May, and fleet sales helped the industry achieve a 10th consecutive month of growth.
Official figures from the Society of Automobile Manufacturers and Traders (SMMT) showed that the 65,932 personal registrations recorded in May represented a 0. 5% drop from the same period last year.
At the same time, the figure of 76,207 new fleet registrations in the month exceeds 20,000 up to May 2022.
For the month as a whole, there were 145,204 registrations, about 20,000 more, or 16. 7%, from the same period in 2022.
Although enrollment increased year over year and reflected a 10th month of growth, it is lower than 2021 figures. In fact, in May 2020, hit by the pandemic, enrollment was at its lowest point since 2011.
The electric vehicle market continues to grow, with battery electric vehicle (BEV) registrations increasing approximately 60% year-on-year to account for 16. 9% of all registrations in May.
Ford’s Puma once again topped the best-sellers table in May, retaining its spot as the most registered vehicle for the year so far.
Mike Hawes, chief executive of SMMT, said: “After the complicated Covid-related origin issues of the past few years, it’s smart to see the new car market maintaining its upward trend. “
The figures also show a continued decline in diesel vehicle sales, with a nearly quarter-on-quarter year-on-year drop to 5,758.
Hugo Griffiths, automotive expert at carwow, said: “With diesel cars now accounting for only a small share of the market, with only a 4% share, and electric cars accounting for 17% of sales, buyers from all walks of life are almost unanimous that new cars should be powered by petrol engines. batteries and electric motors, or a hybrid of both.
Manufacturer Mercedes Benz last week joined calls to delay the ‘cliff edge’ for new rules that will, from January 2024, impose 10% tariffs on electric vehicle sales into and out of Europe if more than 40% of battery components come from outside either territory.
At the opening of a cell manufacturing plant in northern France, Mercedes chief executive Ola Källenius called for the introduction of the tariffs to be pushed back to 2027.
Customers are failing to get the financial products they need when shopping online, according to a report that says up to 13 million ‘vulnerable’ people were affected in the past year, writes Candiece Cyrus.
The market regulator, the Financial Conduct Authority (FCA), defines a vulnerable consumer as a user who, “by reason of their private circumstances, is more likely to be harmed, i. e. when a company fails to act appropriately. ” due diligence point. “
Newton’s Vulnerability Void affected approximately 3,000 consumers, of whom at least 50 were vulnerable due to their physical, intellectual or neurodegenerative conditions. These included learning disabilities, autism, visual impairments, and Parkinson’s disease.
The vulnerable pattern also included consumers who are struggling financially or are suffering financially, as well as those who have experienced vulnerable moments such as illness or bereavement.
The report estimates that a further 30 million people in the UK have bought monetary products online over the past year and more than 24 million are in the “vulnerable” category. Of this group, about thirteen million people either didn’t get what they needed or didn’t get at all. I’m not sure if they gave it to him.
Research suggests that online application processes for monetary products do not account for cognitive fatigue, possibly “sound the alarm to raise awareness” of the risks, and use industry jargon.
This leaves vulnerable consumers at risk of falling into debt, being underinsured, and employing products such as short-term payday loans and prepaid debit cards. These products may have high fees, while the former have higher interest rates, making it less difficult to take over the debt in the event of default.
Vulnerable consumers who implemented products such as checking accounts, savings accounts, and insurance were more likely to get what they needed than those who were new to making an investment or obtaining credit.
More than 60% of consumers vulnerable to investing didn’t get the product they needed, while 72% of those who were approved for an overdraft, 60% of those who took out a loan, and 45% of those who took out credit. credit card, also didn’t get the product they needed.
Meanwhile, nearly 48% of vulnerable consumers who re-borrow feel like they got the product they needed. This figure rises to 67% for vulnerable consumers who have taken out a new loan.
Vulnerable customers who did not get what they needed used alternative channels (such as calling the provider or going into a branch), tried another provider or ‘gave up’ trying to get a product.
The FCA will introduce new regulations on obligations to clients from July 31, which state that money service providers will have to avoid causing “foreseeable harm” and “generate smart outcomes” for their customers, i. e. those who are vulnerable.
According to a new study, more major payment card points are stolen on the dark web in Britain than in any other European country, and they are advertised for just £4. 61 on average.
VPN provider NordVPN claims that the UK is in third place after the US. The U. S. and India have been found to have found a significant number of stolen payment data in the U. S. and India in terms of stolen payment data, after analyzing six million stolen top points sold illegally on dark internet marketplaces.
VPN providers showed that the UK had a total of 164,143 payment card data indexed online, almost as many as the two biggest European victims, Italy and France combined.
52% of the data stolen in the UK was from credit cards and 37% from debit cards. The rest of the data came from other payment cards.
Almost two-thirds (63%) of the knowledge stolen in the UK was also related to other non-public information, including addresses, phone numbers, email addresses and Social Security numbers.
NordVPN cybersecurity expert Adrianus Warmenhoven said: “The card numbers found are just the tip of the iceberg when it comes to payment fraud. This is a crime with a huge ripple effect and the extra information being sold makes it far more dangerous, as a skilled criminal can use these to acquire more personal details.”
Selling for an average of £4.61 per record, the asking price for Brits’ data was 18% cheaper than the global average (£5.61) and half the cost of Denmark data – the most expensive data for sale – at £9.23.
Despite having an above-average amount of stolen data, victims in the UK are less at risk than those in other countries, according to NordVPN.
Its Card Fraud Risk Index measures how likely payment information is to be sold with additional identifying data. The UK ranked 22nd place on the index, far behind the highest risk countries: Malta, New Zealand and Australia.
The VPN provider advises cardholders to protect themselves online by using strong passwords comprised of a mix of upper and lower case letters, numbers and symbols, taking advantage of two factor authentication and keeping an eye out for suspicious transactions on bank and credit card statements.
If you spot something that you can’t identify, you should urgently contact your card issuer to investigate this activity.
The majority of the data examined by NordVPN was not stolen using brute force techniques – that is, via computer programs that attempt transactions guessing the thousands or even millions of possible combinations of a card number until they successfully guess the correct combination.
Instead, knowledge was gathered through other means, such as phishing, in which web users are tricked into following links to fraudulent websites and sharing payment information, or employing malware, in which malware that logs their online activity is accidentally downloaded into the user’s account. device.
To protect yourself from this type of scam, you only make purchases from trustworthy internet sites and conscientiously check all the links that led you there, as well as the URL displayed in the address bar to make sure you’re not visiting a similar site or “scam site. “
Similarly, you never download attachments to an email you weren’t expecting or from a sender you don’t know. The same goes for websites, which you want to check to make them authentic and trustworthy before downloading anything.
Food prices are continuing to rise at near-record levels, despite the fall in overall consumer price inflation announced today by the Office for National Statistics, writes Jo Thornhill.
As noted in our article, the headline inflation rate in the year to April fell from 10. 1% in the last month to 8. 7%. But the accumulation rate of food costs (19. 1%) is only below the 45-year high of 19. 2. % reached in March.
Commenting on the figures, Chancellor Jeremy Hunt said food costs remain “at a worrying level”.
While the smaller increase in wholesale energy costs is contributing to the higher inflation rate, food costs have continued to rise. Commodity inflation, including bread, milk, eggs, and new fruits and vegetables, remains stubbornly high.
A basket of 10 household food items, including eggs, milk, cheese, bread, bananas, pasta and tinned fish, now costs an average of £25.60 – £5.76 more than a year ago, according to the Office for National Statistics interactive inflation tool. This represents an annual inflation rate of 29%.
Among the largest annual increases in food prices (all higher than the current inflation figure of 19. 1%) are:
The ONS Shopping Price Comparison Tool, below, shows how much costs of individual products have risen in the past year.
It’s just food costs that remain incredibly high. While the cost accumulation rate for many non-food items is lower than the overall CPI rate of 8. 7%, many are much higher, adding family cleaning products and children’s clothing.
Among the largest annual increases in the value of non-food products are over-the-counter medications, such as flu and bloodless powder packets (23%), dishwashing fluid (18%), bleach (22%) and paper towels (33%). as well as children’s clothing, adding shoes (21%) and girls’ coats (15%).
Up to 3 million people on low incomes or welfare get advantages. They may benefit from an extension of the government’s Help to Save program, as shown today, writes Jo Thornhill.
The task was to be completed in September of this year. But the Ministry of Finance and Customs has indicated that this formula will continue until April 2025. A consultation, announced in the March budget, looks at tactics for reform and the formula.
Help to Save is open to those who receive benefits that add the Earned Tax Credit, Child Tax Credit, and Universal Credit. Savers can deposit funds at any time from as little as £1 to a maximum of £50 per month.
The savings plans last for 4 years, and savers receive a 50% government bonus, with bills made on the spot and in the fourth year. An investor who makes the maximum deposit per month would save £2,400 over 4 years. This would get the maximum bonus of £1,200.
Deposits can be made by debit card, standing order or bank transfer and there is no limit on withdrawals, although withdrawing funds could affect the overall bonus payment.
Approximately 360,000 savers have opened an account since the scheme was introduced in 2018, but HMRC says a further 3 million people could benefit from the extension if they choose to participate.
People can open a Help Save account if they receive:
Even if a saver’s circumstances change after they open the account and they are no longer receiving one of the qualifying benefits, they can continue to save in the account and receive the bonus. Find out more and apply at the government’s site.
According to a new study, one million families abandoned broadband access last year because they couldn’t do so.
Citizens Advice found people claiming Universal Credit (UC) were worst hit by rising bills, and were six times more likely to give up their broadband access than non-claimants. The charity also found UC recipients were four times more likely to be behind on their broadband bills.
The annual accumulation of inflation-related value has caused some telecom providers to increase their existing customers’ expenses by up to 14. 4%, adding 3% or 4% to the existing Consumer Price Index (CPI) or Retail Price Index (RPI). rate. every April.
Dame Clare Moriarty at Citizens Advice said: “People are being priced out of internet access at a worrying rate. Social tariffs should be the industry’s safety net, but firms’ current approach to providing and promoting them clearly isn’t working. The people losing out as a result are the most likely to disconnect.
“The Web has an integral component to our lives: it’s essential for managing our bills, accessing benefits, and keeping in touch with the people we enjoy. As suppliers continue to procrastinate in making social price lists a success, it’s clear that Ofcom wants to set businesses on fire.
Last month, telecoms regulator Ofcom said 95% of the UK’s 4. 3 million eligible families are not covered by a social tariff. To see the list of recently available broadband social tariffs, click here.
In January, the watchdog also raised considerations about the sector’s affordability. The Ofcom Communications Affordability Tracker showed that 3 in 10 families – or around 8 million – said they were struggling to pay their phone, broadband, pay-TV or streaming bills.
Around 5. 6 million British adults say they have missed at least three of their last six monthly bill or credit payments, writes Bethany Garner.
This is an increase of 1. 4 million since May 2022, according to data from the Financial Conduct Authority (FCA), the UK’s monetary watchdog.
As living prices continue to rise, the FCA also found that 10. 9 million adults are struggling to keep up with expense and credit payments, up from 7. 8 million 12 months earlier.
Financial pressures are having a knock-on effect on intellectual health, with almost a portion of UK adults (28. 4 million) reporting feeling more worried in January 2023 than six months earlier, due to the emerging burden of living life.
With millions of people forced to skip their monthly bills, the FCA urges people to pay their expenses or credit bills to contact their provider as soon as possible.
The watchdog also goes after lenders who fail to offer their consumers adequate assistance. The FCA recently asked 32 lenders to change the way they treat their consumers and awarded £29 million in repayments to 80,000 borrowers.
Laura Suter, Director of Personal Finance at AJ Bell, said: “While lenders are being asked to be lenient with customers, the country is facing a ticking time bomb of defaults, whether it’s mortgages, debts or council taxes.
“Anyone who is struggling with refunds needs to face the challenge head-on. They contact their lender to at least be informed about their features and compare which one might be more productive for them. If they need independent advice, they can turn to a charity such as Citizens Advice.
As the life crisis drags on, nearly a third of UK adults have dipped into their savings to make ends meet, taking together more than £53 billion, writes Bethany Garner.
In the year to April 2023, 29% of UK adults say they used their savings to cover their living expenses, according to a study commissioned by life insurance broker LifeSearch (conducted through the Centre for Economic and Business Research (Cebr)).
The study, which surveyed 3,006 U. K. adults, found that 52% of them are worse off economically today than they were a year ago.
They found that in the coming months, respondents expect their situation to worsen to an average of £232 per month.
This tension is largely due to the growing load of basic necessities, such as fuel and groceries. According to the Autorité de los angeles concurrence et des marchés (CMA), these increases are not solely due to external factors.
Retail profit margins for gasoline and diesel, for example, have been higher over the past four years. According to the CMA’s analysis, the market’s average petrol costs are five pence per litre more than they would have been if average margins had held up in 2019. Levels.
Sarah Cardell, chief executive of the CMA, said: “Although much of the pressure on pump prices is down to global factors including Russia’s invasion of Ukraine, we have found evidence that suggests weakening retail competition is contributing to higher prices for drivers at the pumps.”
While most adults are worse off financially than they were last year, 15% of respondents said they felt better and 33% said they felt about the same.
Adults 55 and older were the likely to report the worst monetary situation, with 57% feeling worse than they did 12 months ago.
Younger adults are optimistic: Only 41% of 18- to 34-year-olds say they feel worse than they did last year at this time, and 23% say they feel better.
This is despite the fact that this old organization predicts that their scenario will be a decrease of £367 on average per month.
Nina Skero, CEO of Cebr, said: “The latest edition of the Health, Wealth and Happiness Index shows that 2022/23 has been a challenging time for households. We expect pressures to persist over the next year, in terms of inflation. and purchasing power.
“Nevertheless, the outlook is somewhat rosier than was the case at the turn of the year, with consumers showing considerable resilience in the face of troublesome economic conditions.”
Dipping into savings is the only step Americans take to make ends meet.
More than a portion of respondents (55%) told LifeSearch they were using their heating less to save money, while another 25% had reduced their use of appliances and 11% had delayed a major purchase, such as a car.
Adults over the age of 55 were more likely to use heating than other age groups, with 62% reporting doing so in the past 12 months.
Elsewhere, 11 percent of adults checked their home and auto insurance policies to find a cheaper deal, and 25 percent sold items they no longer sought or needed.
A significant proportion of respondents (17%) admitted to cooking less hot food and 3% said they had turned to a food bank in the past 12 months.
Around one in three adults (30%) expect this money pressure to have a negative effect on their intellectual health.
However, for some, cutting back on day-to-day expenses isn’t enough.
Just under one in 10 adults (8 percent) say they’ve borrowed from friends or family in the past year, while another 11 percent have taken out new unsecured credit.
Women were slightly more likely to have borrowed from friends and family, with 10% of women having taken this step versus 7% of men.
Another 5% of seniors age 34 and younger reported playing more in an effort to increase their income.
LifeSearch’s Emma Walker said: “Following the record lows we saw in the index at the height of the pandemic, we experienced some optimism last year as we saw some bouts of recovery as the index recovered.
“But this was short-lived, as the cost-of-living crisis brought the index back close to pandemic levels. “
The Federation of Small Business (FSB) is calling on electric corporations to offer small businesses price lists that reflect existing wholesale energy costs, as it says thousands of businesses are stuck in constant deals over costs that have skyrocketed right now. 2022. writes Candiece Cyrus.
He argues that if business spending is not reduced, there will be higher household spending and business bankruptcies.
More than 700,000 small businesses entered into their energy contracts between July 1 and December 31 last year, and 13% of that organization (93,000) now faces the desire to downsize, restructure or close their doors because they can’t keep up. their energy costs, says the FSB.
This follows a cut in government support to businesses last month, as the Energy Bill Relief Scheme was replaced with the Energy Bills Discount Scheme (see 30 March update).
The FSB claims that companies have returned to paying the maximum costs they were charged last year, which may be only 3 or 4 times higher than what they paid when the aid package came into force.
About 42% of all companies that signed contracts at the end of last year say they have been unable to pass prices on to customers, who are already suffering from rising prices.
FSB data shows that a huge proportion of distressed businesses come from the accommodation and food sector (28%), as well as the wholesale and retail industry sector (20%).
It calls on electric utilities to give small businesses the option to extend their constant contracts at a rate between their initial constant rate and the current lowest wholesale rate.
Tina McKenzie of the FSB said: “It is disheartening to see that a significant proportion of small businesses may be forced to close, downsize or radically restructure their operations at the very moment we are looking to grow our economy. Our network has 500,000 small businesses reduced in the two years of COVID; We don’t go any further into this macabre count.
“The least energy providers deserve to do is allow small businesses that signed up for constant price lists last year to ‘mix and match’ their energy contracts, so that their expenses are closer to existing market rates. We would also like the government and Ofgem to take this initiative.
The average price of a used car reached £17,843 in April, according to the Auto Trader Retail Price Index, with an inevitable knock-on effect on insurance premiums, writes Mark Hooson.
The increase in car prices equates to a year-on-year increase of about 3%, but average prices have risen 1. 5% since March.
April marked the 37th consecutive month of year-over-year price increases, but the price of all types of cars is rising.
The average number of electric cars (EVs) used in April this year was 18. 1% lower than in April 2022, at £31,517. Last month also marked the fourth consecutive month in which the average number of electric vehicles fell.
Richard Walker, of Auto Trader, said: “The used car market has had a strong year so far. The falling price of used cars has done little to dampen demand, and based on what we track in the market, there is no indication that it will slow down, especially in the near future.
Since car insurance premiums depend in part on the cost of a vehicle and the cost of portions and repairs, the average value of a used car has a ripple effect.
February data from the Association of British Insurers (ABI) showed that average premiums rose by 8% to £470 in the fourth quarter of 2022.
As part of its research, the ABI said its members – over 90% of the UK insurance industry – blamed higher paint and material costs, up by nearly 16%.
It says 40% of all repaired work is affected by partial delays and that the average value of used cars increased 19% in the year ending July 2022.
ABI Jonathan Fong said: “All motorists need an insurance deal, especially when faced with cost-of-living pressures, and insurers continue to do everything they can to keep the price of car insurance as competitive as possible.
“Yet, like many other sectors, insurers continue to face higher costs, such as more expensive raw materials, which are becoming increasingly challenging to absorb.”
Electric vehicle (EV) adoption continues to rise as the UK nears the “cliff edge” when it comes to price lists for cars sold in Europe.
The latest data from the Society of Motor Manufacturers and Traders (SMMT) represents the ninth consecutive month of growth in the new car market, with EVs now making up roughly one in six (15%) new registrations.
New car sales rose by 11. 6% in April to around 132,000 registrations. This is the most productive April since 2021, but well below pre-pandemic enrollment levels. By comparison, April 2019 quotes were about 17% higher.
Battery electric vehicle (BEV) registrations increased by more than one part (59. 1%) in April, to 20,522 units. Plug-in hybrid cars (PHEVs) increased by up to 33. 3% with 8,595 registrations. Hybrid electric cars (HEVs) increased by 7. 7% to 15,026 registrations.
The SMMT has revised its predictions upward for the quarter, anticipating higher-than-expected registrations as a result of lower pressure on supply chains. This is the first time it has done so since 2021.
At the same time, an upcoming update in the UK industry as it relates to Europe could impact electric vehicle registrations unless a new deal is reached.
As it stands under the UK-EU Trade and Cooperation Agreement (TCA), the UK can sell EVs into Europe without having to pay tariffs as long as no more than 70% of an electric battery’s components come from outside the UK. From the beginning of 2024, however, the threshold will drop to 40%.
At this stage, any vehicle with more than 40% imported parts in the battery will be subject to a 10% tax when sold in Europe. This can deter brands from establishing or staying in the UK.
Although the replacement is expected to take place in eight months, the order in time for EU sales next year will begin well before then, creating uncertainty for brands about whether the deal can be replaced in the meantime.
In February the Department for Business and Trade said: “We are aware that some members of UK and EU industry are concerned about the 2024 rules and we continue to work closely with industry to understand and mitigate the impact of external factors, such as the Covid-19 pandemic and the global semiconductor chip shortage on the production of electric vehicles and batteries.”
Carwow spokesman Hugo Griffiths said: “Of course, there are similar issues with sourcing electric vehicle battery components, and the EU and UK have battery production capabilities from other countries, and this factor must be addressed.
“But insisting that from next year only 40%, rather than 70%, of an EV’s battery components can come from outside the UK or EU before additional trade tariffs kick in is a purely synthetic, legislative problem: it has been concocted by policymakers, so it must be solved by them on behalf of the populations they represent.”
Consumers borrowed £1. 6 billion in March, up from £1. 3 billion 12 months ago, according to new insights from the Bank of England, writes Jo Thornhill.
The figure is also up from the £1. 5 billion reported in February, making it the sixth consecutive monthly increase.
Loans in March were split between £700 million in car loans and £900 million in other customer credit arrangements, such as car broker financing and private loans.
The credit card borrowing rate increased, generating issuances of 0. 18 percent to its all-time high of 20. 29 percent.
According to the report, interest rates on bank overdrafts fell by 0. 27 percent to 21. 07 percent. The interest rate for new loans fell 0. 36 percent to 7. 79 percent.
Mortgage approvals for house purchase rose significantly in March, according to the Bank data, reaching 52,000, up from 44,100 in February. However, the figures remain subdued compared to the levels seen in March 2022, when mortgage approvals were recorded at 70,700.
Jeremy Leaf, North London estate agent and former chairman of RICS Residential, said: “We see loan approvals as a very useful indicator of the long-term direction of the asset market.
“Lending is stagnant, reflecting the quiet era between the mini-budget and the end of last year, while approval figures show that stabilizing lending rates and inflation are leading to an increase in activity. “
The Bank says households withdrew £4. 8 billion from banks and building societies in March. Net deposits in easily accessible interest-bearing accounts fell significantly, but £6. 5 billion was paid into live accounts.
In addition, during March, households deposited £3.5 billion into National Savings and Investment (NS&I) accounts. This is the highest net flow into NS&I since September 2022, when the figure was £5 billion.
The government announced today that all bloodless phone calls that provide monetary products will be banned to prevent scams to consumers, writes Bethany Garner.
While bloodless pension-related calls have been banned since 2019, the new regulations will apply to all monetary products, including investments, insurance, and cryptocurrencies.
According to government estimates, fraud accounts for 40% of crime in the UK and costs Americans around £7 billion a year.
Once the new regulations go into effect, consumers will automatically assume that any unsolicited calls about monetary products are a scam.
The new rules will also ban ‘Sim farms’ – where fraudsters send scam text messages to thousands of people at once – and prevent scammers from impersonating the phone numbers of legitimate banks and other businesses.
At the same time, a new National Fraud Team will be set up, led by the National Crime Agency and the City of London Police. The 500-member team will collaborate with foreign intelligence networks to identify and thwart scams, the government said.
£30 million in investment will also be committed to a new fraud reporting centre, which will be operational “within a year” and will work with tech corporations to be able to report online fraud.
Tom Selby, Head of Pension Policy at AJ Bell, said: “Financial scams are a nightmare for society and ruin lives, so any move to steer more consumers away from other types of fraud is hugely welcome. “
“For this bloodless call suppression to work, we want two things: strictly worded legislation, ensuring that destructive contacts are the special target, and a valid law enforcement risk in the event of non-compliance with the new rules.
“These plans will also have to go hand-in-hand with increased accountability for web giants like Google in fraudulent paid ads, which the Online Safety Bill could incorporate into UK law. “
While those projects are widely welcomed, the government has been criticized for acting sooner.
Rocío Concha, from customer organisation Which?, said: “The fight against fraud has progressed too slowly in recent years and, in particular, additional measures are needed for big tech platforms to take serious anti-fraud action. “
Selthrough also warns consumers to remain vigilant: “It is vital, regardless of what the government does, that Britons remain calm and cautious when contacted through someone they don’t know about their finances. “
High costs at the point of sale appear to have peaked, but food is still becoming more expensive, according to figures published through the British Retail Consortium (BRC), writes Laura Howard.
Annual retail price inflation slowed to 8. 8% in April from 8. 9% in March. But prices for store-bought food continued to rise in April, with annual inflation for this category amounted to 15. 7%, up from 15% in March.
The price of room temperature food, which can be stored at room temperature, continued to rise in the 12 months through April to 17. 8% and 12. 9%, respectively (17% and 12. 5% in March).
The BRC said price pressures along the source chain, more expensive foods due to higher packaging prices and the higher value of coffee beans were the main factors driving the increase in the value of the food.
Experts say the overall stagnation in costs in stores is due to “spring discounts” in the clothing, footwear and furniture sectors.
Non-food inflation fell to 5.5% in April, down from 5.9% in March. While the figure remains elevated, it is below the three-month average rate of 5.6%, said the BRC. Inflation for other food categories is above the three-month average.
Helen Dickinson, chief executive of the BRC, said: “We should start to see food prices come down in the coming months as the cuts to wholesale prices and other cost pressures filter through.”
The official UK inflation figure, as measured via the Office for National Statistics’ Consumer Price Index (CPI), rose from 10. 4% to 10. 1% in the year to March 2023 but is still more than times above the Bank of England’s 2% target. %.
Ford has the first automaker to offer hands-free driving in Europe with the arrival of the “BlueCruise” generation in its 2023 Ford Mustang Mach-E electric cars (EVs), writes Candiece Cyrus.
With the vast majority of road injuries considered to be the result of human error, the advent of increasingly complex self-driving cars is expected to protect the statistics, which could lead to an overall relief in auto insurance premiums.
Drivers of the Ford Mustang Mach-E model, which starts at £50,830, can use what the automaker calls “hands-off, hands-off” technology. It has been approved by the government to run on 3,700 kilometres of motorways in England. Scotland and Wales, designated as ‘blue zones’.
The first 90 days’ use of BlueCruise is included with the purchase of the vehicle. After this, drivers can subscribe to use it for £17.99 a month.
The “Level 2 Advanced Hands-Free Driver Assistance System” is based on Level 1 cruise technology, which will be popular in a growing number of cars, and adjusts the vehicle’s throttle to a specific speed, allowing the driver to lift their foot. the pedal.
There are a total of six degrees of driving range. Level 0 offers no automation, while Level 3, which goes beyond this Ford initiative, offers conditional automation, which includes features such as motive power in traffic jams.
Level four, highly automated, includes cars without a steering wheel or pedals installed, such as a driverless taxi, while level five, fully automated, offers the same capability as level four, but in all conditions. Models four and five do not require any forma. de manual driving.
BlueCruise uses cameras and radars to monitor the environment, including traffic, road markings, speed signs and the position and speed of other vehicles, to allow drivers to take their hands off the steering wheel.
An infrared camera facing the driver can also be used to check their attention, following their gaze, even with sunglasses, as well as the position of their head.
If the formula detects a lack of attention on the part of the driver, it will display caution messages. This is followed by audible alerts, applying the brakes, and finally slowing the vehicle while controlling the guidance. Similar movements will occur if the driver does not put their hands on the steering wheel when exiting a blue zone.
Ford has already brought the generation to its Lincoln brand and luxury cars in the U. S. It has been used for 64 million miles (102 million kilometers) over an 18-month period. During this period, no similar incidents or injuries were reported, according to Ford.
The company intends to implement this generation in European countries and in Ford vehicles.
Jesse Norman, Minister for Transport, said: “Newer complex driver assistance systems make driving smoother and easier, but they can also make roads safer by reducing the chance of driver error.
The introduction of hands-free technology in driving is part of the larger goal of ultimately producing fully autonomous vehicles. It is thought that such technology could reduce the number of accidents on the roads and in turn car insurance costs, with the potential to save up to 1,500 lives a year. Currently, nine out of 10 accidents on the road are a result of human error.
However, car insurance is still a necessity, even if you drive a car with automated driving technology. It can cover theft of the vehicle, as well as injuries where the fault lies with the driver or the automatism.
Drivers deserve to be able to get out of the vehicle if necessary. Falling asleep and getting into a car accident, for example, would make them guilty.
If a user is injured or their estate is damaged as a result of a twist of fate with a driverless car, they can sue in the same way against the vehicle’s insurer. The insurer can then take its own actions against the automaker. if you think autonomous generation is to blame. Drivers can locate a map of the blue zones on Ford’s website.
The number of battery electric cars (BEVs) registered in the UK in March hit a monthly record of more than 46,600, up 18. 6% from 39,300 in March last year, according to the Society of Motor Manufacturers and Traders (SMMT). writes Candiece. Cyrus.
However, the overall percentage of BEVs on the market remained almost the same as last year, at just over 16%.
Overall, new car registrations were up 18. 2% year-on-year last month, the point recorded through the SMMT in a “new registration month” since before the pandemic. Year-related registrations are published in March and September.
As supply chain issues eased coming out of the pandemic, March marked the eighth consecutive month of growth in the car market, with almost 288,000 units delivered compared to around 243,400 last year. The first three months of 2023 were the strongest for the market since 2019, with just under 500,000 new cars registered.
Plug-in hybrid vehicle (PHEV) registrations increased by 11. 8%, from just over 16,000 registrations last year to just 18,000 this year. Overall, plug-in vehicle registrations (overall BEV and PHEV registrations) accounted for 22. 4% of the market, a slight reduction from last year.
This follows the closure of the government’s plug-in car grant scheme in June last year.
Hybrid vehicle (HEV) registrations are faring better: they are up 34. 3%, from around 27,700 last year to around 37,200 this year (their biggest year-on-year expansion), allowing electric cars to account for more than 33. 3% of car registrations last month.
Hybrids use battery-powered powertrains powered by internal combustion engines.
So far in 2023, BEVs have accounted for more than 76,000 sales, to more than 64,100 between January and March 2022, an expansion of 18. 8%. PHEVs accounted for more than 31,700 sales and HEVs more than 65,800 sales, an increase of 6. 7% and 36. 9% respectively as of January and March last year.
The Tesla Model Y, a BEV, was the most popular car model in March, with 8,123 units sold, followed by the Nissan Juke (7,532) and the Nissan Qashqai (6,755).
On the occasion of the government’s consultation on a mandate for zero-emission cars last week, the SMMT said: “The market will want to move faster towards battery-electric cars and vans and other zero-emission cars and vans.
“Models are coming to market in greater numbers, but consumers will make the transfer if they are confident they can rate them whenever and wherever they want.
“Success of the mandate, therefore, will be dependent not just on product availability but on infrastructure providers investing in the public charging network across the UK.”
Mike Hawes, SMMT Executive Lead, said: “The new March License Plate Month sets the tone for the year, so this functionality will bring greater confidence to the industry and consumers.
“With 8 consecutive months of growth, the automotive industry is recovering, bucking broader trends and supporting economic growth. The month on record for zero-emission cars reflects increased customer selection and increased availability, but if EV market ambitions (and regulation) remain to be met, infrastructure investment wants to catch up.
Skyrocketing food and drink prices have pushed in-store price inflation to a record high, according to figures from the British Retail Consortium (BRC), writes Jo Thornhill.
Annual food inflation registered 15% in March, up from 14. 5% in February. This is the highest point since the BRC began compiling its data on the purchase price index in 2005.
The index measures the charge of 500 of the maximum items purchased, adding food, beverages, and non-food items, such as clothing and appliances.
Non-food value inflation rose to 5. 7% from 5. 3% over the same period and headline commercial value inflation reached 8. 9%, up from a record high of 8. 4% in February.
The largest price increases were seen in new foods, such as nuts and vegetables, due to shortages and supply issues. Fresh food price inflation rose 0. 7 percentage points in March to 17%.
Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “In-store value inflation has still peaked. In the run-up to Easter, emerging sugar prices, coupled with high production costs, left a bitter taste for some customers, as prices for chocolate, sweet drinks, and soft drinks rose in March.
“Fruit and vegetable costs have also risen as poor harvests in Europe and North Africa have deteriorated availability, and imports have become more expensive due to the weakening of sterling. Some of the biggest deals were made in the non-food sector, with stores offering discounts on home entertainment products and appliances.
“The rise in food costs will most likely ease in the coming months, i. e. as the development season approaches in the UK, although inflation overall will most likely remain elevated. “
This follows the strong inflation recorded by the Office for National Statistics (ONS) last month. Experts expected the rate to start falling. But the Customer Value Index (CPI) rose to 10. 4% in the 12 months of February, up from 10. 1% in the last month.
The ONS said the costs of food and non-alcoholic beverages rose at their fastest pace in forty-five years over this period, with the main contributor to the increase being new vegetables.
Laura Suter, director of personal finance at AJ Bell, said: “Food costs continue to rise, much to the dismay of the British public, who had expected the bill at the checkout to come down until now.
“We’re still seeing the impact of high energy prices and the war in Ukraine coming through into food prices, as well as more specific supply issues, like the shortage of salad items or eggs recently. All of these are pushing up costs, particularly for a lot of staple items. It now looks like we’re going to have a more expensive Easter, as sugar prices have pushed up the cost of Easter treats.”
Ms Suter added that those hit hardest are low income families, who spend more of their overall income on food.
Almost half of households (47%) say they are concerned about paying their mortgage or rent in the coming year, according to new data from financial services provider Legal & General, writes Jo Thornhill.
The results of Britain’s Reconstruction Index survey of 20,000 families also show that 95% of them have experienced a pay cut in real terms over the past year due to peak inflation.
Teams with the lowest source of income (those with an annual household income source of less than £20,000) are the ones who are likely to think their quality of life is deteriorating by 29%, compared to 13% in teams with the highest source of income. families.
More than a portion of respondents said they have cut back on their day-to-day spending in reaction to inflation and emerging prices. And 51% say they expect their spending to drop further in the next 12 months.
Inflation, which stood at 10. 4% last week (up from 10. 1% in January), is widening the gap between the richest and poorest households, according to the L survey
As part of the investigation, L
A Nationwide Building Society news story found that about 4 in 10 consumers (38%) have used credit cards in the past six months to get through payday or receive benefit payments, writes Laura Howard.
The survey of more than 2,000 people nationwide also found that about two-thirds (63 percent) are concerned about the state of their personal finances and their ability to cover expenses. However, this figure is below the 70% announced last month.
Supermarket groceries (29%), eating and drinking out (14%), fuel/electric car charging (13%), utilities (12%) and holidays and travel (11%) were the main spending areas being plugged by credit cards.
Nationwide’s spending report, published alongside research gathering insights into 208 million debit, credit card and direct debit transactions, showed that one essential spend was 12% higher in February than 12 months earlier, at £3. 97bn .
Nationally, it defines expenses as invoices for applications, grocery stores, credit card reimbursements, and child care expenses.
Non-essential spending, such as holidays, dinners and subscriptions, rose 9% year-on-year to a total of £2. 75 billion.
TV subscriptions are the first charge to be eliminated: Nearly a quarter (23%) of people say they have already reduced or canceled their TV subscriptions, and a further 14% are doing so.
Mark Nalder of Nationwide said: “Despite the emerging costs, families obviously need to strike a balance between being financially at fault and being able to spend cash on themselves.
“However, our studies show that while the number of people worried about their finances has decreased slightly, others rely on credit to make up for spending shortfalls. “
Emerging living standards show no signs of slowing down: the latest annual inflation rate for the year ended in February at 10. 4 percent, up from 10. 1 percent in January and above the 9. 9 percent forecast by many analysts.
Yesterday, the Bank of England also raised interest rates from 4% to 4. 25%, which may limit customers’ mortgage and other loan burdens.
Today’s Budget offered a buoyant assessment of the UK economy’s prospects while acknowledging the financial distress being suffered by millions of households in the cost of living crisis.
Chancellor Jeremy Hunt, an MP, said UK inflation would fall from its current point of 10. 1% to 2. 9% by the end of the year. He also said that the UK would fall into a technical recession in 2023.
He said the government had spent £94 billion to provide cost of living support, the equivalent of £3,300 for each household.
He announced sweeping reforms to pensions and extended the provision of subsidised and government-funded childcare for parents looking to enter the workplace or increase their employment hours.
The energy price guarantee, which will rise from £2,500 to £3,000 on April 1, will remain at its current point until the end of June, and the price gap that makes prepaid meters more expensive than credit meters will be eliminated.
This will save average prepaid admission consumers around £45 a year when it arrives later this year.
The UK’s nuclear power will be expanded, with the aim of reaching 25% of electricity generation from nuclear resources by 2050.
There has been no announcement of increases for advertising energy users beyond the Energy Bill Reduction Program, which operates from
Hunt announced a series of corporate tax cuts to praise corporations investing in their operations and revealed proposals for 12 investment zones across the UK. Significant investments will also be made in the synthetic intelligence sector.
Here’s a look at the main points from the Budget.
The Energy Price Guarantee (EPG) will remain at an average of £2,500 until the end of June and is expected to increase to £3,000 on April 1.
Hunt also said the prepayment premium would be abolished, meaning consumers with an upfront payment would be charged on the same terms as those with credit meters. Right now, they pay more because of the higher burden of managing the prepaid infrastructure.
The EPG will remain operational as long as it remains below the maximum value imposed by Ofgem, the market regulator. The cap, which is reviewed quarterly, increased to £4,279 in January and will be set at £3,280 on April 1.
However, the cap is set to fall to £2,013 in July, when suppliers will be required to offer price lists in line with the cap, rather than the EPG.
If wholesale costs continue to fall, we may see a resurgence of the festival among suppliers, with very high price lists used to inspire consumers to transfer corporations, a market phenomenon that hasn’t worked for 18 months.
The EPG will remain in place until the end of March 2024 and will amount to £3,000 on 1 July. It will come back into play if the Ofgem limit exceeds this figure due to emerging wholesale prices.
Industry analyst Cornwall Insight predicts it will achieve £2,002 in the fourth quarter of 2023.
A program that provides 30 hours of free childcare to families with three- and four-year-olds is being expanded to cover those with children over the age of nine months.
The chancellor hopes to breathe life into the economy by expanding the scheme in England by encouraging more parents and carers to work. A similar expansion is expected to follow in Wales, Scotland and Northern Ireland.
The 30 hours’ free childcare scheme was introduced in September 2017, covering registered nurseries, childminders and nannies, registered after-school clubs and play schemes and home care workers from a registered home care agency.
Both parents (or a child’s sole parent) must work at least an average of 16 hours per week on the National Living Wage to qualify for the support, leaving some low-income families (for example, where one parent is in full-time education) ineligible.
To help families who are struggling to access the service offer due to the upfront expense, the government will prepay childcare fees of up to £951 for one child and £1,630 for two.
Critics say the investment may not fully cover providers’ costs, that there are enough child care spaces to meet demand, and that the expansion could simply create safety concerns by forcing providers to reduce the caregiver-to-child ratio.
In his speech, Mr Hunt said providers would be permitted to increase the ratio of carers to children from 1:4 to 1:5.
The expanded free childcare offering will roll out from April 2024, starting with 15 hours of free childcare for two-year-olds, followed by 15 hours for children ages nine months to three years in September 2024.
All under 5’s will be eligible for 30 hours’ free childcare by September 2025.
Universal Credit (UC) claimants will have to work more hours each week in order to avoid having to meet with Department of Work and Pensions (DWP) ‘Work Coaches’.
The Administrative Revenue Threshold (AET), which is the minimum a claimant is expected to earn for paintings in order to continue receiving UC, is being increased.
Previously, the threshold for Americans was set at £617 for Americans and £988 for couples. These thresholds were the equivalent of a single user running 15 hours per week at the National Living Wage (NLW) or 24 hours for a couple.
The new thresholds are 18 hours in NLW for a single person. Claimants who don’t catch up on their hours threaten to reduce their UC bills.
Separately, the chancellor also announced reforms to disability benefits with Universal Support, a voluntary scheme in England and Wales for other people with disabilities to find jobs worth £4,000 per child.
Drivers will be pleased to hear that the 5p-per-litre fuel duty discount, introduced in March 2022, will remain in place for a further 12 months.
The relief will save motorists around £100 a year, the chancellor said.
An additional £200 million will also be available for pothole repair in 2024, most of the existing budget of £500 million.
Kevin Pratt, editor-in-chief of Forbes Advisor UK, said: “Motorists will be relieved that the government is freezing fuel taxes and keeping for some other year the 5p consistent with the fuel litre tax cut, which is due to end next month. But they will also be pleased to see the official popularity of the shocking state of Britain’s roads, with an additional £200 million investment to tackle the scourge of potholes.
“It’s nowhere near enough: it takes billions to fix the country’s potholes enough that they don’t reappear in a few weeks, but it’s more than anything.
“In many areas, driving is like slaloming down the road to avoid the worst accidents, with costly repair costs awaiting those who fall victim to them. There is more to be desired for drivers in difficulty.
Hugo Griffiths at Carwow said: “In the grand scheme of things the Government is clearly lacking ideas in a number of key strategic areas [regarding driving].
“To name but a few: we are still being kept in the dark with regard to how fuel duty will be replaced once electric cars are mandated. There is also little clarity on how EVs will be made affordable for private buyers as we edge ever closer to 2030.
“Most likely, the £200 million anti-chicken fund will still be a band-aid for the country’s road network, which demands comprehensive and basic care.
“At the end of the day, Jeremy Hunt’s budget is a thin mush that will keep motorists going for some time, yet drivers want substance and clarity that is so lacking. “
The chancellor surprised the pension industry by drastically converting the total amount they can contribute to their pensions before they face a hefty tax bill.
Hunt is to abolish the pension ‘Lifetime Allowance’ (LTA), which currently stands at £1,073,100, from April next year. He increases the limit on annual tax-free pension contributions – the “annual allowance” – from £40,000 to £60,000.
The Chancellor also increased the money purchase annual allowance, or MPAA, from £4,000 to £10,000. The MPAA is a special restriction on the amount you can pay into a pension and still receive tax relief.
There is no limit to the retirement savings a person can accumulate, but if the ETA is exceeded, the balance is subject to a rate known as the “lifetime allocation rate. “
Workers who have accrued pension pots in excess of the allowance face an extra 25% levy – on top of income tax – when they take the money above that level as income, or are liable for a 55% tax charge if they withdraw money as a lump sum.
Part of the concept of today’s announcements is to discourage staff — by adding well-paid hospital experts — from reducing their working hours or retiring early to avoid punitive tax degrees related to their retirement plans.
Lily Megson of My Pension Expert, said: “Abolishing the lifetime allowance is eye-catching – but it only affects the most affluent earners. Indeed, in the year leading up to April 2020, only 42,350 breached the allowance.”
Commenting on the annual allowance increase, Standard Life’s Dean Butler said: “Only a small number of employees will make it to the existing £40,000 annual allowance, but the benefits of today’s increase will be of specific help to those to catch up on their savings later in their career.
Commenting on the increase in the annual contribution allowance explained, Mr Butler said: “This is one of the few areas in the pension formula where there has been near-universal agreement on the need for change.
“At a time when the government is hoping to inspire retirees to get back to work, this is arguably the biggest lever it can have pulled from a pensions perspective. Increasing the subsidy to £10,000 will provide some incentive to return.
As for bars and pubs, the chancellor announced that draught beer and cider will continue to pay a lower tax rate than supermarkets.
The draft aid scheme, introduced in 2021, reduced tasks related to draught beer and cider by 5%. As of August, the will increased to 9. 2%.
The measure, dubbed the “Brexit pub guarantee” by the chancellor, will be up to 11 pence less than that applied to beer in supermarkets.
From August, the customs clearance rate on alcohol sold in supermarkets and other outlets will increase to 10. 1%, in line with inflation.
Smokers also face higher taxes. The tobacco tax will increase from this afternoon to 14. 7%, the Chancellor announced.
Following the increase, the price of a packet of 20 cigarettes could rise from around £15.35 to £17.65.
Starting in 2024/25, the self-assessment tax bureaucracy, which will need to be done by the self-employed, high-earners, and those with investment income, among others, will have a separate segment for capital gains earned through crypto traders. .
The Chancellor highlighted the increase in corporate tax from 19% to 25% from April 2023, specifying that only 10% of companies, the largest, will pay the full rate.
As it was shown that the corporate tax super-deduction, which allows companies to reduce their tax bill by up to 25 pence for every pound sterling invested, will end on 31 March, the Chancellor announced a new tax deduction formula – global expenditure (FE).
The FE policy will go into effect from April 1, 2023 and will run for three years until March 31, 2026. Under the new regime, companies can immediately deduct 100 percent of the cost of certain capital expenditures from their pre-tax profits, adding up the expenses. in computer equipment, factory machinery, chimney alarms, automobiles, and office furniture. This equates to a tax saving of 25p for every £1 invested.
The first-year allowance (FYA), which will end on 31 March, has been extended for a further three years, until March 2026, with a view to making it permanent. This deduction allows businesses to deduct 50% of the factory appliance and machinery charge (known as special rate assets) from pre-tax earnings in the year of purchase.
The combined savings for FE and FYA are estimated at £9 billion per year.
But Martin McTague, national president of the Federation of Small Businesses (FSB), was not impressed: “The glaring lack of novelty in key spaces shows that small businesses are being ignored and undervalued. While billions are allocated to giant businesses and homes, 5. 5 million small businesses and the other 16 million people who paint on them will wonder why they have been overlooked.
“The Chancellor is under pressure that the UK is one of the places to do business, but that small businesses want more ambition and focus. It’s action that counts if we’re going to deal with the loss of 500,000 small businesses over the next two years.
The government has announced the creation of 12 investment zones outside London, including in the West Midlands, East Midlands, Greater Manchester, Liverpool, North East, South Yorkshire, Teeside, West Midlands and West Yorkshire, as well as at least one in Scotland and Wales and Northern Ireland’s chancellor said the aim of the zones was to “stimulate business investment”.
The move is supported by an £80 million investment in the site over the next five years. This will take the form of corporate tax exemptions and subsidies.
This follows the creation of 10 free ports, created in 2021 around seaports and airports in the UK, where businesses in those regions already enjoy tax breaks and customs incentives.
The 12 investment zones will be concentrated around universities and think tanks, with the hope that this will boost the generation sector by adding synthetic intelligence. Each region will want to identify a suitable location.
Also announced was £400 million for modernisation projects in 20 regions of England, adding Bassetlaw, Blackburn, Oldham, Redcar and Rochdale, and an additional £8. 8 billion over the next five years to invest in sustainable shipping programmes in the regions.
New mortgages fell by a third at the end of 2022, according to the Bank of England’s latest quarterly statistics, suggesting that emerging interest rates and the ongoing cost-of-living crisis have taken their toll on the housing market, writes Jo Thornhill.
Between October and December, new credit liabilities (loans granted for the coming months) amounted to £58. 4 billion, down 33. 5% from the last quarter when they amounted to £87. 8 billion, and down 24. 5% from a year earlier when they reached £77. 3 billion. billion. million.
Excluding the period around the onset of the Covid-19 pandemic in 2020, this is the lowest point of new borrowing since 2015.
Notable loan balances rose 4. 6% in the last quarter of last year, from £13 billion to £13. 6 billion. This figure was up 1. 3% year-on-year from £13. 5 billion (Q4 2021).
This is the first time there has been a rise since Q1 in 2021 – a reflection of increased financial stress among borrowers.
But arrears represent 0. 81% of total notable loan balances and remain close to the historic low of 0. 78%, recorded in the third quarter of 2022.
Last Friday (March 10), the regulator, the Financial Conduct Authority, released guidelines for lenders on how to treat distressed borrowers kindly.
The notable overall loan debt on loans for residential assets stood at £1. 67 billion at the end of the fourth quarter of 2022, up 3. 9% from the same period in 2021. The gross value of loan advances was £81. 6 billion, £4. 3 billion less than last year’s quarter, but up 16. 3% on the same quarter in 2021.
Charlotte Nixon, lending expert at wealth monitoring firm Quilter, said: “The pre-Christmas 2022 era has been full of uncertainty, and while the country is not out of the woods yet and is still suffering from the rate emerging interest rates and maximum inflation, the direction of travel is at least less unpredictable.
“After the unsettling days that followed the mini-budget [in September last year, when Liz Truss was prime minister and Kwasi Kwarteng was chancellor], lending rates have fallen faster than initially expected and so it is imaginable that this will inspire more people to go to market and more people will seek a loan.
“As lenders take part in a race to encourage borrowers, we are seeing rates stabilise as banks compete for customers.”
The government is giving British citizens three months to fill in the gaps in their National Insurance (NI) contribution records, writes Andrew Michael.
It will extend the deadline from April 5, 2023, to July 31, 2023, for Americans who wish to fill in the missing IRB years between 2006 and 2016. This is an era of transition that coincides with the transition from an old public pension plan to an existing one.
To be eligible, you must have completed or will be entitled to the new state pension from 6 April 2016.
You can check your National Insurance record on the government’s website.
Contributions to NI are a way to tax the self-employed person’s source of income and earnings. Paying is a legal responsibility and whoever does so is also entitled to secure social security benefits.
Not everyone manages to keep up with a full set of NI payments, perhaps because of a career break, potentially reducing the amount in benefits to which they are entitled. This includes the amount received in state pension, currently worth £185.15 a week.
Additionally, the government allows Americans to fill in gaps on their IRB record by recovering lost contributions. Making voluntary contributions can particularly improve the situation for retired Americans rather than not making contributions at all.
After the source of income tax, NICs are the second largest tax in the UK, raising almost £150 billion in the 2021/22 tax year, or around a fifth of all annual UK tax revenue. country.
The decision to extend the deadline comes after many other people reported they were unable to access important government helplines, run through the Department for Work and Pensions and HM Revenue.
Rates vary in other NIC categories, payable based on employment/self-employed status, but currently stand at £3. 15 per week for Class 2 and £15. 85 per week for Class 3.
Victoria Atkins, financial secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted. We recognise how important state pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their NI record to help bolster their entitlement.”
Alice Haine, private finance analyst at Bestinvest, said: “Buying back lost years is a wonderful way to accumulate income for retirement.
“Britons need at least 10 years of NI contributions to get anything and at least 35 years to get the maximum amount, which currently stands at £9,600 a year for those retiring after April 6, 2016 and will rise to £10,600 per year. . year starting this April.
The number of new cars registered in February rose by 26% year-on-year, according to the most recent figures from the Society of Motor Manufacturers and Traders (SMMT), writes Jo Groves.
There were more than 74,000 new listings, marking the seventh consecutive month of expansion as pandemic-related supply chain issues continue to ease. This figure is particularly lower than the 132,000 new cars registered in January, as was the case before the publication of the new license plates on March 1.
Growth was seen across the market, with large fleets leading the charge with a 46% year-on-year increase, compared to a more modest 6% increase in private car registrations.
By category, superminis accounted for a third of all deliveries, and multi-purpose vehicles also gained popularity. In the end, registrations of executive cars and luxury sedans fell by 15% and 6% respectively.
The transition to electric vehicles continued, with the highest growth of 40% posted by hybrid electric vehicles, while battery electric vehicles now account for one in six new cars registered by UK households.
The SMMT expects to install around one million hybrid and all-electric vehicles on UK roads by 2023. However, it warns of potential problems if charging infrastructure fails to keep up with growing demand.
Mike Hawes, chief executive of SMMT, said: “After seven months of growth, it is no surprise that the UK automotive sector is facing the future with growing confidence.
“As we enter ‘New License Plate Month’ in March, with more high-tech cars available, the next budget will have to come with measures that support this [net zero] transition, expanding affordability and ease of collection for all. “
Hugo Griffiths, editor-in-chief of autowow, said: “The spring technique looks to mark an era of renewal and regeneration when it comes to the UK car market, with registrations figures in February only down 6. 5% compared to 2020 earlier. the pandemic.
“Given the turmoil that the UK car industry and the wider economy have faced in recent years, we shout this good luck from the rooftops, while also ensuring that all available appendices are crossed for this recovery to continue. “
The government is consulting on regulation of the controversial buy-now-pay-later (BNPL) credit sector, which is used by an estimated 10 million people in the UK.
The proposed rules would see BNPL firms regulated by the Financial Conduct Authority (FCA), the watchdog that governs banks, insurance companies and other financial services businesses.
Two years ago, the FCA said regulation was needed to protect consumers, while last summer it warned companies to oppose misleading advertising and promotions, especially on social media.
Under the new proposals, BNPL consumers will also be able, for the first time, to lodge a complaint with the Financial Ombudsman Service (FOS).
The government says it needs consumers to get “unrestricted loans” while also making sure those who want it have access to interest-free credit.
Prior to regulation, the FCA will monitor the market and interfere using its existing powers when it identifies consumer harm. The government says that as regulation approaches, BNPL lenders that are ultimately unlicensed have a strong incentive to treat their consumers and prepare their business models. before applying for permission from the FCA.
BNPL systems allow other people to pay for their purchases in interest-free installments for a few weeks, without a credit or affordability check. Penalties may be imposed for late or overdue payments.
Right now, consumers don’t have any recourse to reimburse or fix something if something goes wrong.
Companies make money through revenue-sharing agreements with retailers. Major BNPL players include ClearPay, Zilch, Klarna, and Affirm.
The popularity of BNPL has soared in the cost-of-living crisis, with consumers reportedly using the facility to pay for items such as groceries and utility bills, rather than so-called ‘discretionary’ spending on clothes and non-essentials.
Kicking off its eight-week consultation, the government said: “Given the growing number of people signing such credit agreements and the potential dangers of consumers being exposed to monetary harm, the government is proposing new regulations.
“This will mean that BNPL credit will be regulated through the FCA and consumers will have the new right to lodge a complaint with the Financial Ombudsman.
“Under the new rules, providers will have to provide consumers with key data about their loans and consider actual credit. “
Assuming the consultation endorses the government’s proposals, the law will be enforced and is expected to come into force next year.
Consultation responses should be submitted by 11 April 2023 to [email protected].
Jinesh Vohra, founder of open banking app Sprive, said: “Regulating BNPL lending is a positive step in protecting consumers from potential harm. BNPL corporations are largely unregulated, and without careful tracking of their monetary capacity, I worry that many consumers have taken on more debt than they can handle.
“It’s wonderful to see that with this bill, BNPL corporations will be held accountable for their lending practices and will have to conduct affordability checks so as not to put consumers at risk. “
The government is also believed to have plans to bring the crypto sector into the regulatory framework for the first time. As with BNPL, crypto consumers have no recourse if something goes wrong.
The number of tenants evicted from rental properties surged by 98% at the end of 2022 as the cost of living crisis deepened, according to repossession statistics published by the Ministry of Justice, writes Jo Thornhill.
Government figures, which cover England and Wales, show there were 5,409 property seizures in the three months from October to December 2022, up from 2,729 in the same period in 2021.
By law, landlords will have to follow a three-step procedure to evict a tenant from their rented property. This involves giving the tenant a valid notice, issuing a property order in court, and then filing for an eviction order.
Data from the Department of Justice that in addition to foreclosures, asset owners filed 20,460 repossession programs in the last quarter of 2022 (up 42% from the same period in 2021), there were 16,158 repossession orders (up 135%) and 8,717 warrants (up 103%).
Despite the sharp increase, the Justice Department said foreclosures of rental assets have not returned to pre-pandemic levels. At the recent peak, in 2014 and 2015, there were between 10,000 and 11,000 seizures per quarter.
Polly Neate, chief executive of housing and homelessness charity Shelter, said: “Every eviction realising that landing on someone’s doormat brings worry and uncertainty. No one needs to be forced to leave their homes, yet those court figures show that this is increasingly more personal renters in this country.
“The chronic lack of social housing means that demand for volatile and overpriced personal rentals has skyrocketed, and more and more people are turning against each other in the search for housing. Every day, we hear from desperate families who have not won -Notices of eviction because of the daring people who complained about poor situations or because their landlord tried to take over the emerging rentals.
Mortgage recovery programs increased 23% between October and December 2022, according to the Justice Department, from 2,570 to 3,160. Sheriff’s seizures increased 134%, from 313 to 733.
Claims, injunctions and foreclosures of mortgaged homes have increased over the past year, although they remain below pre-Covid 2019 levels.
The government has proposed a ban on no-fault evictions as part of the Renters Reform Bill that is currently going through Parliament.
The number of new cars registered last month was up about 15% compared to January 2022, according to the most recent figures from the Society of Motor Manufacturers and Traders, writes Mark Hooson.
The 131,994 new registrations mark the sixth consecutive month of market expansion and January of car sales since 2020, before the coronavirus pandemic began.
Year-on-year, data showed petrol vehicle sales up 14.6% to 58,973, diesel sales down 12.1% to 5,280 and Mild Hybrid Electric Vehicles (MHEVs) up 8.3% to 22,362.
The upward trend in electric vehicle registrations continued in January, with hybrid electric cars (HEVs) contributing to the overall growth, accounting for 14. 4% of all new vehicle registrations for the month.
Elsewhere, battery electric vehicle (BEV) registrations rose 19. 8% to 17,294 cars, accounting for 13. 1% of new registrations. However, this figure is lower than the monthly average for 2022.
While the SMMT expects electric cars to account for more than one in four new registrations this year, it says charging infrastructure is failing to keep pace. In the last quarter of 2022, there will be one charging station for every 62 electric cars. compared to one charging station for every 42 vehicles by the end of 2021.
Hugo Griffiths of Carwow said: “Despite battles on many fronts, adding to the supply chain issues, industry difficulties and Covid setbacks, the UK car market is entering 2023 in smart health, with registrations approaching pre-lockdown levels in January.
“The real good fortune is electric cars, whose registrations are up a fifth compared to January 2022, while fleet and business buyers are driving expansion despite a slight decline in the number of Americans buying new cars .
“With electric cars accounting for 13. 1% of all new car registrations, it is clear that drivers and the automotive industry are following the government’s recommendation to adopt the electric model ahead of the ban on the sale of new petrol and diesel cars in just seven years’ time. .
“What we want to see happen now, however, is for policymakers to take public charging infrastructure and incentives for personal chargers seriously, with anecdotal reports and concrete insights that paint a transparent and unappetizing picture: we don’t have enough chargers and we urgently want more. “.
Lisa Watson, of Close Brothers Motor Finance, commented on the new data: “One in 10 Britons will buy an electric car next, with more than one in five switching to hybrid. To meet this demand, it is the duty of car dealers to automobiles for stock information.
Lending to members through the UK’s 388 mutual credit unions hit a record £1. 92 billion in the third quarter of 2022, according to Bank of England figures, writes Candiece Cyrus.
According to the Bank, this is £51 million more than in the last quarter and £255 million more than at the same time in 2021.
The Bank added that total credit union assets exceeded £4.5 billion for the first time last autumn.
Established in 1964, credit unions are local money cooperatives owned and controlled by their members, providing a diversity of additional savings and loans.
The recent increase in the borrowing rate, combined with the withdrawal of short-term credit providers from the market, has left many people with no possible options when it comes to acquiring affordable credit products.
Credit union loans often feature low rates and are designed to provide a financial lifeline for those on lower incomes who are less well served by the mainstream lending sector.
Data from the Bank of England showed that there were 1. 94 million adult credit union members in the third quarter of last year. This is a drop of around 2000 people in the last three months, but an increase from the 1. 9 million members registered the previous year.
In the midst of a cost-of-living crisis, parents are offering more and more money to their adult children, even helping them pay for daily necessities, writes Jo Groves.
The Saltus Wealth Index, released today, shows that 55% of people lend cash to their adult children as a direct result of economic status. And that figure rises to more than 70% for high-net-worth Americans with assets above £. 250. 000.
Education tops the list of expenditure, followed by groceries, household costs and energy bills. At least a quarter of parents are helping with rent and mortgage payments, hobbies and holidays.
This has raised concerns that parents are risking their own monetary security to provide assistance to their adult children. Nearly a quarter of parents are dipping into their retirement or salary, while a significant proportion have used the value of their home or sold other assets.
Mike Stimpson, partner at wealth management firm Saltus, said: “The data shows that many are starting to make adjustments to their long-term money plan to help them: one in five admit to cutting their own contributions to their children’s pensions, achieving more than one in four (27%) of the richest respondents.
“It is hard to know how long this level of support will go on, or if it will become more commonplace as the cost-of-living crisis continues to bite.”
The number of credit card holders struggling to make their required monthly payments looks to be on the rise, writes Laura Howard.
Data from analytics company, FICO, shows a 14.8% increase in the number of people missing two consecutive monthly credit card payments in November 2022 compared to 12 months previously.
The number of credit card holders with 3 consecutive overdue bills increased by 10. 3% over the same period. Each type of late payment has shown an upward trend since May and June respectively.
The depletion of savings built up during the pandemic, higher interest rates and continued high levels of inflation, are all likely factors behind the increased stress on credit card repayments, according to FICO.
However, those who are managing to make monthly payments appear to be continuing to do so, with the number of credit card accounts missing just one payment dropping by 4.2% month-on-month – although still 9% up on last year.
The average balance held on a credit card in November 2022 stood at £1,585 according to FICO, while the average monthly spend was £755 – both figures having increased on a monthly and annual basis.
However, reliance on credit cards for money declined, with ATM withdrawals falling 10. 4% month-over-month and a 32% drop from last month. ‘Last year.
Average funeral prices decreased 2. 5% between 2021 and 2022, but end-of-life overhead increased 3. 8%, writes Bethany Garner.
According to SunLife Insurance Company’s annual Cost of Deaths report, the average number of funerals has declined for the second year in a row.
The report, which accumulated data and information from 100 funeral directors and 1,508 other people who have planned a funeral over the past four years, shows that the average funeral in the UK now costs £3,953.
Mark Screeton, chief executive at SunLife, said: “It’s surprising to see, at a time when everything else is going up in price, that funeral costs have fallen for a second consecutive year.
“The continued decline in funeral prices is possibly due in part to the fact that some trends seen during lockdown remain popular, even after the pandemic. Direct cremations [cremations without funeral service], for example, are a less expensive option and have become mandatory since the COVID-19 crisis. Still, we’ve noticed that their grades have remained relatively unchanged since then.
London remains the region with the highest number of funerals, with an average service costing £5,283, down 1. 4% from the previous year.
Despite expanding by 8. 5% from 2021, average prices are lower in Northern Ireland at £3,317. Prices fell most sharply in Yorkshire and the Humber, falling 13% to £3,742.
While average funeral costs fell in 2022, the “general death charge” increased 3. 8% year-over-year, SunLife reports. Total costs (adding venue rental, catering, fees, funeral notices, flowers, and limousine hire) reached £9,200 in 2022. 2022.
Professional fees – those fees incurred for administering the deceased’s estate – have risen 10.9% since 2021, now costing £2,587 on average. The funeral itself remains the single largest expense, however.
According to SunLife’s research, 41% of funerals are funded, at least in part, by agreements made by the deceased. Of those, 41% are funded through savings and investments, 39% through a prepaid funeral plan and 37% through life insurance policies.
However, in 41% of funerals, those provisions don’t cover all expenses. On average, family members of the deceased will have to find an extra £1,870 to cover expenses.
SunLife says these expenses leave almost a fifth (19%) of families with financial concerns. To cover outstanding funeral costs, 27% of these families report using a credit card, while 14% say they took out a loan, and 33% used money from personal savings or investments.
Screeton said: “Making arrangements for your own funeral can be a huge help to your circle of family members at a difficult time. “
Auto insurance premiums have soared by about a third over the past year, while the cost of home insurance has risen by about a fifth, according to data provider Consumer Intelligence (CI), writes Jo Thornhill.
This is despite rule changes imposed on the insurance industry in 2022 by the financial regulator, the Financial Conduct Authority, that were designed to make insurance pricing fairer for consumers.
CI reports that the cost of car insurance has increased by an average of 30% in the last 12 months and home insurance has been 17% more expensive.
The new regulations stipulate that insurers cannot charge existing consumers a renewal premium higher than the costs quoted for equivalent new consumers. It was widely expected that this resolution would prevent gigantic increases in renewal premiums for millions of drivers.
But market data published by CI shows that the opposite has happened.
In the third quarter of 2022, more than a portion of motorists who renewed their insurance reported that their premiums had increased. Fewer than one in three people have noticed a reduction in the cost of their auto policy.
There is also a trend when it comes to home insurance renewals.
Ian Hughes, CEO of Consumer Intelligence, said that although renewal pricing went down on average at the beginning of 2022, after the implementation of the new rules, inflationary pressures have subsequently caused renewals to rise sharply.
Mr. Hughes said, “Inflationary pressures have seeped into the charges presented to renewing consumers and those on a new policy. This upward tension in premiums is primarily due to claims inflation, which includes the emerging charge of auto parts, materials, and labor, as well as ongoing supply chain issues.
He added: “Insurance has been a reluctant purchase, and as a result, consumers occasionally opt for the cheapest policies available. This is increasingly true as the accusation of living through a crisis deepens.
In a separate study on the impact of the rising cost of living, CI found that 6.6% of consumers cancelled an insurance policy in December 2022 due to rising costs. The most likely forms of cover to be dropped were legal expenses insurance, travel and gadget cover.
The number of new cars sold in 2022 fell to its lowest level in 30 years, despite the growing number of electric vehicle (EV) registrations, writes Mark Hooson.
According to figures published through the Society of Automobile Manufacturers and Traders (SMMT), 1. 61 million new cars were registered last year, the lowest figure since 1992, when 1. 59 million units were registered. This figure is also 2% less than the 2021 total.
Production has been subdued for the past three years due to chain shortages and pandemic-related disruptions, but the last five months of 2022 showed that numbers were starting to rise.
Total battery electric vehicle (BEV) registrations in 2022 were up by more than 40% on the previous year. In December, BEVs accounted for 33% of vehicles registered.
The all-electric Tesla Model Y and Model 3 were the first two vehicles registered in December, with the former being the third most popular of the year, behind the Vauxhall Corsa and Nissan Qashqai.
Diesel cars accounted for the fewest new registrations, with more than 82,000 units. Gasoline registrations were much higher, at around 682,000.
Meanwhile, 292,000 “mild hybrid electric cars” or MHEVs (i. e. , cars equipped with a small electric generator in the starter motor and alternator position, plus a small rechargeable lithium-ion battery).
The SMMT says 2023 will be a better year for the industry as supply chain issues are resolved and semiconductor shortages ease. It expects 1. 8 million registrations this year.
Mike Hawes, director at SMMT, said: “The automotive market remains adrift from its pre-pandemic performance but would arguably support broader economic trends by posting significant expansion in 2023.
“To ensure this expansion, which is a zero-emission expansion, the government wants to help all drivers switch to electric vehicles and force others to temporarily invest more in charging infrastructure across the country.
“Manufacturers’ innovation and commitment have helped EVs become the second most popular car type. However, for a nation aiming for electric mobility leadership, that must be matched with policies and investment that remove consumer uncertainty over switching, not least over where drivers can charge their vehicles.”
Jon Lawes, managing director of Novuna Vehicle Solutions, said: “As we enter 2023, the road to net zero remains bumpy, with EV infrastructure failing to keep pace with adoption.
“Our research shows that to meet the government’s targets, 30,000 new charging stations will need to be built a year over the next seven years, ten times more than the number built over the previous decade.
“Addressing the fragility of the existing charging network, at scale and anticipating needs, is critical to supporting the mass adoption of electric vehicles, which requires urgent collaboration and investment from around the world in the coming year. “
Hugo Griffiths, of the automotive industry site carwow, said: “Given the difficulties faced in recent years by both consumers and the industry, the fact that in 2022 183 new cars were registered every hour – more than 3 per minute – shows that buyers’ appetites and the functions of factories to produce cars are still in much worse shape than some might believe.
“The UK’s recovery of its position as Europe’s second-largest new car market also shows how vital we remain on the continental stage, which is further enhanced by the fact that the Nissan Qashqai – a car partly designed and built entirely here – is the last popular car of 2022. “
The government’s £60 million ‘Get Around for £2’ scheme is now up and running. Operating between 1 January and 31 March, the scheme caps bus fares at £2 for passengers travelling outside London in England, writes Candiece Cyrus.
The government said passengers will save almost a third off the average £2.80 bus fare. Passengers in rural areas can face fares for a single journey as high as £5.
London commuters can now take advantage of Transport for London’s Hopper fare, which allows adults to take unlimited bus journeys in one hour for £1. 65. They will have to insert the same card or device into all buses to automatically trigger the limit.
Over 130 bus operators such as Stagecoach and National Express are taking part in the scheme and its campaign to encourage more commuters to take buses to help the environment.
National Express freezes fares for children at £1.
The government hopes the crusade will take two million cars off the road and reduce carbon emissions, while helping commuters cover the prices of school, paints and medical appointments as the cost-of-living crisis hits the country.
The limit is from the government’s wider Household Support Campaign, which advises families most affected by the cost-of-living crisis on how to save money.
It will also support the use of buses as the industry recovers from a reduction of its services during the pandemic. The government says it will build on its £2 billion investment throughout the pandemic which was used to fund improved services, and new hydrogen and electric buses.
A bus pricing pilot project, launched in Cornwall in April 2022, funded with £23. 5 million in funding, has seen an increase in ridership.
It allows passengers to purchase a ticket priced at £2. 50 per day within cities or a ticket priced at £5 per day to travel around Cornwall and is valid with a number of bus operators.
Hundreds more families are sure to get a £25 cold weather payout as frigid temperatures take hold of the UK and the Met Office warns of persistent snow and ice, writes Candiece Cyrus.
For more data on the zip code districts where eligible families are already due to receive payments, see the Dec. 9 message below.
Here are the latest postcodes where eligible households will receive a £25 payment:
December 16, 2022
December 15, 2022
December 14, 2022
December 13, 2022
December 12, 2022
December 11, 2022
December 10, 2022
December 9, 2022
Eligible families in many postal districts in England and Wales will receive a cold weather payment to cover heating costs after the Met Office and the UK Health Security Agency (UKHSA) issued a weather alert on Monday, writes Candiece Cyrus.
They have warned of temperatures low enough to pose a potential health hazard throughout England, while the Met Office has also issued yellow ice warnings in Wales, north, east and west England.
The frigid temperatures will persist long enough for families in the affected areas to be eligible for a £25 cold weather payment if they meet the eligibility criteria and get certain benefits, including:
Under the program, which runs from Nov. 1 to March 31 this year, the government makes a payment to eligible families whenever their postal district’s average temperature is forecast to be 0°C or below, or has already been recorded as such for seven consecutive years. days.
Recipients do not need to take action as payments should be automatically credited to the bank accounts of those who qualify within 14 days of a trigger.
The cold weather payment scheme stopped working in Scotland earlier this year and has been replaced by an annual winter heating payment of £50.
Eligibility criteria are those for cold weather payments. Payments for this winter will not be made until February 2023.
The postcodes activated for £25 this week are:
December 5
December 6
December 7
December 8
Receiving cold weather bills will not result in payment for benefits a family is already receiving. Anyone who is entitled to a cold weather allowance but does not get it due to a drop in temperatures deserves to be able to receive help from retirement. or the Jobcentre Plus agency.
Data from property platform, Zoopla, shows average UK rental prices rose 12.1% in the year to October, writes Bethany Garner.
This increase puts hiring affordability for single workers at its lowest level in a decade, and the average pay now gobbles up 35% of a typical employee’s income.
Average wages rose just 6% in the same period, stretching affordability for renters amid the cost of living crisis.
Zoopla says the significant increase in rents is a result of demand from superior sources in the personal sector. Demand is 46% above average, while overall sourcing is 38% lower.
Michael Cook, chief executive of Leaders Romans Group, said: “[The government’s] two-pronged strategy of implementing new laws and new taxes is driving much-needed landlords out of the sector and driving up average rents due to a lack of supply. “
He added: “As asset sales slow, the number of people continuing or returning to hire increases, causing an even greater imbalance between supply and demand in the rental market. »
Rental costs have skyrocketed in big cities, according to Zoopla. In London, costs increased by 17% year-on-year, while in Manchester they increased by 15. 6%, 14. 1% in Glasgow and 12. 3% in Birmingham. By contrast, Hull, York and Oxford saw a more modest increase of 8%.
For the 75% of personal renters who don’t move out each year, the outlook is better. Among this group, rents rose at a low rate of 3. 8% in the 12 months through October.
In response to mounting rental costs, more tenants are opting to share a home. According to research from the Resolution Foundation, the average private renter now has 16% less space than they did two years ago, suggesting more renters are pairing up to reduce housing costs.
Others to downsize. Zoopla says it has noticed increased demand for one- and two-bedroom apartments (which now account for 32% of its rental applications) and lower interest in housing.
Richard Donnell, CEO of Zoopla, said: “The chronic lack of sources is leading to an increase in emerging rents that are increasingly unaffordable for renters across the country, namely single-person and low-income families. “
Although rental price inflation shows no signs of slowing down in the short term, Zoopla expects a steady drop to 5% over the course of 2023.
Donnell added: “Increasing investment in new resource-based recruitment offerings is the main way to reduce hiring expansion and create a more sustainable workforce. “
The Financial Conduct Authority (FCA) has asked credit reference agencies to visit its premises to help consumers make better decisions about lending and other bureaucratic borrowing procedures, writes Andrew Michael.
Credit information reports and services, supplied by a handful of agencies, influence consumer decisions across a range of household finance-related issues, from setting up a mobile phone contract to taking out a loan or mortgage.
These files contain information about consumers, from their presence on the Electoral Roll and County Court Judgements against their name, to credit-based products they have used. This information is used to compile a credit score which rises and falls according to an individual’s financial behaviour.
The FCA said the majority of consumers (90%) are aware of the lifestyles of credit reports, but added that it needs to provide more data so that credit decisions better reflect people’s money situation.
“This helps ensure that consumers are not denied credit that they simply can or granted credit that they cannot obtain,” the regulator said.
According to the FCA, lenders say they are “largely satisfied” with the breadth of customer data they have. But he adds that lenders point to “differences in the data they have through other credit reference agencies. “
The FCA has proposed a number of measures, including creating an industry framework to oversee data sharing provisions, as well as making it less difficult for consumers to access their credit reports and challenge any inaccuracies.
Sheldon Mills, FCA’s executive director of Consumers and Competition, said: “It is imperative that the credit data market works well for businesses and consumers. We need to see industry reform to help bring about the changes, but in the meantime, it’s vital that consumers know how to access their credit data and communicate with their lenders if they’re struggling.
The fall of Chancellor Jeremy Hunt extended the freeze on source of income tax thresholds until 2028, meaning more people will pay higher levels of tax as their source of income increases.
He also confirmed that the Energy Price Guarantee will be extended for 12 months from April 2023, but that typical annual bills will rise from the current level of £2,500 to £3,000.
He announced measures for the UK’s energy independence and pledged additional investments in energy efficiency, infrastructure and technological innovation.
Controversially, he said cars would be subject to excise duties on cars from 2025.
The Chancellor also announced that from next April, state pensions and benefits will increase to 10. 1% (September’s inflation rate) in line with the “triple lock” mechanism.
The Office for Budget Responsibility, in its Economic and Fiscal Outlook released to support the autumn, includes a forecast that fuel taxes could rise by as much as 23% in March 2023, estimating that this would increase by 12 pence to the value of a litre of fuel.
This was not mentioned by Mr Hunt in his speech.
INCOME TAX
Income tax thresholds will remain frozen until 2028, two years from the current date. This means that as income increases, more people will have to pay taxes and more will end up paying taxes at 40%.
The relief for income tax from private sources will remain at £12,570, and the tax threshold at the top rate will be set at £50,270.
The threshold at which the additional forty-fivep rate of source tax is paid will be reduced from £150,000 to £125,140 from April next year.
Hunt also announced that the existing annual tax-free allowance of £12,300 will be reduced to £6,000 from the start of the new tax year in April 2023. The amount will be halved again, to £3,000, in April 2024.
The current annual dividend tax allowance, the amount an individual can receive in share dividends each year before paying tax, is to be cut from £2,000 to £1,000 from the new tax year next April. It will then be halved again, to £500, from April 2024.
ENERGY BILLS
The Energy Price Guarantee, introduced by Liz Truss as a replacement for the Ofgem energy price cap, will remain in force at its current level until April 2023, keeping annual bills for typical households to around £2,500.
From April 2023, this figure will increase to £3000 per year, with an extended 12-month warranty.
According to analysts Cornwall Insights, typical bills would reach £3,739 next year if the guarantee were not in place.
The EPG will be reviewed and adjusted downwards if wholesale costs fall during the period in question.
The government will also consult with consumer groups and industry to consider the best approach to consumer protection from April 2024, when the EPG comes to an end, including options such as social tariffs, as part of wider retail market reforms.
The government is also doubling to £200 the amount to be paid to households that use alternative fuels, such as heating oil, liquified petroleum gas, coal or biomass, to heat their homes. This support will be delivered “as soon as possible” this winter.
The energy bill relief program will remain in effect for energy-consuming businesses until the end of March 2023. It is currently being reviewed to determine what will be able to be awarded to companies from April, although Hunt said the scale is most likely to decrease.
PENSIONS AND BENEFITS
The government adheres to the “triple lock,” meaning that pensions and benefits will reach 10. 1% next April, September’s measure of inflation.
The government will take over living bills in 2023/24 for vulnerable families to cope with higher bills: those receiving means-tested benefits will get an extra £900, pensioned families will get an extra £300 of budget, and those receiving disability benefits will get an additional amount. Disability cost of living payment of £150. Details on timing and eligibility will be provided in due course.
FUEL ENTITLEMENT
According to the Office for Budget Responsibility, the government is actually going to raise taxes on fuel next year.
OBR documentation covering today’s events reads: “. . . The planned 23% increase in the fuel tax rate at the end of March 2023, adding £5. 7 billion to next year’s revenue. This would be a record increase in the flow of money. And it’s the first time a government has raised fuel tax rates since Jan. 1, 2011. There are plans to increase the value of petrol and diesel by around 12 pence per litre.
Motoring groups have called on the government to clarify whether this amounts to a policy commitment.
ELECTRIC VEHICLES
From April 2025, electric cars, vans and motorcycles will start paying excise duties on cars in the same way as petrol and diesel cars.
Commenting on the changes, Hugo Griffiths at car website carwow said: “The Government is caught in a bit of a trap when it comes to encouraging electric cars: it wants us to buy EVs to help meet net zero goals and reduce local air pollution, but the more this happens, the less money the Treasury receives from fuel duty and other revenue streams.
“Ending the road tax exemption for electric cars from 2025 will be bad news for EV owners, but this £165 annual charge will generate a number of benefits for the government’s coffers.
“The devil is in the detail, though, and there’s a nasty surprise lurking around the corner for existing EV owners: it’s not just new EVs that will have to pay road tax from 2025: electric cars registered from 1 April 2017 will also be subject to the £165 charge.
“Given that adjustments to road tax regimes tend not to be retrospective, not respecting the formula that was in place when buying older cars is unfair. “
COUNCIL TAX
Hunt announced that from April 2023, local governments in England will increase council taxes by up to 5% per year (3% plus 2% if they have social policy responsibilities) without holding a referendum.
This means the annual bill for a family in a Band D council tax bracket can range between £1,966 and £2,064.
As the cost-of-living crisis continues to hit UK families (and inflation has hit a 41-year high of 11. 1%), about two-thirds (63%) of adults say they feel worse now than they did six months ago. writes Bethany Garner.
And 73% expect their financial situation to worsen within six months, according to LifeSearch’s latest Health, Wealth and Happiness Report.
The study, conducted among 3000 other people between October 6 and 12, 2022, also found that a quarter of respondents (25%) said the cost-of-living crisis is “on their minds every day. “
Dealing with the burden of energy, housing and food expenses was a primary concern. More than one-third of adults (34%) said they expect to be unable to pay their energy expenses this winter, while 22% expect their application payments to decrease. rent or mortgage.
Another 34 percent expect to have difficulty paying for food, or 49 percent of people ages 18 to 34. Nearly a fifth of respondents (19 percent) plan to use food banks this winter.
To cut down on energy costs, 38% of respondents say they’re likely to work from the office more often, while 37% plan to install smart meters at home, and 67% will avoid using major home appliances during peak hours.
As for their grocery bill, 67% of Brits plan to move to a more successful supermarket and 46% intend to sell the pieces they own to earn extra money.
Some respondents also put major life events on hold due to burden issues, with more than a third (36%) of people aged 18-34 delaying the birth of a child due to the burden of life crisis.
Others are putting off buying a home (19 percent) or making primary acquisitions, such as a new car (25 percent). Christmas spending is also expected to be limited, with respondents expecting to spend £76. 20 less on holidays. in 2022 to 2021.
Despite these cuts, nearly a portion of adults (45 percent) expect to use the “majority” of their savings to cover expenses this winter; This figure rises to 62 percent among 18- to 34-year-olds.
A further 12% of respondents say they have taken on debt to make ends meet, while 9% have borrowed money from friends or family.
Nina Skero, chief executive at the Centre for Economics and Business Research, said: “As the UK economy is likely already in a recession, it is very worrying to see the extent to which people are worried that their own personal circumstances will worsen further in the coming period.
“The fact that almost a fraction of Britons (45%) plan to use all their savings to make ends meet over the winter indicates that the burden of living through the crisis may leave economic scars that will last well beyond the current inflationary peak. “
Several anonymous UK lenders will pay millions of pounds in refunds to consumers who have been treated unfairly after finding themselves in monetary difficulties from the Covid-19 pandemic, according to the UK’s monetary regulator, writes Andrew Michael.
In its report, the Financial Conduct Authority (FCA) said it had carried out 69 tests of 65 firms, highlighting shortcomings in resolving distressed borrowers.
As a result, seven organisations agreed to pay £12 million in compensation, which will be spread across 60,000 borrowers.
The FCA said it would also examine an additional 40 companies in the coming months “to ensure they meet their expectations and protect consumers. “
Part of the FCA review included a survey on how lenders applied debt fees and charges and the measures used to deal with struggling customers.
In another component of the exercise, the FCA said only 15 of the 50 firms it analysed “had sufficiently explored specific customer cases, meaning payment arrangements were unaffordable and unsustainable”.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “It’s vital that the sector continues to learn lessons to make sure they support struggling customers.
“We will take steps to limit or prevent businesses from lending to Americans if they fail to meet our needs for consumers with monetary hardship to be treated fairly. “
Laura Suter, Director of Personal Finance at AJ Bell, said: “We’re already seeing more and more people turn to debt to pay for growing expenses and it’s imperative that those who are struggling to pay are presented with solutions, rather than staying with them. “fend for themselves, suffer to pay, and end up in a spiral of debt.
Jeremy Hunt, Chancellor of the Exchequer, has postponed the announcement of the government’s medium-term plan from Monday 31 October to 17 November, writes Andrew Michael.
The occasion will morph into a comprehensive autumn aimed at demonstrating stability and instilling confidence in the UK’s monetary prudence under the leadership of the new Prime Minister, Rishi Sunak.
Hunt said he and Sunak were looking for more time to analyse forecasts for the economy in general and public finances in particular.
Hunt said he was willing to raise possible “politically embarrassing” options and described a “brief two-and-a-half-week delay” in his as the most productive course of action.
Hunt had drawn up a draft plan to be announced next Monday, ahead of an interest-setting meeting of the Bank of England’s financial policy committee on Nov. 3.
But the plan will now take the form of a full fall statement, accompanied by economic forecasts from the independent Office for Budget Responsibility.
In the Prime Minister’s questions today, Sunak said economic decisions would be made to protect the most vulnerable, pointing to his role as chancellor in the Covid crisis of 2020-21, when he was the architect of the leave scheme.
However, he declined to comment on whether benefits would rise in line with inflation through the so-called triple lock. He also did not mention details on what could be offered to families when the existing energy price guarantee ends in April 2023.
Asked about the force strategy, Sunak said the government committed to renewable force and greater use of nuclear force. He gave the impression of ruling out the expansion of government-backed onshore wind power in favor of offshore developments.
He also suggested that he would adhere to the Conservative Party manifesto’s commitment to a moratorium on fracking, introduced in 2019, which bans the use of the controversial drilling technique to release natural gas from shale rock.
As housing, energy and food prices rise, one in four UK adults say they are experiencing monetary hardship or would be struggling as a result of unforeseen spending, writes Bethany Garner.
According to the Financial Conduct Authority’s Financial Lives Survey, which surveyed UK adults between February and June 2022, 7. 8 million Britons find it very onerous to pay their bills.
The study also shows that 12. 9 million people (24%) have poor financial resilience and would face hardship in the event of a financial shock.
Those living in the most deprived areas of the UK are more likely to be struggling. In the North East of England, 12% of respondents reported monetary hardship. In the North West, this figure is 10%, compared to just 6% in the wealthier areas of the South East and South West of England.
A survey by Nationwide building society suggests consumers spent 7% less in September 2022 than they did in August.
The study looked at debit card, credit card and direct debit transactions made through Nationwide consumers between Sept. 1 and Sept. 30. It found a 4% monthly decline in debt service spending, suggesting that some consumers might be falling on their payments.
Nationally, there was also a 13% drop in restaurant spending, a 4% drop in retail spending, and a 3% drop in spending on subscriptions like Netflix from September to August.
As consumers reduced spending in those categories, spending on must-haves rose 9% year-over-year, largely due to fuel and housing costs.
In September 2022, consumers spent 12% more on fuel and EV charging, 11% more on loan bills, and 8% more on rents than in September 2021.
Mark Nalder, payments strategy director at Nationwide, said: “The likelihood is that the downturn in spending is likely to continue as people tighten their belts now to prepare themselves for the Christmas period, either so they have sufficient to spend, something to save or in some cases enough to get by.”
Almost a fraction of UK adults are struggling to pay their energy bills, according to today’s ONS Opinion and Lifestyle Survey, writes Jo Groves.
The proportion of adults finding it difficult to afford their energy bills has continued to rise from 40% (March to June) to 45% in the last three months. A similar picture was revealed for rent and mortgage payments, with 30% of adults struggling to pay their housing costs, compared to 26% in the previous quarter.
Rising interest rates and energy prices are most likely at the top of new Prime Minister Rishi Sunak’s list of priorities as the UK grapples with a cost-of-living crisis. All eyes will also be on the Energy Price Guarantee scheme, which has been shortened to April 2023 under Liz Truss’s government.
The ONS survey also revealed a marked disparity in the impact of higher energy and housing prices across households:
According to the recent ONS Public Opinion and Social Trends Newsletter, 93% of adults reported an increase in their standard of living compared to last year, while almost 80% said their standard of living had increased in the last month.
More than 10% of renters reported lower electricity bills, compared to 3% of homeowners with mortgages and 1% of homeowners who own their homes. About 5% of renters paid rent, compared with 1% of those with mortgages.
The ONS attributed this difference to some home-owners having fixed-rate mortgages, while renters were exposed to rent increases.
Regionally, adults in the North West and London were more likely to show up on their energy bills, while nearly 40% of adults in London said they were struggling to pay their rent or application bills. mortgage.
Adults on the younger and older teams were less likely to be behind on their hiring or loan payments. The ONS highlighted that many young adults are still not to blame for housing costs, while other older people are more likely to own their own home.
Speaking at 10 Downing Street after being appointed British Prime Minister this morning, Rishi Sunak said he would put the UK’s economic stability at the centre of his new government’s agenda, writes Andrew Michael.
Sunak replaced Liz Truss, whose 45-day tenure included a disastrous mini-budget in September that sent markets tumbling and saw the pound fall to a record low against the dollar.
Mr Sunak said Mrs Truss was “not wrong” in her plan to stimulate growth. But he claimed mistakes had been made: “I chose the leader of my component and his prime minister to correct them. “
He added: “Together we can achieve incredible things. We will create a long term worthy of the sacrifices so many have made and fill each day after with hope. “
Mr Sunak’s next step will be to announce the members of his cabinet. Jeremy Hunt, who was promoted to chancellor a week ago through Truss, is expected to retain his post.
Next Monday Hunt is expected to reveal the main points of the government’s medium-term budget plan and related forecasts from the Independent Office for Budget Responsibility.
An immediate vacuum is that of business secretary, following the resignation of Jacob Rees Mogg, a staunch supporter of Boris Johnson.
As money markets digest the political turmoil of the past few days, government bond yields have returned to levels seen before the mini-budget when investors welcomed Sunak’s appointment. The yield on the 30-year note fell to 3. 68% today.
The peak yields on Gilts, which are already notable, are bad news for the government, as they mean it has to offer higher and more competitive interest rates when issuing new Gilts, which increases its cost of borrowing. This is reflected in other interest rates, which is why mortgages have become more expensive in recent weeks.
Long-dated gilts have now all but recovered the losses prompted by the mini-Budget’s seismic package of unfunded tax cuts, which required an intervention from the Bank of England to maintain stability in the UK’s financial framework.
Rishi Sunak has replaced Liz Truss as UK prime minister, less than a day after confirming his goal of running for the job, writes Andrew Michael.
Sunak, MP for Richmond in Yorkshire and former Chancellor of the Exchequer, won the race for 10 Downing Street after his new rival, Penny Mordaunt, dropped out of the race to lead the Conservative Party this afternoon (Monday).
In a televised speech after his victory was confirmed, Sunak said the UK faces “profound economic challenges” that can only be overcome through “stability and unity”. He said his goal was to “build a bigger and richer future in the long run. “for our young people and grandchildren. “
Over the summer, he won the highest percentage of support among his party’s MPs in the last leadership contest that followed Boris Johnson’s resignation, but was frustrated when party members voted for Mrs Truss.
Sunak now succeeds Truss, who resigned just forty-five days after her government’s disastrous mini-budget, which caused turmoil in money markets and saw sterling fall to its lowest point ever compared to the dollar.
Sunak’s appointment seemed to calm the markets, with government bonds (or government bonds) rallying following today’s news. The yield on benchmark 10-year bonds fell just about a quarter of a percentage point on Monday for the industry, to 3. 82%, reflecting a significant increase. in bond prices. The British pound is also trading higher against the dollar, at around $1. 14.
The combined effect has been the generation of expectations of higher interest rates, which could simply ease upward pressure on lending rates.
Edward Park, chief investment officer at Brooks Macdonald, said: “Lower government bond yields will drive down UK government borrowing prices and a new fiscal outlook would possibly allow the Bank of England to be less competitive in its interest rate policy. “
As with his predecessor, Mr Sunak will be confronted by a deepening cost-of-living crisis, fuelled by eye watering levels of inflation caused by soaring energy costs as well as the war in Ukraine.
With two years as chancellor under his belt, an era that coincided with the Covid-19 pandemic, Sunak has already given the City of London and currency watchers an idea of how he leads the country.
He takes the demanding situations posed by inflation seriously and is widely seen as a fiscal conservative. In other words, it is in charge of balancing the nation’s accounts.
This trend differs from that of her predecessor, Liz Truss, whose expansion strategy imploded just weeks after delivering massive, unfunded tax cuts announced in September’s mini-budget.
If Sunak needs to live up to his preference for fiscal prudence, an era of austerity is inevitable, whether through tax increases, government cost cuts, or both.
Over the weekend, Lord Mervyn King, former governor of the Bank of England, warned that the UK is facing an era of austerity “more difficult” than the one that followed the 2008 currency crisis. He added that the average individual can simply afford “considerably higher taxes” to finance government spending.
Sunak will be keen to make good on his past promises of fiscal responsibility. However, he will want to balance this with the right if he wants to regain public trust.
The first primary for Sunak will take place next Monday, when his government unveils its medium-term budget plan and related forecasts from the Office for Budget Responsibility. At the time of writing, Sunak is expected to remain Jeremy Hunt as chancellor.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Gone are the days when Rishi Sunak was willing to open up government coffers to help the UK through a crisis. The pandemic-related spending spree is indeed over, and the former chancellor will take on the most sensible task under the guise of a strict and austere director.
“He will be determined not to see the bond market spiral out of control again, threatening the country’s monetary stability. He will also have to show that he is cooperating with the Bank of England by being ultra-conservative on the fiscal front in order to “control higher inflation. “
Andrew Megson, CEO of My Pension Expert, said: “In the six weeks since Rishi Sunak’s first attempt to become Prime Minister failed, incredible chaos has ensued. Now he has the chance to become himself, in the broadest way imaginable, the fires lit during Truss’s 45-day reign, marked by stock market crashes and embarrassing setbacks.
“Market stability will be a priority. Sunak’s first crusade of leadership was based on the promise of conservative fiscal policies, which have already pleased markets and given a boost to the pound. However, it is also that the new prime minister is focused on swift action. to reassure Britons who are struggling to stay afloat amid a skyrocketing cost-of-living crisis. Confirming his position on key policies such as triple lockdowns or cuts to social benefits would be a step in the right direction. “
Sam North, market analyst at eToro, said: “With Rishi Sunak at the helm, there will be less pressure for the Bank of England to raise interest rates just as aggressively, thanks to minimising yields, which will provide less incentive for investors to sell. “The British pound will also be affected due to reduced uncertainty. But since the news of his appointment is already priced in, investors shouldn’t expect much change after this announcement.
Until recently, being prime minister was the pinnacle of British public life: a golden cup in which the individual tasted the molasses of political immortality. Today, it looks like a poisoned chalice, and a tarnished one at that, writes Kevin Pratt.
As one former minister pointed out, all political careers end in failure. But Liz Truss’s calamitous period in power will secure a place in the history books on how temporary mistakes were made and then compounded, and the extent of the damage done.
To be fair to Liz Truss, she came to the force in the middle of a global economic crisis. But she and her allies managed to temporarily aggravate the situation by clumsily scaring the currency and bond markets and destroying the UK’s economic credibility overnight.
This is not even a political statement. The speed and number of recent U-turns at the Treasury are an admission that mistakes have been made, as is the resolution to sack a particular chancellor selected to put the prime minister’s policies into effect.
So what does all this mean for finances?
In the context of the cost-of-living crisis, 3 problems stand out: interest rates and the cost of mortgages, the Energy Price Guarantee (EPG) and the “triple lock-in” of pensions and benefits.
Interest rates are set by the Bank of England and are not in the gift of the Prime Minister or his or her Chancellor. But a government’s economic policies – such as large-scale unfunded tax giveaways à la Kwasi Kwarteng’s ill-starred mini-Budget on 23 September – make money markets edgy. And when they feel edgy, they demand higher returns to lend money.
The effect of this is being widely felt, particularly through higher loan bills (and, inevitably, rents), as banks and lending corporations pay more for secure long-term financing. News of today’s resignation.
When it comes to energy bills, Ms Truss praised the EPG as a great achievement, and no one can deny that urgent action is needed to protect families from rising costs. But Kwarteng’s successor as chancellor, Jeremy Hunt, withdrew the investment from the guarantee next April, when it would last until October 2024.
What will happen after the end, no one knows yet. The total factor will be re-examined and we can expect action to be taken for those who want it most. It remains to be seen who will be eligible and what assistance they will receive.
The triple lock is designed for the purchasing power of state pensions and benefits by making sure they accumulate through the top of the three measures: September’s annual inflation rate, average income, or 2. 5%. Inflation is by far the highest at 10. 1%. %.
Mrs Truss simply said that the lockdown, however expensive, would be maintained, at least for pensions, adding that the Chancellor agreed. But she’s gone, and who knows who will be the chancellor next week?But of course there is no guarantee that the new owner of 10 Downing Street will have to keep it as a neighbour of 11.
That potentially puts the triple lock back in play as a possible source of reduced expenditure for the next iteration of the Conservative government.
The sum of all this? Deep uncertainty and anxiety for millions of households. Major outgoings such as housing costs are high and getting higher, bills are rocketing, and supermarket shops are becoming more expensive by the week.
No doubt Truss’s successor will take on this role with great optimism and confidence, but the difficult situations will be immediate and massive, and the stakes go beyond her private political legacy.
Jeremy Hunt, the Chancellor of the Exchequer, has announced the creation of a body that will provide the government with independent expert advice on economic matters, writes Andrew Michael.
The chancellor announced the formation of a new four-person economic advisory council in a follow-up speech in the House of Commons, after canceling a large part of last month’s mini-budget the day before.
This included the resolution to scrap “indefinitely” a planned cut in the fundamental rate of source tax from 1 pence to 19 pence next April and also to shorten the Energy Price Guarantee (EPG) and energy bill relief scheme for the UK. families and businesses through the energy crisis (see full story below).
No details were given on what levels of aid will be offered starting in April, when the EPG ends, or how Americans or businesses will be able to benefit from the aid.
Cornwall Insights, the market analyst, has said average annual bills could top £4,300 once the EPG comes to an end in the Spring under Mr Hunt’s direction. Under the EPG, an average-consumption household would pay around £2,500 a year for the next two years, starting this month.
Describing his plans for a new economic advisory body, Mr Hunt told MPs: “I have more independent and qualified recommendations as I begin my journey as chancellor. “
The chancellor said the panel would include Rupert Harrison, a senior adviser to former Conservative chancellor George Osborne, as well as two former members of the Bank of England’s financial policy committee, Gertjan Vlieghe and Sushil Wadwhani. Karen Ward, chief market strategist for EMEA at JP Morgan Asset Management, completes the line-up.
Explaining his steps to provide a currency and his decision to tackle the country this morning, rather than waiting until October 31 – already three weeks ahead – Hunt said it was vital that the government “does more”. , more temporarily to provide certainty to markets.
He added: “I need to be frank about the magnitude of the economic challenge we face. We have had short-term difficulties caused by the lack of forecasts from the Office for Budget Responsibility along with the mini-budget.
“But there are also inflationary and interest pressures around the world. Russia’s unforgiveable invasion of Ukraine has caused energy and food prices to spike. We cannot control what is happening in the rest of the world, but when the interests of economic stability means the government needs to change course, we will do so and that is what I have come to the House to announce today.”
Sterling rose against the dollar to $1. 14 as Mr Hunt laid out his plans to MPs. In the stock market, the FTSE 100 index of the UK’s largest companies rose 0. 9%.
Jeremy Hunt, who appointed Chancellor of the Exchequer last Friday, today scrapped at least two of the measures contained in his predecessor Ki Kwarteng’s Sept. 23 mini-budget.
Hunt is also ending the Energy Price Guarantee (EPG) scheme and the Energy Bill Relief Programme (EBRS) for UK families and businesses. These were announced through Prime Minister Liz Truss when she took office early last month.
The EPG was supposed to last two years but will now only run until April 2023. It is possible that the EBRS, which was due to run until March 31, 2023, would have been extended if a review revealed that more was needed at this stage.
Among the measures announced by Mr Hunt is the scrapping of the planned reduction in the basic rate of income tax by 1p to 19p next April. The Chancellor said the basic rate will remain at 20p “indefinitely”.
The chancellor said plans to cut the dividend tax by 1. 25 percent, also from next April, were also being abandoned. According to the Treasury, the combined savings from those last two tax reversals amount to around £7 billion per year.
Mr Hunt also said that plans to repeal reforms to off-payroll working rules – also known as IR 35 rule changes – would be scrapped.
The freeze on alcohol taxes, which would come into effect from February 1 next year, has also been removed. The Treasury added that plans to introduce a new VAT-free grocery shopping scheme for non-British visitors to Britain were also being scrapped.
A 1. 25 point relief in National Insurance contributions from next month has been maintained, as have adjustments to the stamp duty regime in England and Northern Ireland.
Explaining his decision to overhaul the energy support programme, the Chancellor said that it would be irresponsible of the government to “continue exposing the public finances to unlimited volatility in international gas prices”.
He added that from April 2023 a Treasury-led review will be introduced on how to help families and businesses with their energy expenses.
Today’s announcements come on the heels of several significant policy changes that were themselves announced in the mini-budget.
Last week, the government announced the cancellation of one of the key elements of the mini-budget: a plan to prevent corporate tax from rising next April from 19% to 25%. This will continue now. On the same day, plans to remove the extra 45p from the GBP revenue source were also scrapped.
The Treasury estimates that the savings made from these two measures come to £32 billion a year.
Hunt said he had made today’s decisions for the UK’s economic stability and to give confidence in the government’s commitment to fiscal discipline: “The government is prepared to act decisively and on a sufficient scale to regain the country’s confidence. “
But Hunt cautioned that “tougher decisions will have to be made, whether it’s on taxes or spending. “
As a result, departments will be asked to increase efficiency in their budgets. The Chancellor will announce additional adjustments to fiscal policy on 31 October.
Jason Hollands, chief executive of Bestinvest, said: “Following recent U-turns on scrapping the 45p tax bracket and preventing corporation tax rises, the new Chancellor of the Exchequer has this morning completely gutted the policy Prime Minister’s fiscal A concerted effort to appease the bond market gods and repair the UK government’s broken credibility on fiscal discipline.
“These measures – which bring Truss’s economic experiment to an abrupt end – have helped calm debt markets at a time when government bond yields are now falling. But with real incomes falling, much higher corporate taxes set to apply next year, and the private tax burden as profits are also expected to freeze, UK customer expansion remains very tricky in the short term with a recession underway. “
Victoria Scholar, chief investment officer at Interactive Investor, said: “Jeremy Hunt’s focus on reassuring markets and restoring confidence has worked so far as government bond yields declined and the pound rose. The FTSE 100 posted gains, with utilities and homebuilders (the most budget-sensitive sectors) performing better, while the trusonomy was shaken by the reversal of the biggest tax cuts in 50 years.
Jeremy Hunt, appointed on Friday to upgrade Kwasi Kwarteng as Chancellor of the Exchequer, will make statements and face the House of Commons over the government’s monetary plans.
The chancellor is expected to continue her procedure of reversing commitments made in the so-called mini-budget on Sept. 23, which plunged markets into turmoil, sent the pound to its lowest point ever compared to the U. S. dollar and sparked a crisis in the government. bond markets. This has resulted in a sharp increase in the lending burden.
Markets have fretted about the lack of details similar to the initial tax cuts and proposed financing for growth. Hunt will try to demonstrate a novelty in terms of fiscal rigor and responsibility.
In a notice issued this morning, the Treasury said: “The Chancellor will issue a statement later today, outlining measures of the medium-term fiscal plan that will help fiscal sustainability.
“He will also make an appearance in the House of Commons this afternoon [scheduled for 3:30 p. m. ].
“This follows the Prime Minister’s talks on Friday and further talks between the Prime Minister and the Chancellor over the weekend, aimed at ensuring that sustainable public finances contribute to economic growth.
“The Chancellor will then present the full medium-term budget plan, which will be published on 31 October, in combination with the forecasts of the independent Office for Fiscal Responsibility.
“The chancellor met last night with the governor of the Bank of England and the head of debt control to inform them of these plans. “
After sacking Kwasi Kwarteng on Friday, Prime Minister Liz Truss revoked one of the key elements of the mini-budget: a plan to prevent corporation tax from rising next April from 19% to 25%. This will continue now.
In the past, Kwarteng had scrapped his plans to scrap the 45p surcharge following widespread criticism.
Mr Hunt could simply decide to delay the proposed cut in the fundamental rate of source tax from 20p to 19p, which was due to take effect from April. Another conceivable reversal is the proposed VAT exemption for foreign tourists to the UK.
Changes to National Insurance contributions scheduled for next month are expected to continue, which will run counter to increases announced this year by Rishi Sunak when he was chancellor.
Prime Minister Liz Truss has revoked the resolution adopted in the mini-budget of 23 September to increase corporation tax next April, as planned during Boris Johnson’s previous Conservative administration.
Speaking this afternoon, she said the increase from 19% to 25% will now proceed next year, with the £18 billion raised acting as a “down-payment” on the government’s medium-term fiscal plan for growth.
Much of the market turmoil in recent weeks stems from the fact that the plan, announced on Sept. 23, was unfunded.
Corporation tax is paid by companies on their trading profits and any profits arising from investments and the sale of assets. The ‘small profits’ rate of corporation tax will be maintained, meaning smaller or less profitable businesses will not pay the full 25% rate, with those with less than £50,000 profit continuing to pay 19%.
The full details of the fiscal field that will underpin the fiscal and investment plan will be released on October 31 through Jeremy Hunt, who appointed chancellor the day after Ki Kwarteng’s dismissal.
Mr Hunt’s forecasts will be accompanied by a report by the independent Office for Budget Responsibility.
Today’s U-turn on corporation tax follows Mr Kwarteng’s withdrawal earlier this month, when he abandoned his plans to scrap the additional forty-fivep tax rate, a debatable part of his mini-budget.
Truss says she remains committed to creating an economy with low taxes, high wages and high growth, with low levels of public debt and a more effective public sector. He said public spending levels would increase at a slower-than-expected pace.
The British pound rallied against the dollar after falling below $1. 12 as currency markets digested the prime minister’s press conference.
In the stock market, the FTSE100 index of British shares rose 1. 7% on the day to 6,967.
Jason Hollands, chief executive of Bestinvest, commented on the changes: “Businesses and investors don’t like instability and uncertainty, however, the removal of the corporate tax at least signals to bond markets that the government is responding to considerations about fiscal discipline.
“The resolution of the corporate tax increase in April 2023 – the policy set out in the last full budget – appears to be a tactic to appease bond markets through a balanced budget, while at the same time seeking to preserve the benefits of tax cuts under non-public taxation conditions.
“We still have an autumn fiscal statement on 31 October, but it seems unlikely given the chastening experience of the last three weeks that it will contain anything new or ambitious.”
Matthew Amis, investment director, abrdn said: “It feels like more chapters are still left in this story but, for the time being, financial markets and, particularly, the gilt market can take a deep breath and calm down a touch. This should allow the Bank of England to step away from gilt buying on Monday as planned and increases the prospects of quantitative tightening starting in a few weeks’ time.
“Government bond yields have risen particularly in the last two sessions, which makes sense. However, pressure remains for government bond yields to rise from now on, even if volatility is lower. Over the next few months, the Gilt market will continue to want to absorb incredibly high levels of Gilt supply.
“However, with ‘Trussonomics’ categorized as ‘catastrophe,’ we can return to a functioning government bond market. “
Former health secretary Jeremy Hunt has been appointed Chancellor of the Exchequer after Kwasi Kwarteng was sacked from the role by Prime Minister, Liz Truss, having lasted just 38 turbulent days in the office, writes Andrew Michael.
The appointment comes as Truss prepares to announce significant adjustments to her government’s recent mini-budget that have sent market turbulence into turmoil, with the pound falling to a record low against the dollar and a sell-off of billions of pounds’ worth of British pension fund assets.
Earlier this summer, Mr Hunt ran against Ms Truss in the Conservative Party leadership contest, but was ejected from the process early on having failed to secure enough support from fellow MPs.
Mr Hunt had previously lost out to Boris Johnson in the final round of the 2019 Conservative Party leadership contest.
Only 21% of UK households have switched on their central heating since the end of summer this year, writes Bethany Garner, in a bid to tackle emerging energy costs.
And, as families continue to grapple with the increasing burden of living, around one in five families (18%) intend to delay turning on their heating until December, two months later than usual, while 22% He says he will use it. on rare occasions.
More than three quarters (78%) said they will wear warmer clothing and ‘extra layers’ around the house rather than use their central heating, the survey found.
Households also expect to use their heating more conservatively than in previous years, with a quarter of respondents (25%) making plans to heat express rooms.
Nationwide, it collected a total of 4,078 responses between Aug. 12-15 and Sept. 30-Oct. 3.
This report coincides with the government’s energy value guarantee, which came into effect on October 1. Although the guarantee guarantees that a typical British family will pay no more than £2,500 a year on their energy bills, this is still £529 more. than under the past value limit.
Mandy Beech, Nationwide’s director of retail, said: “This survey shows how many other people are struggling, even given the government’s energy value limit, and other people need to think carefully about when and in which rooms they turn on the heat. “. »
The campaign to save energy is part of a broader cost-cutting trend brought on by the cost-of-living crisis: 81% of families surveyed nationally are making plans to reduce their energy spending. One way or another.
Food is a key area of savings: almost a fraction of respondents (48%) say they have reduced their consumption of food and takeaways, 40% spend less on new meat at the supermarket, 27% buy fewer new fruits and vegetables, and 33% convert. where they eat, they do their shopping.
In other spending spaces, 36% say they use their car less, while 33% reduce spending by mending clothes than buying new clothes.
Almost a third of people (32%) have not saved money since April, while a further 40% have managed to save a maximum of just £300.
In the absence of a sufficiently good savings reserve, households threaten to resort to borrowing to get through the winter.
A Nationwide study found that 20% of families would use a credit card to cover emerging energy costs, while an additional 15% said they would use a private loan.
Ms Beech added: “Now more than ever, we inspire those suffering financially to speak to their money service provider. “
Last August, Nationwide introduced a cost-of-living hotline for financially conscious consumers.
Kwasi Kwarteng, Chancellor of the Exchequer, has brought forward his debt budget plan by more than three weeks (and the accompanying official forecasts), writes Andrew Michael.
Kwarteng, the architect of the U. K. government’s recent mini-budget that ended an era of stock market turmoil and the pound to a record low against the dollar, had promised to publish a medium-term fiscal plan on Nov. 23, 2022.
But with the chancellor under pressure to act more quickly, the contents of the plan – which will show how it will put the UK’s debt on a downward trajectory within five years – will now be published on October 31.
The new budget plan will be judged on the same day by the independent Office for Budget Responsibility (OBR), whose verdict is eagerly awaited in money markets.
In September, amid a series of announcements giving the green light to fracking as a viable means of energy production in the UK, the mini-budget included proposals for £45 billion of unfunded tax cuts.
The resolution to remove the additional source of forty-five pence from the income tax rate for higher earners subsequently fell.
But the overall effect of the mini-budget not only caused a run on the pound, but also forced an intervention through the Bank of England to achieve monetary stability in government bond markets.
In a letter to MP Mel Stride, chairman of the Special Treasury Committee, Kwarteng said the new Oct. 31 date would allow the OBR, which audits the government’s monetary plans, “to capture data, such as the recent quarterly national report. “accounts.
“This will allow for a comprehensive forecasting procedure that meets the criteria that meet the legal needs of the Fiscal Responsibility Charter followed by Parliament and will also provide a comprehensive assessment of the economy and public finances. “
Customers at 11 water utilities will see their expenses reduced by £150 million after their suppliers failed to meet their functionality targets, writes Candiece Cyrus.
Ofwat, the market regulator, found that 11 of the UK’s 17 water corporations failed to meet their targets for water source disruptions, polluting incidents and sewer flooding for the 2021/22 year. In recent months there have been reports of pollutants in rivers and portions of the coastline.
Also over the summer, the Environment Agency announced that the functionality of England’s nine water and sewerage corporations had fallen to its lowest point since testing began in 2011, prompting it to call for measures such as higher fines for planned pollution.
The lion’s share (£80 million) of the £150 million penalty will be returned to the customers of the two worst-performing companies, Thames Water and Southern Water.
The most successful companies, such as Severn Trent Water, that have exceeded their targets, will increase their customers’ expenses. Taking into account the amount that the most successful companies will contribute to their customers’ expenses (£97 million), the net loss to the water sector will be £53 million in reduced bill payments.
However, Ofwat says the 17 water corporations will increase their spending in line with the inflation rate measured through the Consumer Price Index, adding owner-occupied home (CPIH) prices, offsetting any reductions. In August, the annual CPIH rate stood at 8. 6%.
Households expect adjustments in their spending in 2023-24.
David Black, chief executive of Ofwat, said: “When it comes to meeting their customers’ expectations, many water corporations are failing and we are asking them to return around £150 million to their customers.
“We expect corporations to get back up and running every year. If they don’t, we will hold them accountable.
“All water companies need to earn back the trust of customers and the public and we will continue to challenge the sector to improve.”
Warren Buckley, director of customer experience at Thames Water, which has 15 million visitors, said: “Last year we saw significant relief in the company’s total number of court cases as a result of our visitor service, as well as 39% relief in source outages over the last year. Two years.
“We can verify that any monetary consequences incurred will be reimbursed to consumers as part of their expenses and will obviously show on the bills. Adjustments to household spending will be announced next year.
“We are determined to do better, and while we are moving in the right direction, we know there is still a long way to go. »
Water utilities will be required to meet shared, custom-designed annual targets. They were last established at the last price review in 2019 and will remain in place until the next price review in 2025.
Chancellor of the Exchequer MP Kwasi Kwarteng announced on Twitter the reversal of a key detail of last month’s mini-budget: the abolition of the additional 45p tax rate for those earning £150,000 a year. The year will not take place now. Array
Mr Kwarteng is due to attend the Conservative Party convention in Birmingham later today.
On his social media, Mr Kwarteng said: “It is evident that the abolition of the forty-fivep tax rate has become a distraction from our global project of addressing the demanding situations facing our country.
“Accordingly, I announce that we are going to proceed with the abolition of the forty-fivep tax rate. We sense it and we have listened.
A number of senior Tory MPs including former ministers Michael Gove and Grant Shapps have been highly critical of the proposed abolition, heaping pressure on the Chancellor and Liz Truss, Prime Minister, who was advocating the measure as recently as yesterday.
Following the ‘mini-Budget’ fiscal statement on Friday 23 September by Kwasi Kwarteng, Chancellor of the Exchequer, the Treasury today issued an explainer setting out how the government’s controversial Growth Plan will be realised, writes Kevin Pratt.
The news came the same afternoon from Andrew Bailey, governor of the Bank of England, saying that the bank was following the volatile functionality of sterling in currency markets and that its financial policy committee would not hesitate to raise interest rates. to control inflation at its next meeting scheduled for November 3.
There had been speculation that the Bank would be forced to take unforeseen emergency measures for the pound after it took a beating in Asian markets and hit a 50-year low on Monday morning. to the U. S. dollar.
Taken together, the Treasury and Bank decisions appear to be a concerted effort to calm markets, with commentators concerned that the negative reaction to Friday’s will have a deeply damaging effect on the UK economy.
The Treasury says ministers will announce detailed measures in October and early November, adding tweaks to the planning system, business regulation, childcare, immigration, agricultural productivity and virtual infrastructure.
In October, the Chancellor will set out regulatory reforms aimed at ensuring that the UK’s money sector remains globally competitive. On Friday, he drew attention in certain circles by cutting the cap on bankers’ bonuses (see article below).
There will be another one through Mr Kwarteng – called the medium-term fiscal plan – on 23 November. It will provide more details on the government’s regulations for managing its finances, adding that it will ensure that debt falls as a proportion of gross domestic product over the average.
It has stated that it will abide by departmental expenditure agreements for the existing expenditure review period.
The Chancellor has asked the Office for Budget Responsibility (OBR) to provide a full forecast of the country’s finances to accompany this statement.
Then there will be a full one in the spring, with new OBR forecasts.
Kwarteng responded to his complaint on Friday by doubling down on his tax cut agenda, saying additional adjustments would be made to the tax regime in a bid to breathe life into the expansion at a 2. 5% trend rate consistent with the year.
Increases to Stamp Duty allowances and cuts to income tax featured prominently in today’s fiscal statement by Kwasi Kwarteng MP, Chancellor of the Exchequer.
He also confirmed the package of measures designed to reduce the impact of rising energy bills for households and businesses. He said the action to control prices would cost £60 billion over six months.
Yesterday, the Treasury released the details of how the increase in National Insurance Contributions (NIC) imposed earlier this year will be reversed as of November 6. And the planned arrival of an income tax source to fund health and social care in April 2023, which would have repositioned the transitory increase in IAS, will no longer be implemented (see article below).
Kwarteng said the government would seek economic expansion at an annual rate of 2. 5% and said the government was adopting “a new technique for a new era”. Growth in the second quarter of 2022 was -0. 1%, and the Bank of England said that third-quarter expansion would likely be negative as well.
Two successive quarters of negative growth is taken to signal a recession.
To fuel growth, the government is proposing almost 40 new low-tax investment zones across England, and says it will work with devolved authorities in Scotland, Wales and Northern Ireland, to extend the scheme across the country.
The planned increase in Corporation Tax from 19% to 25%, slated for April 2023, has been pulled. The Chancellor said the move will ensure the rate will continue to be the lowest in the G20 group of nations.
Mr Kwarteng is also removing the cap on banker bonuses to encourage growth in the financial services sector. The cap says a bonus cannot be higher than twice a banker’s salary without shareholders’ agreement.
Other highlights today include:
The Chancellor has presented a package of cuts to the Land Stamp Duty (SDLT) in England and Northern Ireland, with immediate effect. Scotland and Wales have their own tax regime on the acquisition of real estate.
The SDLT rate band 0 (the threshold below which stamp duty is not payable) will be doubled from £125,000 to £250,000. That means another 200,000 more people a year can buy a home without paying any asset tax, according to Mr. Simpson. . Kwarteng.
Given the above rate of 2% charged between £125,000 and £250,000, the maximum that can be stored is £2,500.
First-time buyers, who are lately paying SDLT for the first £300,000 on homes costing up to £500,000, will see the 0 rate band extended to £425,000 on homes costing up to £625,000.
Rightmove said that by extending the tax-free threshold to £250,000, 33% of all homes recently listed for sale on its portal in England will be absolutely exempt from asset tax, a sharp increase from 7%. He claims that less than an hour after the announcement, traffic to him increased by 10%.
The SDLT rate of 3% that applies to the acquisition of other housing, such as houses or rental housing, will be maintained.
Reactions to today’s announcement on the easing of the SDLT have been mixed. Tomer Aboody, director of asset lender MT Finance, said: “The stamp duty reduction will bring interest back into the asset market by helping first-time buyers move up the ladder, allowing them to offset the top burden of mortgages with their savings. “
But other commentators have warned that the cuts will fuel rising house prices, as sellers add more onto asking prices in the knowledge that buyers are making a saving elsewhere.
Ben Merritt, director of mortgages at the Yorkshire Building Society, said: “Rather than simply focusing on tax cuts, we are looking for other answers, particularly for other people who can’t move into smaller homes, to check and stimulate a stunted economy. “market. “
Research conducted by the construction company has shown that while 19% of homeowners who want to downsize their home see stamp duty as a barrier to moving, nearly a quarter (23%) say it is the inadequate source of adequate housing that prevents them from moving.
However, the chancellor said he intended to address the property shortage by “increasing the availability of surplus public land” to build new homes.
Help to Buy – a government scheme which offers an equity-linked loan of up to 20% of the property value to – applies only to new-build properties.
Mr Kwarteng announced changes to the Universal Credit (UC) scheme designed to encourage more claimants into work.
The administrative source of income threshold (the amount UC recipients will have to earn before moving from the intensive job search scheme to the Light Touch scheme) will be higher than its current price of £355 per month for Americans or £567 per month for couples.
The new threshold, which comes on top of an increase already planned for September 26, will be 15 hours a week at the national minimum wage for Americans (about £617. 50 a month) and 24 hours a week (about £988 a month) for couples. . It will come into force from January 2023.
As a result of this change, around 120,000 Universal Credit applicants will be transferred to the Intensive Job Search Scheme, which requires them to take steps such as attending appointments with a paint trainer and submitting assignment applications. ‘Profits are reduced.
Applicants over the age of 50 will also benefit from a more personalized offer through employment agencies, with the aim of expanding their source of income before retirement.
They want to push for reforms to replace the limit on regulatory pension payments, the maximum amount that occupational explained contribution pension plans can charge delinquent savers. The payment currently represents 0. 75% of the budget under administration.
With this reform, the government aims to inspire the pension budget to invest in cutting-edge British corporations while selling higher returns to savers.
In addition to reforms to cap tariffs, the recently announced Long-Term Investment in Technology and Science (LIFTS) festival aims to spur more investment in generation companies. It will provide up to £500 million for a new budget that invests in UK science and generation companies.
The Treasury has published plans for the creation of low-tax investment zones across the UK, with 38 sites so indexed in England.
The zones will see planning regulations relaxed, with businesses in the areas set to benefit from lower taxes in an effort to boost investment, industrial growth, employment rates and home ownership.
Commenting on the decision, the Chancellor said: “To expand throughout the country we want to go further, with specific movements at the local level.
“We are going to reduce taxes. For companies located in designated tax zones, for 10 years there will be accelerated tax relief for structures and buildings and a 100 percent tax relief for eligible investments in plant and machinery.
Businesses in those spaces will benefit from a full exemption from stamp duty on land and buildings for advertising use or for residential development.
The local authorities listed are:
The Chancellor also announced programs for investment in start-ups and a development of the Corporate Stock Option Plan (CSOP), which allows corporations to offer inventory features to their employees.
These schemes, in addition to the Seed Business Investment Plan (SEIS), will offer benefits to investors in corporations considered important to the economy, adding tax exemptions.
As of April 2023:
This will help the 2,000 businesses that use the plan year after year, according to the Treasury.
While adjustments to the systems, venture capital budget (VCT) and enterprise investment systems (BIT) have yet to be announced, the government has said it “sees interest” in expanding those systems in the future.
The share plan limit will also be doubled in April 2023, from £30,000 to £60,000 per director or individual employee.
Ahead of Friday’s mini-budget, the chancellor announced that the 1. 25 percentage point increase in National Insurance Contributions (NIC) introduced last April and reduced in July would be fully reversed in November.
The government says most workers will get relief on their NICs through the November payroll. Some will get it in December or January, depending on their employer’s payroll software.
The NIC pay thresholds that were raised in July to prevent 2. 2 million lower-wage employees from paying NCI will remain at existing levels. For other people with a salary of less than £12,570, this means they still won’t pay any tax. about your income.
It was established that the highest NCI rates would return to grades 2021-2022 in April 2023, when a separate fitness and social services tax would go into effect, adding 1. 25% to source of income tax bills.
Chancellor Kwasi Kwarteng MP has ended the tax, which would have raised £13 billion a year. However, he said that investment in fitness and social facilities will be and remain at the same point as if the tax were in place.
The costs will be through general taxes.
The government says that, taken together, the adjustments will mean that almost 28 million people will pay £135 less this tax year and £330 less in 2023/24, with 920,000 businesses saving an average of £10,000 in 2023 as they no longer pay a higher point of national employer insurance.
The Chancellor’s tomorrow, dubbed his “growth plan”, is expected to verify that increases in dividend tax rates will be phased out from April 2023.
The income tax on dividend accumulation increased by 1. 25 percent in April 2022, so dividend earners also help fund physical care and social services. According to the government, removing the accumulation will save dividend payers an average of £345 next year.
A survey of 4,963 households the Office for National Statistics has confirmed that 90% of Brits are seeing their cost of living increase, with four in five adults worried about the impact of higher bills.
The survey, covering the period 31 August to 11 September, found:
The main reasons reported for the rise in the cost of living were:
The ONS, the UK’s official knowledge-gathering body, also asked respondents how their household finances had been affected over the past seven days. Found:
On Friday 23 September, Chancellor of the Exchequer MP Kwasi Kwarteng will present a mini-budget that will set out how the government plans to tackle the cost-of-living crisis in general and the impact of emerging energy expenditures in particular. .
More detail is expected on the Energy Price Guarantee, announced by the Prime Minister on 8 September, in particular the help to be provided to businesses. We already know that the Guarantee will cap average household bills at £2,500 a year for two years from 1 October.
The Chancellor is also expected to announce a series of tax-cutting measures, including a reduction in national insurance contributions.
The UK’s monetary regulator has finalised stricter regulations for the marketing and promotion of high-risk investments, writes Andrew Michael.
As part of its new, stricter set of rules, the Financial Conduct Authority (FCA) says companies that approve and publish marketing materials “must have the appropriate expertise. “
The regulator added that companies that market certain types of high-risk investments “will want to implement greater controls so that consumers and their investments are a smart match. “
According to the FCA, companies “should also use clearer, more visual threat warnings. “In addition, certain investment incentives, such as “referral bonuses,” are now prohibited.
As part of its investment strategy for clients, the FCA says it wants to reduce the number of people investing in high-risk products that do not reflect their risk appetite. In other words, making investments that are irrelevant to a certain person. monetary situation.
Although the FCA warns consumers about the monetary risks of investing in cryptocurrencies, the regulator’s new regulations may not actually apply to crypto asset promotions.
But the FCA said that once the UK government has confirmed in legislation how crypto marketing is to be brought within its remit, it will then publish final rules on the promotion of cryptoassets.
They adhere to the same technique as other high-risk investments.
FCA lead executive Sarah Pritchard said: “We need other people to invest with confidence, see the threats at hand and get investments that are right for them and reflect their threat appetite. “
“Our new simplified risk warnings are designed to help consumers better understand the risks, albeit firms have a significant role to play too. Where we see products being marketed that don’t contain the right risk warnings or are unclear, unfair or misleading, we will act,” Pritchard added.
Nathan Long, senior analyst at investment platform Hargreaves Lansdown, said: “With an understanding of customer behaviour, the FCA is making pragmatic adjustments to the rules to crack down on retail investors who buy high-risk investments. “
Long added: “The attention has rightly been placed on improving consumer understanding at the point of their decision making.”
Companies offering prepaid funeral plans will now be regulated through the Financial Conduct Authority (FCA), offering greater coverage to customers.
Funeral plans are designed to cover the main costs of cremation or burial, so that your family are not left with the bill after you die. Plans can be paid for upfront, as a lump sum or in monthly instalments of between one and 10 years.
The regulations will prevent corporations from making direct phone calls to prospective consumers and paying commissions to intermediaries such as funeral directors.
Providers will also be required to provide funeral for all clients, unless they die within the first two years of enrolling in the plan, in which case a full refund will need to be offered.
The FCA’s regulation also includes funeral schemes under the Financial Services Compensation Scheme (FSCS), meaning consumers can now claim their cash up to £85,000 if a supplier goes bankrupt, while the Financial Ombudsman Service (FOS) will be able to be called upon if a visitor feels they have not been treated by a provider.
Complaints about issues that occurred prior to FCA regulation can be raised, so long as the provider was registered with the Funeral Planning Authority (FPA) at the time.
Majority of market now regulated
So far, 26 funeral services have been authorised through the FCA, with the UK’s largest being Array Co-Op Funeral Plans Limited and Dignity Funerals Limited.
These newly licensed companies account for 1. 6 million plans, or 87% of the UK market. Unauthorized providers have until October 31, 2022, to transfer their packages to an approved company or refund customers.
Emily Shepperd, executive director of authorisations at the FCA said: “We have worked tirelessly to assess funeral plan providers, under our robust authorisation process. We are pleased that 87% of the market is now under regulation.
“With our new regulations in place, consumers will be older when they want it most. “
The FCA advises customers to check whether their provider has been authorised. If not, they contact the provider to ask about their plan.
The UK regulator, the Financial Conduct Authority (FCA), is introducing regulations designed to protect consumers from being scammed and ensure they are treated and get the support and facilities they need.
The FCA says its new customer obligation “will fundamentally record the way businesses serve customers. It will establish stricter and clearer criteria for customer coverage across all currency facilities and require businesses to put their customers’ wishes first. “
It will require firms to:
Among the consequences of the new requirements, which will gradually come into effect from July 2023, will be the legal responsibility of companies to offer all their consumers the most productive offers, rather than using them to attract new consumers. This rule is already in effect for home and auto insurance.
The opposite will also be true, as corporations will want to offer their offerings to new customers.
Le Devoir is made up of a general precept and new regulations that will mean that consumers will get communications they can understand, products and facilities that satisfy their desires and provide fair value, and that they will get the visitor they want, when they want it. .
The FCA says the new environment should foster innovation and competition. It says it will be able to identify practices that don’t deliver the right outcomes for consumers and take action before practices become entrenched as market norms.
The FCA’s Sheldon Mills said: “The current economic climate means it is more vital than ever for consumers to be able to make sensible money decisions. The money industry wants to provide Americans with the data they want and put its consumers first. place.
“The obligation to consume will drive a fundamental shift in monetary facilities and encourage festival and expansion based on high standards. As Le Devoir raises the bar for the companies we regulate, it will prevent harm and allow us to act on a more temporary basis. and with a bit of luck when we run into new problems.
Households suffering financially due to the worsening cost-of-living crisis are unable to apply for help due to a lack of understanding or a sense of shame.
According to a report released today through the monetary regulator, the Financial Conduct Authority (FCA) and MoneyHelper, a government-backed online recommendation service, 42% of borrowers who had ignored their lenders’ attempt to touch them had done so because they thought so. shameful’.
The study also found that two in five (40%) people with financial problems mistakenly believed that talking to a debt counselor would have a negative effect on their credit report.
Other reasons for not being able to cope with money problems include doubts about the price of contacting lenders, as 20% believe it would be futile, and negative perceptions about the possible outcomes: 18% fear wasting access to existing credit and 16% are worried. on how to access credit in the future.
The FCA urged consumers who are struggling to keep on top of their finances to contact lenders to discuss available options, such as a potential payment plan – and to seek free advice from MoneyHelper.
More than half (52%) of borrowers in financial difficulty waited more than a month before seeking help and, of these, 53% regretted not doing it sooner.
Sheldon Mills, FCA’s executive director of clients and festivals, commented: “Anyone can find themselves in monetary difficulty, and the emerging burden of living means more people will struggle to make ends meet.
“If you’re hurting financially, the most important thing is to let someone know. If you’re worried that you won’t be able to make your payments, let your lender know as soon as possible, as they may offer you affordable features to pay off what you owe.
Debt advice charities such as StepChange or Turn2Us are also independent and free, and contact will damage (or even be visible) your credit report.
The FCA’s recommendation coincided with a Bank of England report, also published today, which warns that other highly indebted people will find themselves “more exposed” to additional price increases on goods such as food and energy, especially if prices continue to rise. than expected, or it will be more complicated to borrow.
The Bank’s Financial Stability Report shows that the cost of living has risen sharply in the UK and the rest of the world, while the outlook for expansion has deteriorated.
He largely blames Russia’s illegal invasion of Ukraine; Both countries produce a significant portion of the world’s wheat supply, as well as other commodities such as vegetable oil, leading to high food costs and high degrees of volatility in commodity markets.
The Bank said that “like other central banks around the world,” it has raised interest rates to curb value increases. However, prices continue to rise with annual inflation (9. 1% in May) at its highest level in 40 years.
Combined with tighter borrowing conditions, paying off or refinancing sizable debt will be more difficult, the Bank said. He expects households and businesses to come under even more pressure in the coming months, while also being “vulnerable to additional shocks. “
Both reports land against the backdrop of a political crisis in which two of the Government’s most senior cabinet members – the Chancellor of the Exchequer, Rishi Sunak and Health Secretary, Sajid Javid – both resigned over lack of faith in the Government’s leadership.
Former education secretary Nadhim Zahawi has now taken over as chancellor but will inherit persistent problems, compounded by rising oil, energy and food prices, as well as the falling value of the pound.