My pick of last weeks news is Personal debt defaults almost double in a month.
The effect of Covid-19:
- Covid has exacerbated soaring problem debt levels in the UK Guardian: Entrenched inequality even before the pandemic has left people on low incomes struggling to manage, let alone pay off debts.
- Lenders continue to provide financial support for customers impacted by Covid-19 UK Finance: Statistics on falling numbers of payments breaks.
- Personal debt defaults almost double in a month Independent: Almost 800,000 people failed to meet their credit or loan obligations in October, with the number of people missing payments up by around 370,000 in the last month.
- Brits paying off debts at fastest rate since records began 26 years ago Mirror: Credit cards were being cleared fastest, with £400million repaid in October alone. But while unsecured debts on cards and overdrafts were cleared, the opposite was happening with mortgages.
- How people in debt are coping with the impact of #Covid19 Money Advice Trust: sharing stories from callers to National Debtline and Business Debtline
Barclaycard to hike minimum payments in January – are you affected? my article – Barclaycard put the news about increasing the minimum in an email entitled “Changes to your T&Cs” which many people may have ignored.
Some debt advisers are becoming concerned about the Breathing Space regulations, see
We are debt advisers, and we are campaigning to create a better ‘breathing space’ for people in debt. To extend the 60-day limit, and to provide more effective solutions including ‘fresh starts’ for those who need it. Website and next steps coming soon. #Betterbreathingspace
— we_are_debt_advisers_uk (@DebtWe) December 4, 2020
Debt fears over Flava’s pay-later supermarket offer Times (paywall): Flava has started selling cut-price groceries online that can be paid for in four weekly instalments. It is not regulated by the FCA because the deals are interest-free and fee-free.
An evaluation of our rent-to-own price cap FCA: With caveats about counterfactuals, the anti-avoidance measures seem to have been successful and the cap reduced RTO prices.
UK food bank trust says half of users repaying universal credit debts Guardian: Food bank users more commonly in debt to government than to friends or payday loan firms.
Beware costly credit card refund trap that could leave you facing late fees and black marks on your file Mail: Customers who have had refunds leaving them without a balance are being sent arrears letters if they don’t make the minimum payment.
Government’s solution to cladding scandal: just take out a second loan Times (paywall): Hundreds of thousands of flat owners could be forced to take on 30-year loans akin to a second mortgage to fix fire safety defects… Leaseholders hit by the scandal are starting to file for bankruptcy as an investigation reveals.
Bailiff misconduct during the pandemic supports the case for regulation StepChange: Bailiffs misrepresenting their powers –
Bailiffs acting aggressively- Bailiffs not taking account of vulnerability.
Benefits & other news
Webinar on Universal Credit: Case law, Coronavirus and other updates for debt advisers [2/12/2020] IMA – it’s accessible to free debt advisers who sign up.
Two-child benefit cap influencing women’s decisions on abortion, says BPAS Guardian: Charity says policy was important factor in many deciding to terminate pregnancies during the pandemic.