Another busy week with a wide variety of articles.
Tweet of the week
The no of newly benefit capped households on #universalcredit rose by a massive 665% between Feb & May; at a time when the things people can do to escape the cap (get a job; move to a cheaper house) were basically impossible https://t.co/v0JvzWKzxy
— Ruth Patrick (@ruthpatrick0) August 6, 2020
Retailers ‘push shoppers into debt’ Times (paywall): Online customers with H&M now find that buy now, pay later is the default payment option.
First time buyers: The end of the bank of mum and dad? BBC: Now, to get a mortgage with a 10% deposit, the buyer must prove that they saved 75% of that deposit themselves.
FCA highlights concerns when credit firms allow repeat borrowing FCA: The report also calls out concerns about behaviour which suggests some customers may be trying to deal with financial difficulties through further borrowing. In these cases, the FCA expects the firm to assess whether further borrowing is in the customer’s best interests.
High cost credit:
- FCA Review- Non Standard Finance RNS – NSF is conducting a review of its two guarantor lending brands following concerns raised by the FCA.
- Kerrigan & others v Elevate Credit International – judgement. It’s 73 pages long… I’ll be writing an article on it soon!
- High-cost lenders using ‘exotic holidays’ to encourage debt BBC.
- BrightHouse reopens branches to claw back cash from customers who aren’t repaying debts Mirror.
The UK’s private debt crisis will make this recession so much worse Guardian: Businesses were encouraged to take out state-backed loans. Households got payment “holidays” on mortgages and credit cards. These measures … simply kicked the can down the road – with added interest.
Report of inquiry into ‘Lending and Borrowing post-Covid’ APPG on alternative lending: The aim of the Inquiry was to get an early feel for the impact of the Covid crisis on consumer finances,
- Universal Credit: House of Lords select committee joins calls for Government to write off tax credit debt for claimants iNews.
Benefits & other news
Coronavirus: Redundancy ‘stressful and upsetting’ BBC: The number of firms that notified the government in June about plans to cut 20 or more jobs was five times higher than in the same month last year, figures obtained by the BBC show.
Banks face second wave of PPI payouts and they are desperate to stop it Times (paywall): It is reported that claims companies are winning court cases saying people should get a full PPI refund in a Plevin case, not the lower % that the FCA set as the standard redress.
Why Britain is more geographically unequal than any other rich country Economist: Other countries have poor bits. Britain has a poor half.
Energy bills to fall for 11 million, but don’t be fooled as most will still be overpaying by £100s/yr MSE: The new cap level isn’t the maximum anyone will pay, though. The price cap sets a limit on the rates you pay for each unit of gas and electricity, so if you use more, you’ll pay more.
I’m 39, have lost my job and am in debt – can I unlock my £18k pension? Mail : With huge tax penalties and scam risks – Steve Webb warns: DON’T do it!