My pick of last week’s news is The decade that broke Britain: the disastrous decisions that left millions in a cost of living crisis.
Graph of the week
From – The proportion of private renters’ expenditure taken up by housing and utility costs has jumped from 28 per cent in 2005 to 42 per cent last year FT (paywall)
Debt news
UK credit card borrowing rises at fastest annual rate for 17 years Guardian: The annual growth rate for credit card borrowing hit 11.6% in April – the highest figure since November 2005. The rate for all consumer credit increased to 5.7% in April, from 5.2% in March, rising faster than at any time since just before the pandemic.
To ‘level up’, the UK needs a real jubilee: a mass write-off of debts OpenDemocracy: Even before cost of living crisis, the poor owed the government – or, the Crown – £16bn. Why not just write it off?
PRACTICE DIRECTION 51ZC – The Small Claims Determination Pilot gov.uk: the Pilot shall apply to all small claims in the County Courts at Bedford, Luton, Guildford, Staines, Cardiff and Manchester… “A determination without a hearing can be a proportionate and efficient means of determining a small claim in cases where it is not necessary to hear oral evidence or oral advocacy to determine the issues justly.”
Fast loan scam targeting those struggling in the cost of living crisis surges and Lloyds puts out an ‘urgent warning’ Mail: Applicants who click on adverts will have loans ‘approved’ regardless of their credit history, but are then told they must pay an upfront fee by bank transfer before receiving the money.
Credit unions are helping Britons survive – but can they really rival banks? Guardian: South Manchester credit union has been offering no-interest loans of between £100 and £2,000. Customers may be eligible in situations in which they are turned down for a standard loan with interest because of affordability reasons, but removing the interest makes the loan affordable.
Klarna shake-up means missed payments will show on your credit file from today Mirror: Even though Klarna will start to report your repayment history from today, the new measures shouldn’t impact your actual credit score until the end of the year.
First-time buyers face race against time to use Help to Buy scheme Which? Properties must be reserved by end Oct.
Cost of living
The cost of living: an avoidable public health crisis Lancet editorial: Good nutrition, shelter, and the ability to lead a dignified life are essential foundations of good health. If unaddressed, rising living costs will leave people in health-harming, even life-threatening, situations in the short term, while embedding a public health timebomb for the future.
Tracking the price of the lowest-cost grocery items, UK, experimental analysis: April 2021 to April 2022 ONS: The ONS’s new data, which it describes as “highly experimental”, has resuled from criticism led by Jack Munroe that its normal food inflation data doesn’t accurately measure the inflation rate faced by the poorest.
Money-saving tips can be a turn-off in the cost of living crisis, coming across as judgemental and patronising iNews: Anyone who pretends your average consumer can overcome energy bills of nearly £3,000 and worldwide food shortages through savviness alone is either deluded, callous or both.
Give more pupils free school meals, teachers in England say BBC: “A few weeks back my eight-year-old got two bowls out for breakfast and I said: ‘Don’t have two bowls, that is just being greedy,’ and he said: ‘They’re not both for me mum, one of them is for you as I haven’t seen you eat in days.’,”
The decade that broke Britain: the disastrous decisions that left millions in a cost of living crisis Guardian: for millions of people in Britain, 2022’s growing sense of disaster is another chapter in a story that goes back at least 10 years – to rules and regulations that turned the welfare state into a mess of trapdoors and tripwires
Price Cap predictions soar as EU sanctions on Russia cause volatility in the wholesale market Cornwall Insight: forecast for the October (Q4 2022) Default Tariff Cap has increased to £2,879 for an average consumer, as Russian oil sanctions cause renewed uncertainty across the energy market. The predictions for the January (Q1 2023) Cap are even costlier rising to over £2,900 for the first time.
Energy billing problems:
- Bulb wants to charge me £2,000 for energy I used up to four years ago Mail – the back billing rules should indeed prevent this – but it takes a newspaper to get the amount written off.
- Shocked by a home electricity bill estimate of £40,000 Guardian – a dual meter problem but again it takes a national newspaper asking questions to get it sorted.
It’s not just the £150 council tax rebate… local councils have been promised over £1bn to help struggling families: Here’s how to get your share! Mail: Local councils have been promised more than £1billion to help households struggling to cope with soaring bills. But few people know this pot of cash exists and a postcode lottery means many are in danger of missing out.
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Lance says
I think the article about credit utilisation is interesting. I’ve no doubt that some sadly, will be using credit to plug a shortfall, but some may just be taking advantage of relatively cheap credit in an inflationary environment. The way things are right now, (high interest debt aside) banks are effectively paying consumers to take out credit. Perhaps if there was an analysis of the interest rates being paid on new credit, we could read more into the motives behind why debt is increasing.