My pick of last week’s news is the FT article on credit card interest rates and why they have been increasing.
Graph of the week
Taken from FT article: Credit card interest rates hit UK consumers
The age spectrum:
- 107,000 18 year olds are languishing in debt OU Business School: This is generated through payday loans (60%), credit cards (60%), unauthorised overdrafts (57%), store cards (49%) and catalogues (49%).
- Equity release soars 48% among elderly homeowners with a third using it to clear their mortgage or consolidate debts Mail: 3,400 homeowners aged 75-84 released cash from their homes in the first six months of the year, up from 2,300 last year.
Bank Rate increased to 0.50% Bank of England: the MPC voted by a majority of 7-2 to increase Bank Rate by 0.25 percentage points, to 0.5%.
Lloyds used record low rates to bump up profit margins by fiddling with borrowing and savings deals Mail: Lloyds’ net interest margin… has climbed to 2.9 per cent. This is an increase from the 2.74 per cent it made when rates were last 0.5 per cent, and the 2.69 per cent it made just after the cut.
BrightHouse: The FCA’s actions are not sufficient Responsible credit: it averages around just £60 per person, and is woefully inadequate to compensate people for the damage that this company has caused.
Credit card lending picks up again amid warnings over UK household debt Independent: Credit card lending expanded by 9.2 per cent on the same month a year earlier, up from the rate of 8.9 per cent in August and the fastest since April.
Northern Rock – What Happened to the Customers? New City Agenda: 10 years after the Northern Rock bail-out, thousands of customers remain trapped into paying high mortgage rates. Over the past 10 years these borrowers have paid thousands of pounds more for their mortgages than those at other major lenders.
UK government revives landmark student debt sale FT: The risk for investors is that repayment levels by former students will be lower than expected.
The Freemen of the Land Buzzfeed: A growing group of people are turning up to court and arguing that they aren’t bound by any laws made by Parliament – but the state disagrees.
Take our loan, or lose your home… Mail: Vulnerable property owners face a (costly) offer they can’t refuse – as Support For Mortgage Interest safety net is snatched away
Free-to-use Link ATMs across the UK at risk of being closed down Guardian: Network likely to overhaul 70,000 cash machines after fears that row over membership fees could mean fresh charges
Bookies brace for possible sales hit BBC: The machines generated more than £1.8bn in revenue last year, helping to support growth for bookmakers. But the Department for Digital, Culture, Media and Sport has now launched a 12-week consultation into cutting maximum bets from £100 to either £50, £30, £20 or £2.
- Man’s 15 week wait for new Universal Credit benefit The Press: Peter Clark says he has only been able to eat regularly since lodging his claim in July thanks to York’s food banks and the generosity of fellow parishioners at a York church, and he is now facing eviction from his Holgate flat after being unable to pay the rent.
- Universal credit creates a conveyor belt of desperate people we staff can’t help Guardian: I work on housing benefit for the council and see so many people I cannot help because their path through the benefits system is blocked at every turn
Energy price cap may not be ready for winter 2018, says minister Guardian: Business secretary Greg Clark refuses to commit to a deadline for consumer protection measure under questioning from MPs.