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Energy consumers will get a £30 refund if their supplier does not move them onto their new selected tariff within five calendar days, according to regulations announced through energy watchdog Ofgem, writes Brean Horne.
The update follows an extensive consultation with customer groups and charities announced in September 2023 to “improve the upgrade experience for customers. “
Since 2022, providers have five days to move their customers to a new provider, compared to 21 days previously. Despite the reduced deadlines, there is no legal responsibility to pay the refund unless they have not completed the replacement within 15 days.
Under the new rules, which come into force on 1 April 2024, suppliers will now have to ensure a replenishment of visitors is made within five calendar days, failing which a £30 fine will be applied.
It is the duty of the new supplier to ensure that the replacement is done smoothly and on time. It will be up to him to pay the refund if necessary.
The new five-day switching requirement does not affect the statutory 14-day cooling-off period that consumers are entitled to when they join a new provider. This way, the visitor will have a chance to change their mind.
The number of consumers switching energy suppliers at the end of 2023 increased by 9. 3% through October 2023. This recent figure is almost 3 times higher than in 2022, when a lack of competitive price lists due to high fuel costs in wholesale markets led to a shift towards an almost complete shutdown.
Ofgem expects rate adjustments to continue to increase in the coming months thanks to market stability. Ofgem’s value cap (the amount an average family would have to pay for fuel and electricity for a year) will rise from £1,928 to around £1,620 on April 1.
Melissa Giordano of Ofgem said: “Customers who see better energy deals on the market or enjoy poor service want to vote with their feet and transfer energy suppliers quickly.
“As a regulator, we have already reduced the time it takes for visitors to transfer a visitor by two thirds, to just five consecutive days. We are now going a step further by requiring anyone who fails to meet this deadline to pay £30 to the relevant visitor .
“We are already seeing an increase in degrees compared to last year, and this new measure, welcomed by leading charities, will allow consumers to cover a greater share of their energy expenses this winter and beyond. “
The government must provide more help for people to transition to electric vehicles (EVs) if it wants to hit its net zero targets for 2050, according to the Environment and Climate Change Committee in the House of Lords.
The cross-party group of peers says progress on the transition from petrol and diesel to battery-powered vehicles is not happening fast enough. It is calling for targeted grants to help people afford EVs.
EVs currently make up only around 3% of all vehicles on UK roads. New EVs are more expensive than new internal combustion engine (ICE) vehicles, while charging points are not nearly as abundant as fossil fuel stations.
The government has pledged to end the sale of new petrol and diesel cars by 2035. It also passed the zero-emission vehicle mandate in December, requiring automakers to sell an increasing proportion of their total sales as electric cars for the rest of this decade. .
However, Prime Minister Rishi Sunak said the UK needed “more time to prepare” for the transition. But the ECCC say the government will have to publish a roadmap to 2035 setting out the steps it will take to achieve its ambitions.
As well as recommending grants for EV buyers, the committee wants to:
Baroness Parminter, chair of the Committee, said: “The evidence we have obtained shows that the government wants to do more (and temporarily) to inspire others to adopt electric vehicles. If they don’t follow our recommendations, the UK won’t reap the significant benefits of improved air quality and will fall behind in the fight against climate change.
The cost of car insurance was 12% higher in the final three months of 2023 than the preceding quarter.
The British Insurers Association’s motor insurance premium tracker found that the average premium paid for personal motor insurance was £627, up from £562 in the July-September 2023 period.
This put the Q4 2023 average premium at 34% higher than in Q4 2022, when it was £470. When looking at annual averages, motor premiums were 25% more expensive in 2023 than in 2022 (£543 vs £434).
The ABI says the cost of repairs is the main factor behind the increases, pointing to a mixture of higher labour and energy bills and also the fact that vehicles are becoming more sophisticated, particularly EVs, requiring ever more specialist expertise to repair.
Premiums have also risen because longer repair times are increasing the cost of replacing borrowed cars. Higher rates for new cars due to cancellations and reimbursement of stolen cars also contributed to the rising costs.
Mervyn Skeet at the ABI said: “We’re acutely aware of the impact that rising motor insurance premiums continue to have on motorists. Rising repair costs and other factors outside of insurers’ control mean there is no single action that could bring down premiums. However, we are determined to do all we can to put the brake on.
“We are working with our members to understand what actions can be taken to help motorists manage costs.”
Broadband providers and mobile phone network providers are preparing to clobber their customers with annual inflation-linked price hikes in April.
Most networks that increase their costs arise from a figure that combines December’s Consumer Price Index (CPI) or January’s Retail Price Index (CPI) figure plus a typical rate of 3. 9%.
With CPI inflation running at 4% last month, that means millions of consumers at BT, EE, Vodafone and Three (all of whom use the CPI figure) could see their spending at 7. 9%.
Ofcom, the industry regulator, will ban companies from increasing their customers’ spending in line with inflation, which it claims would cause “harm to consumers”.
The watchdog introduced a consultation on the removal of the increases in December, saying that other people who sign a phone, broadband or pay-TV contract have “clarity and certainty of what they will have to pay for the duration of the contract”.
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 wants operators to tell prospective customers how much their bills will go up each 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 was the most complained-about 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 involving 100,000 customers, more than double the industry average of 15. Almost a proportion (46%) of the court cases were about how the company dealt with court cases, while the 20% were about billing, prices, 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 television, Virgin won almost three times the average number of lawsuits in the sector, 20 per 100,000 consumers (the average is seven).
Ofcom says Virgin Media’s performance is likely the result of its decision to launch an investigation into customers’ difficulties cancelling contracts, and the way the firm handles complaints. The regulator believes this may have prompted more customers to complains.
Fergal Farragher, Ofcom’s Director of Consumer Protection, said: “We recognise the effect of our research on Virgin Media’s court case figures for this quarter, but we are also aware that our research was based in part on court cases that consumers had already filed about Virgin Media’s services.
A spokesperson for Virgin Media said: “We accept that the rise in complaints in the third quarter falls far short of 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 rankings for mobile phone court cases, with six court cases per 100,000 consumers, double the industry average of three. The court cases here were about service and source (placing consumers into your network), as well as difficulties in 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 by 5% on January 1, reaching £1,928 for the average household, but analysts at Cornwall Insight say the cap will fall to £1,620 from April 1, 2024, representing a potential saving of £308 a year.
It expects to fall back to £1,497 a year in July before rising to £1,541 in October.
The cap is changed each quarter to reflect movements in wholesale prices, which have fallen since November thanks to higher-than-expected European gas stocks and benign global supply conditions.
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 expenditures have proved premature, and families can breathe a sigh of relief knowing that costs are expected to fall 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 [in early 2021, the price cap was less than £1,300]. Changes in where and how Europe gets its fuel and electricity, as well as continued market jitters over geopolitical events, mean that we will most likely still face prices several hundred euros higher than the old averages for some time, potentially the new general for household power 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 be required to report changes to their petrol and diesel prices within 30 minutes, according to the government’s proposals for Pumpwatch price tracking, writes Mark Hooson.
The Pumpwatch program, which is now being made available to the industry for consultation, aims to make it easier for motorists to find the cheapest fuel in a database of parking prices in near real-time.
The Department of Energy Security and Net Zero estimates that consumers can save just 3p per litre of petrol or diesel by using mobile apps, online maps, comparison sites and car devices that will be available once the database is live. run.
A 2023 report by the Competition and Markets Authority found that some fuel shops had overcharged drivers by up to 6p per litre by failing to pass on falling oil prices, earning an additional £900 million in 2022.
Edmund King OBE, president of the Automobile Association, said: “The brazen price disparity of sometimes 10p a litre or more between neighbouring towns had to end.
“Increasing profits while maintaining savings from lower fuel prices, while consumers, businesses, and inflation are denied relief is simply unforgivable. “
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 litre per week between November 13 and December 25.
Claire Coutinho, MP and Secretary for Energy Security, said: “We require stores to share live 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.
“Sadly, there have been far too many occasions where drivers have lost out at the pumps when wholesale prices have fallen significantly and those reductions haven’t been passed on quickly enough or fully enough by retailers.”
Drivers who used car finance offers, such as loans and rental contracts before January 28, 2021, may be entitled to a refund if an investigation filed by the Financial Conduct Authority (FCA) shows they were charged interest too high, Brean Horne writes.
Before the FCA banned this practice and it 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, known as a discretionary commission arrangement.
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, executive director of consumers and competition at the FCA, said: “We are taking a closer look at historical discretionary commission arrangements in the motor finance market following a high number of complaints from customers, which are being rejected by firms.
“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 finance technique is compatible with scrap metal, so the FCA’s call for transparent disclosure, innovations in affordability testing and a guilty credit culture sends a red flag. “A strong message to the industry that putting consumers first is critical.
Compensation would possibly be presented to customers who:
The survey will come with customers who:
The FCA has suspended the eight-week deadline for car finance firms to provide a final response to invited court cases won from November 17, 2023 to September 25, 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 time limit for consumers to bring court cases about car finance schemes to the Financial Ombudsman.
Typically, court cases will need to be referred to the FOS within six months of your lender’s final response. However, consumers now have 15 months if they receive a response between July 12, 2023, and November 20, 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, this is not the case. We’ve heard of more than 10,000 people involved paying fees that are too high for their finances, and we know there are many more waiting in the wings.
“We settled two court cases in which we found that the way the commission arrangement between the lender and the auto broker worked unfairly for the consumer. Our decisions may simply pave the way for many other 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 energy market regulator, is allowing three suppliers to restart the force-fitting of prepayment meters in people’s 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.
Approved providers will also be required to provide information to Ofgem to help identify any misuse of prepaid meter installation procedures as temporarily as possible.
Customers can check whether an electricity company can forcibly install prepaid meters on Ofgem’s website. The forced installation of prepaid meters occurs when a visitor with a credit meter incurs large arrears and makes no effort to pay his 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 complete a scale at a wellness site before installing a prepaid meter.
The rules also protect high-risk and vulnerable customers. This means that suppliers won’t be able to force-fit prepayment meters in households with:
Tim Jarvis, Managing Director of Markets at Ofgem, said: “Consumer coverage is our number one priority.
“We’ve made it clear that providers will need to exhaust all other features before contemplating forced installation of a prepaid meter, and consumers can help themselves by contacting their provider as soon as possible if they think they may not be able to pay their bill. . Array so that payment features 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 expenses have risen to £94 for a typical household fuel and electric power since the Ofgem 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 expenses 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 planned increase in the value limit maintained by the energy market regulator, Ofgem. Average expenses will rise by as much as 5%, with a typical family on a dual energy tariff paying arrears via direct debit and their annual prices range 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 remove the price differential for prepay customers, bringing their bills into line with direct debit payers, with the change 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 emerging costs in wholesale energy markets. Analysts expect the cap to fall to around £1,850 in April thanks to declining “future costs” of herbal fuel and seasonal relief in consumption as winter recedes.
It will be shown in mid-February.
The cap for the period from April 2024 to March 2025 will come with an £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 latest increase in the cap point out that inflation in the UK stood at 3.9% in November, according to official figures, with further falls expected.
Ofgem is also called upon to review the permanent tariff regime, which provides for tariffs to be charged for connection to fuel and electricity grids, regardless of actual usage. The regulator is consulting on the long-term tariffs, which do not praise efforts to reduce consumption.
Consumer finances are under serious pressure due to the burden of the crisis, with loan arrears emerging for one quarter in the year to September, writes Jo Thornhill.
The figures come from the Household Finance Review from UK Finance, the trade association for the UK banking industry. Covering the third quarter of this year, they show that 99,480 mortgages are in arrears, up by 24% on 2022’s figure and by 9% on the previous 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, but especially for borrowers with small deposits or home equity. .
He also notes that families continue to use their savings to cover their rising 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.
When it comes to mortgages, UK Finance says the home buying market is incredibly weak in the third quarter, with 26% fewer 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 borrowers in arrears, the mortgage charter introduced in June is providing a range of temporary options, such as switching to an interest-only mortgage or extending the term or their current deal to make the monthly payments more manageable.
Remortgage activity was strong in the third quarter, affordability pressures led more borrowers to engage in product pass-through agreements (new rates introduced through an existing lender) rather than refinance with a new lender. Borrowers don’t want to go through a full affordability assessment for a product transfer agreement.
In 2023, approximately 1. 5 million borrowers canceled fixed-interest rate transactions. Since the beginning of the year, almost nine out of every 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 jumped in the third quarter of this year, as more people saw their fixed rate deal end and remortgaged onto dramatically higher rates – meaning they fell behind on repayments.
“Lately, the loan statutes prevent further accumulation of those arrears. However, those are all transitory measures, and since we don’t expect interest rates to come down anytime soon, those homeowners will have to deal with the truth at the top at some point and many of them will find themselves in default.
“Anyone who is struggling to pay their loan or thinks they will have difficulty in the short or long term, contact your lender as soon as possible. You can get assistance and advice on what to do without affecting your credit report.
Chancellor Jeremy Hunt’s Autumn Statement, delivered today, contained a package of measures designed to revive the economy and reduce the general tax burden ahead of the expected General Election 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 it will reduce NICs in Andrew’s analysis.
Mr Hunt also announced measures to enable businesses to reduced corporation tax liabilities by offsetting captial investment.
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 not mentioned in the speech in the House of Commons, the statement included a number of changes to the Individual Savings Account regime from next year, including the ability to open more than one particular type of ISA in any given tax year. Full details at the end of this piece.
Other measures contained in the statement 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 per hour, which will come into effect in April 2024. Eligibility will also be extended from 23 to 21 years. old.
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 giving individuals a legal right to require a new employer to pay contributions into an existing plan, creating the concept of a ‘single pension pot’ for life.
Universal Credit and other benefits will increase by 6.7% from April, worth around £470 a year. Reforms will be introduced to incentivise those on benefits to join the workforce.
The loan guarantee scheme, under which the government supports lending at 95% loan-to-value ratio for those with a deposit of up to 9. 99%, will run until the end of June 2025. It is expected to be completed by the end of this year.
Local Housing Allowance (LHA): This cap on the benefits renters 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: Compulsory Class 2 National Insurance Contributions are to be abolished from April, with Class 4 contributions paid on earnings between £12,570 and £50,270 to be charged at the reduced rate of 8% (from 9%), again from April.
Small businesses: The government will take action to fight overdue payments, as called for by the Federation of Small Businesses. The freeze on commercial rates has been extended for a year, as has the 75% reduction in commercial rates for businesses in the hospitality sector. retail and recreational 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 corresponds to retail value inflation plus 2%, meaning hand-rolled tobacco will accrue via RPI plus 12%.
Individual Savings Accounts: From 6 April 2024, it will be possible to:
Additionally, it will no longer be necessary to reapply for a dormant ISA (one that hasn’t been touched for two years) if you want to pay into it again, while Innovate Finance ISA holders will be able to invest in Long-Term Asset Funds and open-ended property funds.
What does this mean for you?
Under existing ISA rules, an individual’s annual allocation of £20,000 of an individual’s ISA can be split between other types of ISAs (e. g. £15,000 on a money ISA and £5000 on a share ISA), but only one of the ISA type is allowed. open.
Starting in 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 may become a pivotal win for other people in this scenario and may simply incentivise providers to their service rates.
“It’s also very likely that some consumers will need to combine constant-rate offers and easy-to-access savings to give them greater flexibility in their savings. »
Elsewhere, ISA stock and percentage holders have a little more flexibility when it comes to choosing their investments, with the ability to hold fractional percentages in their account (a fractional percentage is a portion of a single share that is too expensive for many other people). buy). completely).
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 open-ended real estate funds.
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 hard work caused car insurance premiums to rise by 9% in the three months to the end of September and by 29% in the following year, according to the latest figures from the Association of British Insurers, writes 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 cars are more complicated in terms of computer technology, are more expensive, and more difficult to repair. A shortage of skilled technicians also leads to higher costs, as maintenance must be delayed.
Cars being off the road for longer while repairs are made is also bumping up the cost of providing courtesy cars, which again feeds through to 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’s insurance premium.
IPT generated £7.45 billion in tax revenues last year.
Mervyn Skeet, ABI director of general insurance policy, says: “Another quarter of increased motor insurance premiums will be concerning for households who are already grappling with rising costs in other areas.
“Insurers continue to do everything they can to keep auto insurance rates as competitive as possible, despite really significant rate increases beyond 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 coincide with Talk Money Week, which takes place 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 high prevalence of respondents in arrears with their bills, 15% told MaPS they would do nothing if they were heading for financial trouble.
In addition, more than a third of respondents (38%) said they would not touch their creditor if they were behind on a payment, with 20% of this organization feeling too embarrassed to talk about the factor and 15% feeling too embarrassed to talk. refusing to disclose his private situation.
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.
Scammers stole £580 million from UK consumers and businesses in the first six months of 2023, according to data from industry sector 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 just 32% of financial losses, since this category includes a high proportion of lower-value fraud such as purchase scams (where consumers are tricked into buying goods that never arrive).
These scams accounted for £40. 9 million in losses in the first part of 2023, a year-on-year increase of 43%.
Laura Suter, head of personal finance at investment platform AJ Bell, said: “Ultimately, much of this fraud spreads on social media, with the ease of generating accounts and posts meaning scammers can cast their net far wider.
“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 that more people can be targeted. “
App scams in which the victim contacted by phone accounted for 45% of the losses recorded, while they accounted for only 17% of the cases.
Earlier this year, the Financial Conduct Authority completely banned bloodless monetary phone calls, meaning consumers treat any unforeseen monetary phone call as a scam (see article below from Aug. 2).
Criminals who continue to contact consumers by phone sometimes become involved in investment frauds, where victims are persuaded to donate their money to purchase fake or deceptive 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: “So often people feel embarrassed or ashamed of being defrauded and therefore don’t report it, while others assume that nothing can be done to get their money back, so it goes unreported.
“Anyone who has been 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, a little over 18 months since it last put them up.
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). .
He notes in the letter: “Our starting price is incredibly competitive compared to other streamers and at $6. 99 (£5. 77) per month in the US. The U. S. movie, for example, is well below the average value of a single movie ticket. “
Netflix has 4 club groups. In addition to the Basic (which allows one screen) and Premium (4 screens) tiers mentioned above, there is an “ad-supported” tier and a tier, priced at £4. 99 and £10. 99 respectively. These costs do not increase.
The streaming service has added around nine million new subscribers worldwide after banning password sharing among its users earlier this year.
Subscribers during the third quarter of the fiscal year increased 11% year-over-year to 247 million. Shares of the company (NFLX) rose 12% following the announcement. To learn more about investing in Netflix, read our advisor 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 charged £7. 99 for all users. Existing subscribers will upgrade to premium at no additional charge until their subscription renews after December 6.
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 (date of publication of the ’23’ plate), according to figures from the Society of Automobile Manufacturers and Traders (SMMT). ).
Automobile fleet sales were the main contributor to growth, with 143,256 new cars registered. This is an increase of 40. 8% compared to September 2022 figures. The overall percentage of fleets on the market is now 52. 5%.
Private car registrations were up 5.8% year-on-year. With 122,944 new cars registered, it was the best September figure since 2020, but numbers remain 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 the increase in BEV registrations was due to fleet purchases, and personal BEV registrations fell by 14. 3%.
Gasoline vehicle registrations increased by 15% in September (year-on-year) and now represent 38. 7% of the overall market (up from 40. 7% in 2022). Diesel cars fell 4. 2% last month and represent a 3. 6% share of the market. (compared to 4. 6% last year).
The new car market, that of electric cars, has been shaken by the government’s decision to delay for five years, until 2035, the ban on the sale of new cars with internal combustion engines.
Despite this 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, this figure will be 22% and this percentage will increase thereafter.
SMMT chief executive Mike Hawes says the decline in personal EV registrations underlines the importance of offering incentives to motorists: “With tougher EV [sales] targets for brands coming into effect next year, we want to drive the transition, encouraging all motorists to make the change.
“This means adding carrots to the stick – creating private purchase incentives aligned with business benefits, equalising on-street charging VAT with off-street domestic rates and mandating chargepoint rollout in line with how electric vehicle sales are now to be dictated.
“The upcoming autumn declaration is the ideal opportunity to create scenarios that enable zero-emission mobility, in line with our shared ambition of net zero. »
Currently, electrical energy used to qualify an electric vehicle at home is subject to 5% VAT, while energy powered on public roads is subject to 20% VAT.
Disney’s streaming platform, Disney, is following Netflix’s lead with its excellent account sharing system.
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 messages in other countries, including the UK, later in 2023 and 2024.
The ‘House of Mouse’ has started informing Canadian subscribers that their accounts are not to be shared outside of their own households, following a change to the service’s terms and conditions which will take effect from the start of November.
The wording reads: “Unless otherwise permitted by your Service Plan, you may not share your subscription outside of your household. ‘Household’ means the collection of devices associated with your primary personal residence that are used by the individuals who reside therein.”
Like Netflix, Disney+ will monitor how its subscribers use the service and, where it suspects users are sharing their login credentials, will issue warnings. Repeat violations will, according to its new T&Cs, result in accounts being terminated.
The start of the crackdown coincides with the arrival of new Disney subscription levels, adding a less expensive subscription with advertising.
Netflix was the first to hit the market with its crackdown on the exchange in the spring. Although it’s unpopular with users and hoped to provoke a churn, 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 1st, subscribers will have 3 features at their disposal:
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 IVC group in December last year, following the acquisition of 8 independent veterinary companies. In total, IVC has 1,000 enquiries 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 veterinarians about their reports through 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 price a pet owner pays for insurance reflects the cost of vet services where they live among other factors. However, by shopping around pet 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, they will be covered. The charge for 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, state that insurers will be required to charge new and existing consumers the same prices for equivalent coverage.
However, existing Direct Line customers were charged more for renewals than they would have been as new customers.
In a statement, the insurer said: “An error in our implementation of those regulations has meant that our calculation of the equivalent value of new business for some consumers does not comply with the regulations. As a result, those customers paid a higher renewal price than they had. »
The FCA says this is the first time a formal voluntary requirement has been agreed with a firm in relation to its motor and home insurance pricing 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 overcharge.
Russ Mould, investment director at AJ Bell said: “The greater damage to Direct Line from the £30 million cost to cover over-charging customers for insurance products is to its brand and reputation – even if the financial cost will sting too.
“This exacerbates a very complicated era for businesses: inflationary pressures on accounts receivable have helped undermine their reputation as a reliable source of revenue security. “
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 less expensive on average across the UK than first-time buyers’ loan repayments, rents remain more expensive in six regions, including Scotland, the North East, Northern Ireland, the country from Wales, Yorkshire and Humberside, where average home buys tend to be higher. be less loved.
In London, the average price of a home for a first-time client is £522,000, according to Zoopla. If customers have a 15% deposit of around £78,000, this would mean a monthly loan repayment of £2,546 (assuming a loan rate of 6% over a 30-year term). But renting an asset 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 cheaper than buying, but as rental demand has increased, competition for good quality rental homes has pushed rents up. It has meant that average rent has been more expensive than buying a similar property for over a decade in most parts of the country.
Izabella Lubowiecka, senior real estate researcher at Zoopla, says: “It’s a tough asset market for first-time buyers, with high loan rates driving up prices for those looking to climb the ladder. In fact, our studies found that nationally, it’s now less expensive to rent a home than to buy it for the first time since 2010.
“But the picture varies enormously across the country. In large parts of the North and across Scotland and Wales, it’s still more cost-effective to stump up for monthly mortgage repayments than rent.
“We’re seeing first-time buyers become more artistic when they move: they’re looking for other spaces to start their search, they’re looking for more modest properties, or they’re shopping with friends or family.
“We also predict house prices will fall around 5% over the course of 2023, and mortgage rates may have already peaked, which might be the nudge many first-time buyers need to move ahead with their purchase.”
Rising interest rates are pushing more people to move and return to cities, a trend that reverses the trend 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.
In addition, 11% of staff say they have had to leave a rural setting because they may simply not be able to afford living and commuting. Many have reduced their workforce and are now renting homes closer to the city.
Younger people are leading the march, with more than one in five 18- to 24-year-olds saying they have moved from a rural area to the 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 revealed that the average premium between April and June this year was £511, up 7% from last quarter’s figure of £478 and up 21% from the same time last year. This figure is at its highest point since ABI began collecting this knowledge in 2012.
The average value paid by those who renewed their cover rose £36 from last quarter, to £471, while the average premium for a new policy rose £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 car insurers paid out £2. 4 billion in claims in the first quarter of this year, which is a 14% increase on the first quarter of 2022.
The vehicle maintenance rate has soared 33% over the year from the first quarter of 2022 to £1. 5 billion, the highest figure since ABI began recording this data in 2013.
Replacement parts for many popular cars have also increased in cost between 12 – 21% over the past year, while labour costs have reportedly risen by up to 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 determined to ensure that motor insurance remains as competitively priced as possible, but this has become increasingly challenging, given the continued rising costs that they are facing.
“We invite anyone involved in paying for their insurance to contact their auto insurer to see what features might be available. And despite the cost pressures, it can still be cost-effective to shop around to find the policy that best fits your needs. wishes at the highest competitive price.
The government is consulting on plans to ban direct phone calls that provide monetary products, writes Bethany Garner.
The goal is to ensure that any bloodless call about a monetary topic automatically becomes a scam.
The plans – first trailed on 3 May (see dated story below) – are designed to tackle scammers who contact victims out of the blue to offer fake investment opportunities or other non-existant or fraudulent financial services.
Cold calling related to pensions has been banned since 2019, but these new measures will affect all monetary products, adding insurance, cryptocurrencies and investments.
According to City of London Police figures, fraudulent investment schemes cost 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 cold calling for all consumer financial services and products, so the public can be sure that it’s not a legitimate firm if they get a call about a financial product out of the blue 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.
In those scams, victims are tricked into sending cash directly to a scammer, possibly posing as a valid corporate or government agency. The regulation will come into force in 2024 and will 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 and anti-fraud campaigner, said: “80 per cent of frauds are cyber and start with fraudulent social media posts, fraudulent emails or misleading advertising, which makes engagement with the tech sector especially 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. That’s why it’s vital, whatever the government does, that the British people remain calm. “
Selby says other people simply 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 registered with the Financial Services Authority.
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.
FCA Financial Lives’ most recent survey of more than 19,000 respondents indicates that 41% of adults in the UK (or 21. 8 million more people) owned an investment product in May 2022, an increase of almost two million (37%) in two years. earlier.
The regulator says direct holdings of shares, held by 21% of the UK population and 11. 3 million adults, and shares and ISAs (individual savings accounts), held by 17% of the population, representing 9. 1 million adults, continued to be held. Maximum investment products popular in 2022 “so far”.
He added that the total number of adult stock and stock owners 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 over one and a half times more likely to invest in May 2022 compared with women. It added that investing is closely related to age and income, with older adults and adults on high household incomes more likely to hold 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, i. e. more young men, owning investment products between 2020 and 2022. The proportions of 18-24-year-olds and 25-34-year-olds holding investment products 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 take threats when investing, compared to four percent of new investors over the age of 55 and 12 percent of all investors.
More than a portion (56%) of young first-time investors reported having one or more high-risk investment products. For the most part, these were crypto assets, with 46% of new young investors reporting owning them.
The FCA said that owning high-risk investment products had gained popularity during the two years in question, with 8% (or 4. 1 million) of the adult population owning cryptocurrencies, peer-to-peer lending, or state-of-the-art financial ISAs. and invest-based crowdfunding or a combination of both, 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 latest Financial Lives research also found that 7.4 million people attempted, unsuccessfully, to contact one or more of their financial services providers in the 12 months up to May 2022.
It also said that less than a fraction of UK adults, or 21. 9 million people, have confidence in the UK money sector, and just over a third (36%) believe that major money companies are fair and transparent in how 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 with the CEOs of Asda, Tesco, Morrisons and Sainsbury’s, as well as the bosses of BP, Shell and Esso, Energy Secretary Grant Shapps called on businesses to avoid 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’s no excuse and the government is saying enough is enough. We’ve demanded an immediate end to overcharging, and I told bosses they must hand over their price data. This will mean that you can find the best deal, and you can be alerted if anyone tries to rip you off again.”
While Shapps did not quantify the reason for the overcharging or specify what a fair price might be, a Competition and Markets Authority (CMA) report published earlier this month found that some stores were overcharging drivers by up to 6 pence a 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 plan suggest it could lead to motorists converging on outlets with the cheapest prices, leading to queues and congestion.
Bank of England Governor Andrew Bailey has also pointed out that high gasoline costs are 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.
The inflation rate for June will be published by the Office for National Statistics this Wednesday. Expectations are that it could 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 report from the Resolution Foundation indicates that total household wealth has fallen to £2. 1 trillion over the past year due to rising interest rates – the biggest drop in percentage of GDP since World War II.
In Britain, renters are more likely to report an increase in the cost of living than loan holders, according to the Office for National Statistics (ONS), writes Bethany Garner.
The latest official cost of living data, pooled between February and May this year, revealed that, of those renting, more than two-in-five (42%) reported a rise in costs over the last six months, compared to 32% of mortgage holders.
This is despite successive bank rate hikes that raised the cost of mortgages for variable-rate borrowers, and new two-year constant-rate deals that achieved average prices of nearly 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 pensions consultancy Broadstone, commented: “Today’s data not only reveals that a far higher proportion of renters are struggling to meet their monthly payments but are also significantly more likely to face financial 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 rose approximately 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.
Advocates of electric vehicles are calling on the government to slash VAT on public charging from 20% to 5% so that it matches the rate paid by those who can charge their vehicle 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), a year-on-year increase of 40% and representing around 12% of total registrations. These cars are powered by an internal combustion engine and an engine.
Around 13,000 drivers registered a plug-in hybrid (PHEV), accounting for 7% of all June registrations and a year-on-year increase of 66%. PHEVs are HEVs which can be charged from an external source of electricity.
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 the SMMT, said: “The new car market is growing back and growing green, as the attractions of electric cars become apparent to more drivers. But meeting our climate goals means we have 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 are slightly below the 22% battery electric vehicle registration figure required for the zero-emission vehicle mandate, the BEV market share has reached record levels of adoption. However, there is still room for improvement as we get past six months. Countdown mark.
Drivers were overcharged for fuel by around £1bn last year, according to new official figures announced alongside plans to force service stations to make their costs public.
The UK’s Competition and Markets Authority (CMA) has found that drivers have been harmed by the festival’s weakening of parking spaces since 2019, specifically among supermarkets; He admits that those stores are still the cheapest places to refuel.
CMA found that the highest profit margins charge drivers an extra 6p per litre between 2019 and 2022. In 2022 alone, this amounted to £900 million.
Sarah Cardell, director of the CMA, said: “Competition at the pump is not working so well and anything you want to temporarily replace to deal 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 agreed to pass a law that will require stores to publish their costs to offer the service. The CMA estimates that the scheme could save the driver of a typical family car £4. 50 per tank by travelling to stations just five minutes away.
MP Energy Security Secretary Grant Shapps said: “Some fuel shops are motorcyclists like cash cows – they increased their costs when fuel costs skyrocketed, but failed to pass on the savings now that costs have come down.
“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. In the meantime, the CMA is creating a voluntary program that encourages workshops to percentages 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 price report, the AA engine company found that the price of unleaded petrol 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, the price of diesel fell from 161. 1 p per litre to 153. 9 p per litre.
The study found that the South East and London paid the prices for petrol and diesel respectively, while drivers in Northern Ireland paid the lowest prices for both.
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 needs regulators to “work at a steady pace for markets to function 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 ensure that banks pass on higher interest rates to savers and do not maintain a disproportionately high margin between the rates to charge borrowers and what they pay on savings accounts.
Mr Hunt said: “I am pleased that we have reached an agreement with regulators to act urgently in spaces where consumers want the maximum to ensure they are treated fairly. Businesses also want to play their part and I will be keeping a close eye on their progress.
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.
This is because their mortgage payments, when they remortgage in the coming months, will increase, on average by £280 a month. Borrowers aged between 30 and 39 will see increases of £360 a 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.
The government has so far refused to offer assistance to borrowers in the form of a relief package and has asked lenders to take a comprehensive approach and offer assistance to potentially struggling borrowers.
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 more typical borrowers on 25-year repayment mortgages will be paying at mortgage rates on competitive two-year fixed rate deals.
A borrower with a £150,000 repayment mortgage (with 10% equity in their property) coming to the end of a two-year fixed rate now is likely to have a pay rate of around 2.5% and monthly payments 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 face new monthly bills around £488 more than before, or £5,856 more per year.
A homeowner with a £300,000 mortgage and 40% equity in their property currently on a two-year fixed rate paying 2.5%, could get a new two-year fix today at around 4.8%. This borrower can access slightly lower fixed rates due to having a bigger portion of equity in their 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 drawdown 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 also keep in mind that deferring interest, postponing payments, or extending the term of a loan will increase the total amount to be paid.
The cost of renting space in the UK has soared by 10. 4% in the 12 months to April: a typical tenant starting a new lease now has to shell out £1,126 a month, or £928 if moving to 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 renters’ pre-tax wages, up from 27% over the past 10 years.
The additional pressure on renters’ monthly budgets adds to already overwhelming family and food expenses, as annual inflation in the UK 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 claims that a “chronic imbalance between demand and demand” is to blame for emerging rentals, as landlords are forced to sell or increase 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 a 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 an increase in the supply of rental housing, the market is expected to show signs of correction, Zoopla said. Rent inflation is expected to slow to around 8% through the end of the year, still higher than wages. 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, a property agent in north London, is optimistic: “The recent volatility in the loan and asset markets makes these figures particularly attractive. While comparisons with the busiest time 12 months ago could be misleading, they nevertheless show that buyers are moving cautiously, despite an improvement in trading floor activity since the beginning of the year.
“Provided mortgage deals are left on the table and interest rates don’t keep rising, then stability will return as the market is still being supported by strong employment numbers and better-than-expected salaries.”You can catch up on the latest mortgage 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 2006 and 2016 era was a transitional era that coincided with the transition from an old public pension plan to the existing one. The government had first set a deadline of July 31, 2023 for those who wanted to increase their contributions in the most sensible way. during those years.
NCIs are a way to tax the self-employed’s source of income and profits. Paying is a legal responsibility and whoever does so is 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 a 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 need at least 10 years of NIC to be eligible for any type of pension payment and at least 35 years to get the maximum state pension amount.
The government said the move means that “people have more time to properly consider whether paying voluntary contributions is right for them and ensures no one need miss out on the possibility of boosting their state pension entitlements.”
But the government added that the payment of voluntary contributions does not increase state pension entitlements: “Before starting the process, other eligible individuals with gaps in their April 2006 NI record deserve to check whether they would gain benefits from filling those gaps. “
Alice Hayne, private finance analyst at Bestinvest, said: “The good news is that Brits with holes in their national insurance record no longer want to panic at the thought of running out of time to plug a hole and get the source of full retirement income to which you are entitled. Buying back lost years is a wonderful way to increase your retirement income source, and this window of opportunity to roll back contributions to 2006 is something you shouldn’t ignore.
“The extension of the deadline will not only give the government time to catch up on the volume of applications, but it will also allow more taxpayers to know if they would gain advantages by catching up on the missing years. The additional time will also give the government, those who take advantage of a deficit, the opportunity to build up a budget to cover the cost, which can be in the thousands, depending on the number of years missing.
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 Home Finance Review for the first quarter of the year found that mortgages for first-time and re-movers have fallen to their lowest point since the early months of the Covid 19 pandemic in 2020.
Excluding those months during lockdown when the housing market was effectively closed, first-time buyer numbers are at their lowest since 2015.
As we reported this week, the number of people opting for a loan with a term of 35 years or more (increasing the loan term can make it more affordable) is also at an all-time high of 19%. .
For the first time in 15 years, household savings contracted year-on-year, and the total price of cash deposited in instant accounts fell 4% to £867 billion, from £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 getting into difficulty with their mortgage repayments rose in the first few months of the year following a rise in Q4 of 2022. There were 2,530 new cases of arrears in the first three months of 2023, up from 1,050 in the final quarter of 2022. It brings total arrears cases 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.
There were 1250 loan holdings recorded in the first 3 months of 2023, 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.
“Some consumers cover the additional prices with savings, perhaps accrued from the pandemic. »
New car sales to private buyers fell in May, with fleet sales alone helping the industry achieve a tenth consecutive month of growth.
Official figures from the Society of Motor Manufacturers and Traders (SMMT) showed that May’s 65,932 private registrations marked a 0.5% drop compared to the same period last year.
Meanwhile, the figure of 76,207 new fleet registrations in the month represents an increase of more than 20,000 compared 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 tenth month of growth, it is lower than 2021 figures. In fact, in pandemic-hit May 2020, 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-seller lists in May, maintaining its position as the vehicle with the highest number of registrations so far this year.
Mike Hawes, chief executive of SMMT, said: “After the complicated Covid-related origin issues of recent years, it is smart to see the new car market maintaining its upward trend. “
The figures also show a continued decline in diesel vehicle sales, with a year-on-year drop of about a quarter 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 inauguration of a mobile vehicle production plant in northern France, Mercedes CEO Ola Källenius called for the arrival of the price lists to be delayed until 2027.
Customers are not getting the financial products they want when they buy groceries online, according to a report that says up to thirteen million “vulnerable” people have been affected in the last year, writes Candiece Cyrus.
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. where 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 in financial distress or are in monetary difficulty, as well as those who have experienced moments of vulnerability 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 in danger of going into debt, 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 on debt in the event of a default.
Vulnerable customers who applied for products such as current accounts, savings accounts and insurance were more likely to get what they needed than those who started investing or took out credit.
More than 60% of customers 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 an overdraft credit card, also didn’t get the product they needed.
At the same time, only about 48% of vulnerable customers who have re-mortgaged feel they got the product they needed. This figure rises to 67% for vulnerable consumers who have taken out a new mortgage.
Vulnerable consumers who didn’t get what they needed used channels of choice (such as calling the supplier or visiting a branch), tried to get a supplier, or “gave up” on looking for 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 intelligent outcomes” for their clients, especially those who are vulnerable.
According to a new study, there are more stolen payment card hotspots on the dark web in Britain than in any other European country, and they are advertised for an average of just £4. 61.
VPN provider NordVPN says the UK is third after the US. The U. S. and India have been arrested on stolen payment data, after analyzing six million stolen top points illegally sold on dark internet marketplaces.
VPN providers showed that the UK had a total of 164,143 payment card details 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 national insurance numbers.
Adrianus Warmenhoven, cybersecurity expert at NordVPN, said: “Discovered card numbers are just the tip of the iceberg when it comes to payment fraud. This is a crime with a massive ripple effect and the up-selling of data makes it much more damaging as an experienced criminal can use it to get more details.
Selling at an average of £4. 61 according to the listing, the selling price of UK data is 18% less expensive than the global average (£5. 61) and part of the price of Danish data, the most expensive data to sell, at £9. 23.
Despite higher-than-average numbers of stolen data, however, UK victims are less at risk than those in other countries, according to NordVPN.
Its card fraud risk index measures the likelihood that payment details will be sold with other credentials. The UK ranks 22nd in the index, far behind the countries most at risk: Malta, New Zealand and Australia.
The VPN provider advises cardholders to protect themselves online using strong passwords made up of a combination of uppercase and lowercase 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.
Most of the data tested through NordVPN wasn’t stolen by employing brute-force techniques, i. e. , through computer systems that try to guess thousands, if not millions, of imaginable combinations of a card number until they manage to guess the right 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. “
Likewise, you never download files attached to an email that you weren’t expecting or from a sender you don’t know. The same goes for websites, you want to check that they are authentic and trustworthy before downloading anything.
The value of food continues to rise to near-record levels, despite the decline in headline customer value inflation announced today through 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 food cost accumulation rate (19. 1%) is just below the 45-year high of 19. 2. % achieved in March.
Commenting on the figures, the Chancellor, Jeremy Hunt, said food prices remained ‘worryingly high’.
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 fresh and vegetable products, remains stubbornly high.
A basket of 10 household foods, plus eggs, milk, cheese, bread, bananas, pasta and canned fish, now has an average price 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 Purchase Price Comparison Tool, shown below, shows the increase in prices of individual products over the last year.
It’s just food prices that remain incredibly high. While the value accumulation rate of 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 liquid (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 due 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, seeks tactics for reform and 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 four years, with savers receiving a 50% government bonus, with payments paid in the second and fourth years. A saver making the maximum deposit each month would save £2,400 over four years. This would attract the maximum £1,200 bonus.
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 makes adjustments after opening the account and no longer has any of the eligible benefits, they can continue to save in the account and get the bonus. Learn more and apply on the government’s website.
A million households gave up their broadband in the last year because they couldn’t afford it, according to new research.
Citizens Advice found that other people claiming Universal Credit (UC) were the most affected by emerging expenses and were six times more likely to give up their broadband access than non-claimants. The charity also found that UC recipients were four times more likely to give up their broadband access. to cover your broadband expenses.
Inflation-linked annual price hikes have seen some telecoms providers put their existing customers’ bills up by as much as 14.4% – typically adding 3 or 4% to the current rate of the consumer price index (CPI) or retail price index (RPI) each 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 is clear that Ofcom wants to set businesses on fire.
Last month the telecoms industry regulator Ofcom said that 95% of 4.3 million eligible UK households are not signed up for a social tariff. To see a list of the social broadband tariffs currently available, 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 (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.
That’s an increase of 1. 4 million since May 2022, according to data from the Financial Conduct Authority (FCA), the U. K. ‘s monetary watchdog.
As living expenses continue to rise, the FCA also found that 10.9 million adults are struggling to keep up with bills and credit repayments – up from 7.8 million 12 months earlier.
Financial pressures are having a knock-on effect on mental health, with almost half UK adults (28.4 million) saying they felt more anxious in January 2023 than they did six months earlier, due to rising living costs.
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 is also clamping down on lenders that do not offer customers appropriate support. The FCA recently told 32 lenders to change the way they treat customers, and secured £29 million in compensation for 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 12 months to April 2023, 29% of UK adults say they used their savings to cover their living costs, according to a study commissioned through 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 to see their situation worsen by 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: “While much of the pressure on costs at the pump is due to global factors, adding Russia’s invasion of Ukraine, we have uncovered evidence to suggest that the festival’s weakening in retail is contributing to rising costs. “for drivers at the pump. “
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% feel better.
This is despite the fact that this age organisation predicts that their situation will be £367 worse 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.
“However, the outlook is more positive than at the beginning of the year, and consumers appear to be highly resilient in the face of challenging economic conditions. “
Dipping into savings is the only step Americans take to make ends meet.
More than a fraction of respondents (55%) told LifeSearch they used heating less to save money, while another 25% had reduced their use of appliances and 11% were behind on a major purchase, such as a car.
Adults over 55 were more likely to use heat than other age groups, with 62% reporting doing so in the past 12 months.
Elsewhere, 11% of adults have reviewed home and car insurance policies in search of a cheaper deal, and 25% have sold items they no longer want or need.
A proportion of respondents (17%) admitted to cooking less hot food to cut costs, and 3% said they had turned to a food bank in the past 12 months.
About one in three adults (30%) expect this financial pressure to have a negative effect on their intellectual health.
However, for some, cutting daily expenses is not 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 34 and older said they gambled more in an effort to increase their income.
LifeSearch’s Emma Walker said: “After the record lows we saw in the index at the height of the pandemic, we saw some optimism last year when 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 Businesses (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 in the latter part of the year. 2022. writes Candiece Cyrus.
It says failure to alleviate business expenses will feed through to higher household bills and result in business failures.
More than 700,000 small businesses concluded their energy contracts between July 1 and December 31 last year, and 13% of this organization (93,000) is now facing the need to downsize, restructure or close their doors because they can’t keep up with their energy. costs. Array says the FSB.
This follows government relief for businesses last month, with the Energy Bill Relief Plan replaced by the Energy Bill Reduction Plan (see March 30 update).
The FSB says 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 were paying 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 companies 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 original constant rate and the existing lowest wholesale rate.
Tina McKenzie at FSB said: “It’s disheartening to see a significant proportion of small firms could be forced to close, downsize or radically restructure their businesses just when we look to grow our economy. Our community shrank by 500,000 small businesses over the two years of COVID; we shouldn’t now be adding any more to that gruesome tally.
“The least energy suppliers should do is to allow small businesses who signed up to fixed tariffs last year to ‘blend and extend’ their energy contracts, so that their bills are closer to current market rates. We’d also like to see the Government and Ofgem support this initiative.”
The average value of a used car reached £17,843 in April, according to Auto Trader’s 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 increases in value, but all vehicle types are increasing in value.
Average prices of used electric vehicles (EVs) in April this year were 18.1% lower than in April 2022, at £31,517. Last month also marked the fourth consecutive month in which average EV prices 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.
With car insurance premiums dictated, in part, by the value of a vehicle and the cost of parts and repairs, the rising average price of a used car is having a knock-on 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 investigation, the ABI said its members (more than 90% of the UK insurance industry) blamed painting and emerging costs, up to nearly 16%.
It says that 40% of all repaired work is affected by partial delays and that the average value of used cars increased by 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.
“However, like many other industries, insurers continue to face higher costs, such as more expensive raw materials, which are difficult 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, where electric vehicles account for about one in six new registrations (15%).
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.
Registrations of battery electric vehicles (BEV) increased by more than a fraction (59. 1%) in April, up to 20,522 units. Plug-in hybrid cars (PHEV) increased by up to 33. 3% with 8,595 registrations. Hybrid electric cars (HEV) increased by 7. 7% to 15,026 registrations.
The SMMT has revised upwards its forecast for the quarter, expecting higher-than-expected records due to less tension in the supply chains. This is the first time 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.
Under the UK-EU Trade and Cooperation Agreement (ATT), the UK can sell electric cars in Europe without having to pay customs duties, as long as no more than 70% of the parts in an electric battery come from abroad. UK, but from early 2024, the threshold will increase to 40%.
At that point, any vehicle with a battery comprised of more than 40% imported components will attract a 10% levy when sold into Europe. This could deter manufacturers from setting up or remaining in the UK.
Although the replacement is expected to be done 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 Trade and Business said: “We are aware that some industries in the UK and Europe are concerned about the 2024 regulations and we continue to work intensively with the industry to understand and mitigate the impact of external factors, such as Covid-19 and the global shortage of semiconductor chips for the production of electric cars and batteries.
Hugo Griffiths, a spokesperson for Carwow, said: “Of course, there are similar issues to the source of EV battery components, and the EU and UK have battery production capacities from other countries, and this factor needs to be addressed.
“But to insist that from next year only 40 per cent, rather than 70 per cent, of an electric vehicle’s battery parts will be able to come from outside the UK or EU before new price lists come into force is purely an artificial legislative problem: It has been invented through policymakers, so it will have to be resolved through 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.
This figure is also higher than the £1. 5 billion announced in February, making it the sixth consecutive monthly figure.
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 ratio increased slightly, with percentage issuances rising from 0. 18 to its all-time high of 20. 29%.
According to the report, bank overdraft interest rates fell by 0. 27 percentage points to 21. 07%. The new loan rate fell 0. 36 percentage points to 7. 79%.
Mortgage approvals for home purchases rose especially in March, according to Bank data, reaching 52,000 from 44,100 in February. However, the numbers remain modest to the levels seen in March 2022, when loan 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 simple access and 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 pension-related bloodless 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 individuals around £7 billion each year.
Once the new regulations go into effect, consumers will automatically assume that any unsolicited calls about monetary products are a scam.
The new regulations will also ban “simulation farms,” where scammers send fraudulent text messages to thousands of people at once, and prevent scammers from impersonating the phone numbers of valid 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 technology corporations to report online fraud.
Tom Selby, head of Pensions Policy at AJ Bell, said: “Financial scams are a nightmare for society and ruin lives, so any measures to steer more consumers away from other types of fraud are 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 liability for web giants like Google on fraudulent paid advertising, which the Online Safety Bill could incorporate into UK law. “
While these plans are widely welcomed, the government has faced criticism for not acting sooner.
Rocío Concha at Client Organization Which said: “The fight against fraud has progressed too slowly in recent years and, in particular, more measures are needed for giant generation platforms to take serious action against fraud. »
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. “
Rising costs in retail establishments appear to have peaked, but food is still becoming more expensive, according to figures released today 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 cost of fresh food and ambient food, which can be stored at room temperature, continued to accelerate in the 12 months to April by 17.8% and 12.9% respectively (17% and 12.5% in March).
The BRC said price pressures along the origin chain, more expensive food due to higher packaging prices and higher value of coffee beans were the main factors driving the increase in food value.
Experts say the overall stagnation in store costs is due to “spring discounts” in the apparel, 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 are starting to see the value of food fall in the coming months as wholesale price discounts and other tariff pressures take hold. »
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 complicated self-driving cars is expected to protect the statistics, which could lead to an overall relief of road premiums. Auto insurance.
Drivers of the Ford Mustang Mach-E model, which costs from £50,830, can use what the manufacturer calls ‘hands-off, eyes-on’ technology. It has been government-approved for driving on 2,300 miles (3,700km) of motorways in England, Scotland and Wales, which have been designated as ‘Blue Zones’.
The first few days of using BlueCruise are included in the purchase of the vehicle. After that, drivers can subscribe to use it for £17. 99 per month.
The “Level 2 Advanced Hands-Free Driver Assistance System” is based on Level 1 cruise technology, which is popular in a growing number of cars, and adjusts the vehicle’s throttle to a fast speed, allowing the driver to take their foot off 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 4, high automation, includes vehicles where a wheel and pedals are not installed, such as a driverless taxi, while Level 5, full automation, offers the same features as Level 4, but everywhere and in all conditions. Both 4 and 5 do not require any form of manual driving.
BlueCruise uses cameras and radar to monitor the environment, adding traffic, road markings, speed symptoms, and the position and speed of other vehicles, to allow drivers to take their hands off the 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 ultimately slowing down 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 motive power assistance systems make driving smoother and easier, but they can also make roads safer by reducing the threat of motive power errors. “
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 for which the driver or automation formula is at fault.
Drivers will need 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 in the market remained about 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 in the wake of the pandemic, March marked the eighth consecutive month of expansion in the automotive market, with approximately 288,000 sets delivered to approximately 243,400 last year. The first 3 months of 2023 were the most powerful for the market. since 2019, with just under 500,000 new cars registered.
Plug-in hybrid (PHEV) registrations rose by 11.8%, from just over 16,000 registrations last year to almost 18,000 this year. Plug-in registrations overall – the total of BEV and PHEV registrations – comprised 22.4% of the market – a slight fall on last year.
This follows the closure of the government’s matching 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 propulsion systems powered by batteries and internal combustion engines.
Year-to-date in 2023, BEVs accounted for over 76,000 sales compared to over 64,100 in the period between January and March 2022, showing growth of 18.8%. PHEVs accounted for over 31,700 sales, and HEVs over 65,800 sales, seeing growth of 6.7% and 36.9% respectively compared to 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 only make the switch if they have the confidence they can charge whenever and wherever they need.
“The good fortune of the mandate will depend not only on the availability of the products, but also on the infrastructure providers who will invest in the public charging network across the UK. “
Mike Hawes, chief executive of SMMT, said: “The new month of March sets the tone for the year, so this functionality will bring greater confidence to the industry and consumers.
“With eight consecutive months of growth, the automotive industry is recovering, bucking wider trends and supporting economic growth. The best month ever for zero emission vehicles is reflective of increased consumer choice and improved availability but if EV market ambitions – and regulation – are to be met, infrastructure investment must 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 was recorded at 15% in March – up from 14.5% in February. It is the highest level seen since the BRC started collecting the data for its Shop Price Index in 2005.
The index is a measure of the cost of 500 of the most commonly bought items – including food, drink and non food goods, such as clothing and electrical appliances.
Non-food inflation rose to 5. 7% from 5. 3% over the same period and headline commercial 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 prices also rose as poor harvests in Europe and North Africa worsened availability, and imports became more expensive due to the weakening pound. Some sweeter deals were available in non-food, as retailers offered discounts on home entertainment goods and electrical appliances.
“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”
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 price of food and non-alcoholic drinks rose at their fastest rate in 45 years over this period, with the largest contributor to the increases being fresh 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 are still seeing the effect of major power values and the war in Ukraine on food prices, as well as more pressing source issues, such as the recent shortage of salads or eggs. All of this drives up costs, especially for many fundamental needs. Now it looks like we’re going to have a more expensive Easter, as sugar prices have increased the value of Easter treats.
Suter added that the hardest hit are low-income families, who spend more of their overall source of income on food.
Nearly a share of families (47 percent) say they are worried about paying their loan or rent next year, according to new data from financial provider Legal
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 response 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
New research from Nationwide Building Society has revealed that almost four-in-10 (38%) consumers have used credit cards in the last six months to tide them over until payday or benefits payment, 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.
Supermarkets (29%), restaurants, food and beverages (14%), electric vehicle refueling/charging (13%), utilities (12%) and holidays (11%) were the most sensitive spending spaces occupied through auto loans.
Nationwide’s spending report, published alongside studies compiling insights into 208 million debit, credit card and direct debit transactions, showed that essential spending was 12% higher in February than 12 months earlier, at £3. 97 billion.
Nationally, it defines expenses as invoices for applications, grocery stores, credit card reimbursements, and child care expenses.
Non-essential spending, which includes holidays, eating out and subscriptions, was up by 9% year-on-year at a total of £2.75 billion.
TV subscriptions are the first cost to be culled, with nearly a quarter (23%) of people reporting they have already reduced or cancelled TV subscriptions, with a further 14% considering 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, with the latest annual inflation rate for the year ending in February at 10. 4%, up from 10. 1% in January and higher than the 9. 9% forecast by many analysts.
Yesterday the Bank of England also raised interest rates from 4% to 4.25%, potentially affecting the cost of mortgages and other consumer borrowing.
Today’s budget offers a positive assessment of the outlook for the UK economy, while acknowledging the monetary hardship that millions of families are experiencing as a result of 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 has spent £94 billion in providing cost-of-living support – the equivalent of £3,300 for every household.
He announced sweeping pension reforms and expanded the provision of subsidized and government-funded childcare for parents who wish to work or increase their working 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, removing the price gap that makes prepaid meters more expensive than of credit.
This will save average prepaid admission consumers around £45 a year when it arrives later this year.
The UK’s nuclear power will be scaled up, with the aim of reaching 25% of nuclear electricity generation by 2050.
There have been no announcements of increases for advertising energy users beyond the Energy Bill Reduction Plan, 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 limit, which is reviewed quarterly, rose to £4,279 in January and will be set at £3,280 on 1 April.
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 force until the end of March 2024 and will rise to £3,000 on 1 July. It will come into play again if Ofgem’s 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 nine months old.
The chancellor hopes to breathe life into the economy with the expansion of 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 the single parent of a child) will have to devote at least 16 hours per week on average to the national living wage to qualify for assistance, leaving some low-income families (for example, where one parent is on full pension). education time) not eligible.
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 caregiver-to-care ratios. child.
In his speech, Hunt said providers would be allowed to increase the caregiver-to-child ratio 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 children under the age of five will be entitled to 30 hours of free childcare until 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 reflects the minimum an applicant is expected to earn for their task 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.
Elsewhere, the Chancellor also announced reforms to disability benefits with Universal Support – a voluntary scheme in England and Wales to help people with disabilities find work worth £4,000 per person.
Drivers will be pleased to know that the 5p tax cut for a litre of fuel, introduced in March 2022, will be in place for a further 12 months.
The relief will save motorists around £100 a year, the chancellor said.
A further £200 million will also be made available for pot-hole repairs in 2024, in addition to the current 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 overhead expenses awaiting those who revel in them. More wishes 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 a few: we still don’t know how fuel taxes will be replaced once electric cars become mandatory. There is also little clarity on how electric cars will be made for personal buyers as 2030 approaches.
“Most likely, the £200 million anti-chicken fund is still a Band-Aid for the country’s road network, which demands comprehensive and basic attention.
“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 notably repurposing the total amount they can allocate to their pensions before facing a hefty tax bill.
Hunt is going to abolish the ‘Life Allowance’ (LTA) from pensions, which currently stands at £1,073,100, from April next year. It increases the limit on annual contributions to tax-free pensions – the “annual allowance” – from £40,000 to £60,000.
The chancellor also increased the Explained Annual Contribution Allowance, or MPAA, from £4,000 to £10,000. The MPAA is a special restriction on how much you can contribute to a pension while receiving tax relief.
There is no limit on the value of pension savings that can be built up by an individual, but if the LTA is exceeded, the balance is subject to a charge known as the ‘lifetime allowance charge’.
Workers who have accumulated a pension above the allowance face an additional 25% tax (on the most sensitive source of income tax) when they take cash above this point as a source of income, or are subject to a 55% tax burden if they withdraw it. Cash as a source of income. Lump sum.
Part of the concept of today’s announcements is to discourage staff (including well-paid hospital experts) from reducing their working hours or retiring early to avoid punitive tax rates tied to their pension 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 increase in the annual allowance, Dean Butler of Standard Life said: “Only a small number of wage earners will ever make it to the existing annual allowance of £40,000, but the benefits of today’s increase will be of specific help to those to catch up on their savings later in their careers.
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 hopes to inspire retirees to return to work, this is the most important lever it may have used from a pension point of view. Increasing the subsidy to £10,000 will provide some incentive to return.
In a bid to support bars and pubs, the Chancellor announced that draught beer and cider will continue to be taxed at a lower rate than supermarket equivalents.
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 mean that the alcohol tax on draft pints will be up to 11 pence less than the tax on supermarket beer.
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. As of this afternoon, the tobacco tax will increase 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.
From 2024/25, self assessment tax forms – which must be completed by the self-employed, high earners and those with investment income, among others – will have a separate section for capital gains made by crypto traders.
The Chancellor confirmed the increase to corporation tax from 19% to 25% from April 2023, although he said only 10% of businesses, typically the largest, will pay the full rate.
While it has been shown that the corporate tax super-deduction, which allows companies to reduce their tax bill by up to 25 pence for every pound invested, will end on March 31, the chancellor announced a new tax deduction formula – the global sale (FE).
The FE policy will be introduced from 1 April 2023 and will run for three years until 31 March 2026. Under the new scheme businesses can immediately deduct 100% of the cost of certain capital spending from their pre-tax profits, including spending on IT equipment, plant machinery, fire alarms, vehicles and office furniture. This equates to a 25p tax saving for every £1 invested.
The first-year grant (YAA), which will end on March 31, has been extended for another 3 years until March 2026 to make it permanent. This deduction allows businesses to deduct 50% of the plant apparatus and machinery charge (known as special rate assets) from pre-tax earnings in the year of purchase.
The combined savings to businesses of FE and the FYA are calculated at £9 billion a year.
But Martin McTague, national president of the Federation of Small Businesses (FSB), was not impressed: “The glaring lack of innovation 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 stressed that the UK is one of the best places to do business – but small businesses need more ambition and more focus. Action is what counts if we are to reverse the 500,000 small businesses lost over the last two years.”
The government has announced the creation of 12 investment zones outside London, joining in the West Midlands, East Midlands, Greater Manchester, Liverpool, North East, South Yorkshire, Teeside, West Midlands and West Yorkshire, plus at least one each in Scotland and Wales and the chancellor of Northern Ireland 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 improvement projects in 20 areas of England, adding Bassetlaw, Blackburn, Oldham, Redcar and Rochdale, and an additional £8. 8 billion over the next five years to invest in sustainable transport systems in the regions.
New mortgage lending plummeted by a third at the end of 2022, according to the Bank of England’s latest quarterly statistics, suggesting rising interest rates and the continuing cost-of-living crisis took a 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 time around the start of the Covid-19 pandemic in 2020, this is the lowest level of new lending since 2015.
Notable loan balances rose by 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 an increase since the first quarter of 2021, a reflection of increased monetary tension among borrowers.
But arrears account for 0. 81% of total notable loan balances and remain close to the record 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 remarkable 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 of 2021.
Charlotte Nixon, a lending expert at wealth control firm Quilter, said: “The run-up to Christmas 2022 has been filled with uncertainty, and yet the country is not yet out of the woods and continues to suffer from the effect of emerging interest rates. and peak 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, so it’s conceivable that this will encourage more people. to the market and more people will seek a loan.
“While lenders are in a race to inspire borrowers, we are seeing rates stabilize as banks compete for customers. “
The government is giving UK individuals three additional months to plug the gaps in their National Insurance (NI) contribution records, Andrew Michael writes.
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 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 achieves a full NI payment package, perhaps due to a career break, which could reduce the amount of benefits they are entitled to. This includes the amount earned in the state pension, which currently stands at £185. 15 a week.
In addition, the government allows Americans to fill gaps in their IRB history by recovering lost contributions. Making voluntary contributions can particularly improve the situation of retired Americans rather than not at all.
After source of profit tax, NICs are the second largest tax in the UK, collecting almost £150 billion in the 2021/22 financial year, around a fifth of all the country’s annual tax benefits.
The resolution to extend the deadline comes after many other people said they were unable to access important government helplines, managed 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 contributions to the NI to get anything and at least 35 years to get the maximum amount, which currently stands at £9,600 per 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 over 74,000 new registrations, marking the seventh consecutive month of growth as supply chain issues from the pandemic continue to ease. This was significantly lower than the 132,000 new cars registered in January, as is typically the case ahead of the release of the new registration plates on 1 March.
Growth was noted across the market, with giant fleets leading the way with a 46% year-on-year increase, compared to a more modest 6% increase in passenger car registrations.
By category, superminis accounted for a third of all deliveries, and multi-purpose vehicles also gained popularity. At the end of the spectrum, registrations of executive cars and luxury sedans fell 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 need to come with measures that support this [net zero] transition, expanding affordability and ease of collection for all. “
Hugo Griffiths, editor-in-chief of Automobileswow, 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 wider economy has faced in recent years, we shout this good fortune from the rooftops, while ensuring that all available appendages are crossed to make this recovery continue. »
The government is consulting on regulating the questionable buy now, pay later (BNPL) credit industry, which is used by around 10 million people in the UK.
The proposed regulations would see BNPL corporations regulated through the Financial Conduct Authority (FCA), the watchdog that governs banks, insurance corporations, and other money firms.
Two years ago, the FCA said regulation was needed to protect consumers, while last summer it warned companies to oppose misleading advertising and promotions, adding on social media
Under the new proposals, BNPL consumers will also be able, for the first time, to file court cases with the Financial Ombudsman Service (FOS).
The government says it wants to protect customers from “unconstrained borrowing” while still ensuring those who need it have access to interest-free credit.
Ahead of regulation, the FCA will monitor the market and interfere using its existing powers where it identifies consumer harm. The government says that as regulation approaches, lately unlicensed BNPL lenders have a strong incentive to treat their consumers and prepare their business models. before applying for permission from the FCA.
BNPL schemes enable people to pay for purchases in interest-free instalments over a matter of weeks, usually with no credit or affordability checks taking place. Penalties may be levied for missed or late payments.
At present, customers have no recourse to compensation or redress if something goes wrong.
Companies make money through revenue-sharing agreements with retailers. The main players in BNPL are ClearPay, Zilch, Klarna, and Affirm.
BNPL’s popularity has skyrocketed amid the cost-of-living crisis, with consumers employing the service to pay for items such as groceries and application bills, rather than so-called “discretionary” spending on clothing and non-essentials.
Launching its eight-week consultation, the government said: “Given the increasing number of people signing such credit agreements and the potential dangers of consumers being exposed to monetary damages, the government is proposing new regulations.
“It will mean BNPL credit products are set to be regulated by the FCA and consumers will have the new right to take complaints to the Financial Ombudsman Service.
“Under the new rules, providers will have to provide consumers with key data about their loans and consider actual credit. “
Assuming the consultation backs the government proposals, legislation will follow, with the regulations expected to be in force next year.
Responses to the consultation should be sent by 11 April 2023 to BuyNowPayLater@hmtreasury. gov. uk.
Jinesh Vohra, founder of open banking app Sprive, said: “The regulation of BNPL loans is a positive step to protect consumers from potential harm. BNPL corporations are largely unregulated, and without thorough checks on their monetary capacity, I worry that many consumers will have taken on more debt than they can handle.
“It’s great to see that, with this draft legislation, BNPL companies will be held accountable for their lending practices and will need to conduct affordability checks to ensure they are not putting consumers at risk.”
The government is also thought to be working on plans to bring the cryptocurrency sector within the regulatory ambit for the first time. As with BNPL, crypto customers have no source of redress if something goes wrong.
The number of tenants evicted from rental housing increased by 98% at the end of 2022 as the housing crisis allegation deepened, according to foreclosure statistics released by the Department of Justice, writes Jo Thornhill.
Government figures, covering England and Wales, show there were 5,409 property seizures in the three months to December 2022, up from 2,729 in the same period in 2021.
By law landlords must follow a three-stage process to evict a tenant from their rented property. This includes giving the tenant valid notice, issuing a possession order through the courts and then applying for a warrant for eviction.
Data from the Department of Justice revealed that in addition to foreclosures, property owners filed 20,460 repossession applications in the last quarter of 2022 (up 42% from the same period in 2021). In total, there were 16,158 recovery orders (a 135% increase) and 8,717 court orders (a 103% increase). %).
Despite the sharp rise, the MoJ said rental property repossessions have not come back to pre-pandemic levels. At the most recent peak – in 2014 and 2015 – there were between 10,000 and 11,000 repossessions every quarter.
Polly Neate, executive leader of housing and homelessness charity Shelter, said: “Every eviction that falls on someone’s doormat brings worry and uncertainty. No one needs to be forced out of their home, yet those court figures show this is applying to more and more personal tenants in this country.
“The chronic lack of social housing means that the demand for volatile and overvalued personal rents has skyrocketed, and more and more people are pitted against each other in the search for housing. Every day, we hear from desperate families who haven’t won eviction notices because of the daring who complained of poor housing situations or because their landlords were trying to appropriate emergent 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 seizures 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 onset of the coronavirus pandemic.
Year-over-year, sales of gasoline vehicles rose 14. 6 percent to 58,973, diesel sales declined 12. 1 percent to 5,280 and mild hybrid electric vehicles (MHEVs) rose 8. 3 percent 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 increased by 19. 8% to 17,294 cars, representing 13. 1% of new registrations. However, this figure is lower than the monthly average for 2022.
While the SMMT expects electric vehicles 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 was one charging point for every 62 electric vehicles, down from one charging point per 42 vehicles at the end of 2021.
Hugo Griffiths, from Carwow, said: “Despite battles on many fronts, added supply chain issues, trade difficulties and the decline of Covid, the UK car market enters 2023 in smart health, while in January registrations reached pre-lockdown levels.
“The real success story is electric cars, registrations of which rose by a fifth compared to January 2022, while fleet and business buyers are driving growth despite a slight drop in the number of private individuals purchasing new cars.
“With electric cars accounting for 13. 1% of all new car registrations, it is clear that drivers and the car industry are following the government’s recommendation to go electric ahead of the ban on new car sales. of gasoline and diesel within just seven years. .
“However, what we want to happen now is for policymakers to take public charging infrastructure and incentives for personal chargers seriously, with anecdotal reports and concrete knowledge painting a transparent and unappealing picture: we don’t have enough chargers and we urgently want more. “.
Commenting on the new data, Lisa Watson of Close Brothers Motor Finance said: “One in 10 Brits will buy an electric car next, and more than one in five will switch to hybrid. To meet this demand, it is the duty of car dealers to obtain 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 in the autumn.
First started in 1964, credit unions are local financial co-operatives that are owned and controlled by their members, providing a range of services including savings and loans.
The recent rise in the cost of borrowing combined with the withdrawal of short-term credit providers from the market has left many people short of choice when looking for 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.
Bank of England data showed there were 1. 94 million adult credit union members in the third quarter of last year. This is a drop of around 2,000 people in the last three months, but an increase on the 1. 9 million members registered the previous year.
In the midst of a life 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. Almost a quarter of parents are dipping into their pension or salary, while a significant proportion have used the equity in 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 pay the required monthly bills appears to be increasing, writes Laura Howard.
Data from analytics firm FICO shows a 14. 8% increase in the number of people without two consecutive monthly credit card bills in November 2022 compared to 12 months ago.
The number of credit cardholders with 3 consecutive overdue bills was 10. 3% higher in the same period. Each type of late payment has shown an increasing trend since May and June respectively.
Depleted savings built up by the pandemic, emerging interest rates and persistently high inflation levels are likely factors behind the increased pressure on credit card payments, according to FICO.
However, those who manage to pay monthly bills seem to continue to do so, and the number of credit card accounts without a single payment dropped by 4. 2% month-over-month; By comparison, it’s still at a 9% increase. to 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 down 32% year-over-year. last.
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 collected data and information from 100 funeral administrators and 1,508 other people who planned funerals over the past four years, shows that the average funeral in the UK now costs £3,953.
Mark Screeton, chief executive of SunLife, said: “It’s unexpected to see, at a time when everything else is going up in price, that funeral prices have fallen for the second year in a row.
“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 prices dipped in 2022, the overall ‘cost of dying’ rose 3.8% year on year, SunLife reports. Total costs – including venue hire, catering, professional fees, funeral notices, flowers and limousine hire – reached £9,200 in 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 research by SunLife, 69% of funerals are paid for, at least in part, through agreements made through 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 those expenses leave about one-fifth (19 percent) of families with money problems. To cover unpaid funeral expenses, 27% of those families report a credit card, while 14% say they applied for a loan and 33% used cash from their savings or private investments.
Mr Screeton said: “Making some kind of provision for your own funeral can be a big help to your family at what will be a difficult time.”
Car insurance premiums have soared by nearly a third over the past year, while the cost of home cover has risen by about a fifth, according to data suppliers Consumer Intelligence (CI), writes Jo Thornhill.
This is despite regulatory adjustments imposed on the insurance industry in 2022 through the monetary regulator, the Financial Conduct Authority, which aimed to make insurance prices fairer for consumers.
CI said that the cost of car cover rose by 30% on average in the past 12 months and that home insurance was 17% dearer.
The new regulations state that insurers cannot charge existing consumers a renewal premium higher than the costs quoted for equivalent new consumers. The move is expected to prevent large increases in renewal premiums for millions of drivers.
But market knowledge through 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 cost-of-living crisis deepens.
In a separate study on the effect of emerging life burden, CI found that 6. 6% of consumers canceled an insurance policy in December 2022 due to emerging life burdens. The most likely bureaucracy of the policy to be suspended was legal access insurance. Travel Policy and Gadget Policy.
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 Motor 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 last three years, owing to supply chain shortages and pandemic disruption, but the final five months of 2022 showed numbers beginning to climb.
Total battery electric vehicle (BEV) registrations in 2022 increased by more than 40% compared to last year. In December, BEVs represented 33% of registered vehicles.
The all-electric Tesla Model Y and Model 3 were the first two vehicles registered in December, and the former was 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 (that is, cars equipped with a small electric generator in the position of starter motor and alternator, in addition to a small rechargeable lithium-ion battery).
The SMMT says 2023 will be a better year for the industry as chain issues are resolved and semiconductor shortages ease. Expect 1. 8 million registrations this year.
Mike Hawes, director of SMMT, said: “The automotive market is still adrift from its pre-pandemic performance, but could well support broader economic trends by posting significant expansion in 2023.
“To secure that growth – which is increasingly zero emission growth – the government must help all drivers go electric and compel others to invest more rapidly in nationwide charging infrastructure.
“Innovation and commitment from brands have allowed electric cars to become the most popular type of vehicle at the moment. However, for a country that aspires to be a leader in electric mobility, this will have to be accompanied by policies and investments that eliminate customer uncertainty about the change, that is, about where drivers can recharge their vehicle.
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 analysis shows that, to hit government targets, 30,000 new charging points will need to be built every single year for the next seven years, a tenfold increase in the number put in the ground in the past decade.
“Addressing the fragility of the current charging network, at scale and ahead of need, is critical to support mass adoption of EVs which requires urgent collaboration and investment from across the sector in the year ahead.”
Hugo Griffiths, of the car industry site carwow, said: “Given the difficulties faced by both consumers and the industry in recent years, the fact that 183 new cars will be registered every hour in 2022 (more than 3 per minute) shows that buyers’ appetites and factories’ capabilities in producing cars remain far less adequate than some might believe.
“The UK’s reclamation of its position as Europe’s second-largest market for new cars also shows how important a player we remain on the Continent’s stage, something reinforced by the fact the Nissan Qashqai – a car partly conceived and entirely built here – was the most popular new car of 2022.”
The government’s £60 million ‘Move for £2’ scheme is now up and running. From January 1 to March 31, the plan caps bus fares at £2 for passengers traveling outside of London in England, writes Candiece Cyrus.
The government said passengers would save almost a third on the average bus fare of £2. 80. Passengers in rural areas can face one-way fares of up to £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 on all buses to automatically trigger the limit.
More than 130 bus operators, such as Stagecoach and National Express, are involved in the task and their crusade to inspire more commuters to take the bus into 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 grips 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 help bus use as the industry recovers from a relief at facilities during the pandemic. The government says it will leverage its £2 billion investment during the pandemic, which has been used to fund upgraded facilities and new electric and hydrogen buses. .
A bus fares pilot scheme, launched in Cornwall in April 2022, backed by £23.5 million of government funding, has seen passenger numbers rise.
It allows passengers to buy a £2.50 day ticket within towns or a £5 day ticket for travel across all of Cornwall and is valid across multiple bus operators.
Hundreds more households on certain benefits will receive a Cold Weather Payment of £25 as freezing temperatures grip the UK and the Met Office warns of continued snow and ice, writes Candiece Cyrus.
For more information on the postcode districts in which eligible households are already due to receive payments, see 9 December post 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
11 December 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 in all parts of England, while the Met Office has also issued yellow warnings for ice in Wales, the north, east and west of England.
Freezing temperatures will persist long enough for households in affected areas to qualify for a £25 Cold Weather Payment if they meet eligibility criteria and are receiving certain benefits These include:
As part of the scheme, which runs from 1 November to 31 March each year, the government provides eligible households with a payment each time the average temperature for their postcode district is forecast to be 0°C or below, or has already been recorded as such, for seven consecutive days.
Recipients don’t want to take action as invoices will need to be automatically credited to the bank accounts of those who qualify within 14 days of activation.
The Cold Weather Payment scheme ceased to operate in Scotland earlier this year. It has been replaced with an annual Winter Heating Payment of £50.
The eligibility criteria are those for cold weather payments. Payments for this winter won’t be made until February 2023.
The postcodes activated for £25 this week are:
December 5
December 6
December 7th
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 one 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 puts hiring affordability for single workers at the lowest levels in a decade, with average pay now making up 35% of a typical person’s income.
Average wages rose just 6% in the same period, stretching affordability for renters amid the cost of living crisis.
Zoopla says significant rent inflation is the result of demand outstripping supply in the private sector. Demand is 46% above average, while total supply is 38% lower, it reports.
Michael Cook, group managing director at Leaders Romans Group, said: “[The government’s] dual-pronged approach of new legislation and taxation is pushing much needed good landlords out of the sector and driving average rents due to 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 source and demand in the rental market. »
Rental prices have risen most in major cities, Zoopla found. In London, prices rose by 17% annually, while they rose 15.6% in Manchester, 14.1% in Glasgow and 12.3% in Birmingham. Conversely, Hull, York and Oxford all experienced 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 reaction to rising rental costs, more and more tenants are opting for accommodation percentages. According to studies conducted by the Resolution Foundation, the average personal tenant now has 16% less acreage than they did two years ago, suggesting that more tenants are joining forces to cover housing costs.
Others to reduce their size. Zoopla says it has noticed increased demand for one- and two-bedroom apartments (which now account for 32% of its rental inquiries) and decreased interest in houses.
Richard Donnell, executive director at Zoopla, said: “A chronic lack of supply is behind the rapid growth in rents which are increasingly unaffordable for the nation’s renters, especially single-person households and those on low incomes.”
Although rental price inflation shows little sign of slowing in the short term, Zoopla predicts a steady reduction to 5% over the course of 2023.
Mr Donnell added: “Increasing investment in new rental supply from multiple sources is the main route to reducing rental growth and making for a more sustainable private sector.”
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 involve data about consumers, from their presence on voter rolls and county court rulings opposing their name, to the credit products they used. This data is used to build a credit score that rises and falls based on an individual’s monetary behavior. .
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 lending decisions better reflect people’s money situation.
“This helps ensure that consumers are not denied credit they simply can or granted credit 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, the FCA’s executive director, consumers and competition, said: “It is vital that the credit information market works effectively for firms and consumers. We want to see industry reform to help deliver the changes, but in the meantime, it is important consumers know how to access their credit information and talk to their lenders if they are facing difficulties.”
Chancellor Jeremy Hunt’s Autumn Statement extended the freeze on income tax thresholds until 2028, meaning more people will pay higher levels of tax as their earnings increase.
It also indicated that the energy price guarantee will run for 12 months from April 2023, but that typical annual expenses will increase from the current level of £2500 to £3000.
He announced measures for the UK’s energy independence and promised additional investment in energy efficiency, infrastructure and technological innovation.
Controversially, he said electric vehicles will become liable for vehicle excise duty 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 beyond the current date. This means that, as earnings rise, more people will be brought into paying tax, and more will find themselves paying tax at 40%.
Income tax relief from private sources will remain at £12,570, with the higher rate tax threshold 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 to update Ofgem’s energy value cap, will remain in place at its current point until April 2023, keeping typical annual household expenses at around £2,500.
From April 2023, this figure will increase to £3000 per year, with an extended 12-month warranty.
According to analysts at Cornwall Insights, typical expenses would rise to £3,739 next year if the warranty was not implemented.
The EPG will be revised and adjusted downwards if wholesale costs decrease at the time in question.
The government will also consult with customer groups and the industry on how best to provide coverage to customers from April 2024, when the EPG ends, adding features 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 Scheme will remain in place for business energy consumers until the end of March 2023. It is currently under review to determine what support may be given to companies from April onwards, although Mr Hunt said the scale of support is likely to reduce.
PENSIONS & BENEFITS
The government is adhering to the ‘triple lock’, which means pensions and benefits will rise next April by 10.1% – September’s measure of inflation.
The government will take over maintenance bills in 2023/24 so vulnerable families can cope with higher bills: those on means-tested benefits will get an extra £900, pensioner families will get £300 of additional 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 developments says: “. . . the planned 23% increase in the fuel tax rate at the end of March 2023, adding £5. 7bn to government profits government next year. This would be a record haul of money, and it is the first time a government has increased fuel tax rates since January 1, 2011. It is expected to increase the value of gasoline and diesel by around at 12 pence per litre.
The automotive teams have asked the government to explain that this is a political 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 of online automotive website carwow said: “The government is a bit stuck when it comes to encouraging electric cars – they need us to buy electric cars to meet net-0 targets and decrease local air pollution.
“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.
“But the devil is in the main points and an unpleasant wonder is looming on the horizon for existing electric car owners: new electric cars will be the only ones that will have to pay road tax from 2025: electric cars registered from April 1, 2017 will also be subject to this tax. at a cost of £165.
“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 tax by up to 5% a year (3% plus 2% if they have social care 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% – almost 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, which surveyed 3,000 individuals between 6 and 12 October 2022, also found a quarter of respondents (25%) said the cost of living crisis was ‘on their mind daily’.
Keeping up with the cost of energy bills, housing and food were key concerns. More than a third of adults (34%) said they expect they’ll be unable to pay energy bills this winter, while 22% anticipate falling behind with rent or mortgage payments.
A further 34% expect they will struggle to pay for food — rising to 49% of 18 to 34 year-olds. Almost one fifth of respondents (19%) expect to rely on food banks this winter.
To reduce energy costs, 38% of respondents say they will likely work in the workplace more often, while 37% will install smart meters at home and 67% will avoid using giant appliances outside of work hours. . top.
When it comes to their grocery bill, 67% of Brits plan to move to a more successful supermarket and 46% intend to sell the items they own to make extra money.
Some respondents also put major life events on hold due to burden issues: more than a third (36%) of people aged 18 to 34 delayed having a child due to the burden of life crisis.
Others are postponing the purchase of a home (19 percent) or making primary purchases, 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 cutbacks, almost half of adults (45%) expect to use the ‘majority’ of their savings to keep up with costs this winter — rising to 62% of 18 to 34 year-olds.
Additionally, 12% of respondents say they have gone into 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 cost-of-living crisis may leave economic scars that will last well beyond the current inflationary peak. “
Several unnamed UK lenders will pay out millions of pounds in compensation to customers who were treated unfairly after finding themselves in financial difficulty during the Covid-19 pandemic, according to the UK’s financial regulator, Andrew Michael writes.
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 will also be closely reviewing a further 40 firms in the coming months “to make sure they are meeting its expectations and to protect customers from harm”.
Part of the FCA’s review included an investigation into how lenders implemented debt fees and tariffs and the measures used to deal with distressed consumers.
In another component of the exercise, the FCA said only 15 of the 50 firms it looked at “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 action to limit or prevent companies from lending to Americans if they do not meet our needs for financially-strapped consumers to be treated fairly. “
Laura Suter, director of private finance at AJ Bell, said: “We are already seeing more and more people turn to debt to pay for mounting expenses and it is imperative that those struggling to pay are presented with solutions, rather than being abandoned. to their fate. He struggles to pay and finds himself in a spiral of debt.
Chancellor of the Exchequer Jeremy Hunt 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 “short two-and-a-half week delay” in his as the most productive course of action.
Mr Hunt had drawn up a draft plan to be announced next Monday, ahead of a crucial interest rate-setting meeting of the Bank of England’s Monetary Policy Committee on 3 November.
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 2020-21 Covid crisis, when he was the architect of the leave scheme.
However, he refused to be drawn on whether benefits would increase in line with inflation thanks to the so-called triple lock. He also added no detail as to what support might be provided to households when the current Energy Price Guarantee comes to an end in April 2023.
When quizzed on energy strategy, Mr Sunak said the government was committed to renewable energy and increased use of nuclear power. He appeared to rule out expansion of government-backed onshore wind power in favour of offshore developments.
He also suggested he would adhere to the Conservative Party’s manifesto commitment to a moratorium on fracking, enacted in 2019, which bans the use of the questionable drilling strategy to extract fuel from shale rock.
As housing, energy and food costs climb, one in four UK adults say they are experiencing financial difficulties, or would find themselves in difficulty after an unexpected expense, 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 paying their bills too burdensome.
The research also found 12.9 million individuals (24%) have low financial resilience, meaning they would experience difficulties if they suffered 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 conducted through the Nationwide Building Society suggests they spent 7% less in September 2022 than they did in August.
The research analysed debit card, credit card and direct debit transactions made by Nationwide customers between 1 and 30 September. It revealed a 4% month-on-month drop in spending on servicing debt, suggesting some customers may be falling behind on repayments.
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 cut back on spending in those categories, spending on essential goods rose 9% year over year, largely due to fuel and housing costs.
In September 2022, consumers spent 12% more on motor fuel and electric vehicle charging, 11% more on mortgage payments and 8% more on rent than they did in September 2021.
Mark Nalder, Nationwide’s director of billing strategy, said: “The decline in spending will most likely continue as other people tighten their belts now to prepare for the holiday season or to have enough to spend, whether it’s to save money or somehow 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.
Raising interest rates and energy prices are most likely to be the most sensible on new Prime Minister Rishi Sunak’s list of priorities as the UK faces a cost of living crisis. All eyes will also be on the Energy Price Guarantee scheme, which has been shortened until April 2023 under Liz Truss’ government.
The ONS survey also found a marked disparity in the impact of emerging energy and asset costs between households:
According to the recent public opinions and social trends bulletin from the ONS, 93% of adults reported an increase in the cost of living compared with a year ago while nearly 80% reported that their cost of living had increased over the last month.
More than 10% of renters reported being included in their energy bills, compared to 3% of homeowners with a loan and 1% of homeowners who own their home. About 5% of contractors were behind on their rent payments, compared to 1% of others with a loan.
The ONS attributed the difference to the fact that some landlords had constant-rate mortgages, while tenants were exposed to rent increases.
Regionally, adults in the North West and London were more likely to show up on their energy bills, while almost 40% of adults in London said they were struggling to pay rent or 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 outside 10 Downing Street after being appointed as the UK prime minister earlier this morning, Rishi Sunak has said he would put the UK’s economic stability at the heart 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 that Ms Truss was “not wrong” in her plan to aim for increased growth. But he acknowledged that mistakes were made: “I have been elected as leader of my party and your Prime Minister in part to fix them.”
And 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 and every day afterward with hope.
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 position.
Next Monday, Mr Hunt is expected to reveal the details of the government’s medium-term fiscal plan and associated forecasts from the independent Office of Budget Responsibility.
An immediate void is that of business secretary, following the resignation of Jacob Rees Mogg, a strong supporter of Boris Johnson.
As financial markets digest the political turmoil of recent days, yields on government bonds have returned to levels last seen before the mini-Budget, with investors welcoming Mr Sunak’s appointment. The 30-year gilt yield has fallen to 3.68% today.
Peak yields on government bonds, 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 government bonds, increasing its debt burden. This is reflected in other interest rates, which is why mortgages have become more expensive in recent weeks.
Long-term government bonds have already recouped all losses through the mini-budget’s seismic package of unfunded tax cuts, which required intervention by the Bank of England to keep the monetary framework stable. United Kingdom.
Rishi Sunak has replaced Liz Truss as Prime Minister of the United Kingdom, less than a day after confirming his goal of running for office, 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 tackled through “stability and unity”. He said his goal was to “build a better, richer long-term future for our children and grandchildren. “
Over the summer, he won the highest share of support among his party’s MPs in the last leadership contest that followed Boris Johnson’s resignation, but was thwarted when party members voted for Ms Truss.
Sunak now succeeds Truss, who resigned just forty-five days after her government’s disastrous mini-budget, which caused turbulence in money markets and saw the pound fall to a record low against the dollar.
Sunak’s appointment gave the impression of calming the markets, with government bonds – or government bonds – rising following today’s news. The benchmark 10-year bond yield fell nearly 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 to raise expectations about emerging interest rates, which could simply ease upward pressure on lending rates.
Edward Park, chief investment officer at Brooks Macdonald, said: “Lower gilt yields will reduce the borrowing costs of the UK government and a new fiscal outlook may allow the Bank of England to be less aggressive with their 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, a period that coincided with the Covid-19 pandemic, Mr Sunak has already given the City of London and financial watchers a flavour of how he might run the country.
He takes the challenging situations posed by inflation seriously and is widely viewed as a fiscal conservative. In other words, he is in charge of balancing the nation’s books.
This trend differs from that of her predecessor, Liz Truss, whose expansion strategy imploded within weeks of massive, unfunded tax cuts announced in September’s mini-budget.
If Sunak needs to deliver on his preference for fiscal prudence, an era of austerity is inevitable, whether through tax rises, government cost cuts or both.
Over the weekend, Lord Mervyn King, former governor of the Bank of England, warned that the UK faces a “more difficult” era of austerity than that which followed the currency crisis of 2008. He added that the average person can simply face “considerably higher taxes” to finance public spending.
Mr Sunak will be keen to deliver on his previous promises of fiscal responsibility. He must balance this, however, with the appropriate support if he is to restore the public confidence.
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 spending spree linked to the pandemic is over, in fact, 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 budget in order to overcome 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 leadership campaign was led on a promise of fiscally conservative policies, which has already pleased the markets and given the pound a boost. However, it’s also crucial that the new PM focuses on immediate reassurances for Britons struggling to stay afloat amid a soaring cost-of-living crisis. Confirming his stance on key policies such as the triple lock, or benefits cuts, would be a step in the right direction.”
Sam North, market analyst at eToro, said: “With Rishi Sunak in charge there will be less pressure on the Bank of England to raise interest rates as aggressively, thanks to lower yields causing less of an incentive for traders to dump gilts. The pound will push higher due to less uncertainty, too. But with the news of his appointment already priced in, investors shouldn’t expect a big move following the announcement.”
Serving as Prime Minister has, until recently, been the pinnacle of British public life – a golden goblet from which the individual supped the honeydew of political immortality. Now it seems like a poisoned chalice – and a tarnished one at that, writes Kevin Pratt.
As a previous PM once noted, all political careers end in failure. But Liz Truss’s calamitous period in office will secure a place in the history books for the velocity with which errors were made and then compounded, and the scale of the damage caused.
To be fair to Liz Truss, she came forcibly against a backdrop of global economic crisis. But she and her allies managed to temporarily worsen the situation by clumsily spooking 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 changes 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 through the Bank of England and presented through the Prime Minister or his Chancellor. But a government’s economic policies – such as large-scale unfunded tax cuts and Kwasi Kwarteng’s ill-fated September 23 mini-budget – are making cash markets nervous. And when they feel nervous, they ask for 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 comes after it ends, no-one yet knows. The whole issue will be reviewed and we can expect action to help those deemed most in need. But who will qualify, and what help they’ll get, remains to be seen.
The triple lock is designed to protect the spending power of State pensions and benefits by ensuring they increase by the highest of three measures: September’s annual inflation rate, average earnings, or 2.5%. The inflation number is by far the highest at a whopping 10.1%.
Ms Truss said only yesterday that the lock, expensive though it will prove, will remain in place, at least for pensions, and she added that the Chancellor was in agreement. But she’s gone, and who knows who will be Chancellor next week? Mr Hunt has ruled himself out of the race to be PM this time round, preferring to remain as Chancellor. But, of course, there’s no guarantee the new incumbent at Number 10 Downing Street would want to keep him as a neighbour at Number 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? Profound uncertainty and anxiety for millions of households. Major expenses such as housing prices are on the rise and rising, expenses are skyrocketing, and supermarkets are getting more expensive as the week goes on.
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 as part of a follow-up address to the House of Commons, having reversed a substantial proportion of last month’s mini-Budget earlier today.
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 have been forthcoming about the levels of support that might be provided from April onwards when the EPG ends, nor how people or businesses will qualify for assistance.
Cornwall Insights, the market analyst, said average annual expenditure could exceed £4,300 once the EPG is completed in the spring under M. Under the EPG, an average family of customers would pay around £2,500 a year for the next two years, starting this month.
Outlining his plans for a new economic advisory body, Hunt told MPs: “I have more independent recommendations as I begin my adventure 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 actions to provide a financial statement and his decision to address the nation this morning, instead of waiting until 31 October – a date that had already been brought forward by three weeks – Mr Hunt said it was important for the government to “do more, more quickly to give certainty to the markets.”
He added: “I want to be completely frank about the scales of the economic challenge we face. We have had short term difficulties caused by the lack of an Office for Budget Responsibility forecast alongside 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 outlined his plans to MPs. On 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 two of the measures contained in his predecessor Ki Kwarteng’s September 23 mini-budget.
Mr Hunt is also cutting short the Energy Price Guarantee (EPG) and Energy Bill Relief Scheme (EBRS) aimed at UK households and businesses. These were announced by Prime Minister Liz Truss when she took office earlier last month.
The EPG was supposed to last for two years, but now it will only run until April 2023. EBRS, which was due to run until 31 March 2023, may have been extended if a review revealed that more was needed at this stage.
Among the measures announced through Hunt is the abandonment of the planned cut in the fundamental rate of the tax on the source of income from 1 pence to 19 pence next April. The chancellor said the base rate would remain at 20p “indefinitely”.
The Chancellor said that plans to cut dividend tax by 1.25 percentage points, also from next April, are also being shelved. According to the Treasury, the combined saving from these two latest tax U-turns amounts to around £7 billion a year.
Hunt also said plans to repeal reforms to unpaid painting regulations, also known as adjustments to IR 35 rule, would be scrapped.
Also being shelved is a previously planned freezing of alcohol duty rates that was due to take place from 1 February next year. The Treasury added that plans to introduce a new VAT-free shopping scheme for non-UK visitors to Great Britain were also being junked.
A 1. 25 point relief on National Insurance contributions from next month has remained in place, 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 a Treasury-led review of how to help families and businesses with their energy expenditures will be introduced from April 2023.
Today’s announcements follow several significant policy changes that were also 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 taken today’s decisions to ensure the UK’s economic stability and provide confidence in the Government’s commitment to fiscal discipline: “The Government is ready to act decisively and on a sufficient scale to regain the country’s confidence. . »
But Mr Hunt went on to warn that “there will be more difficult decisions to take on both tax and 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, managing director of Bestinvest, said: “After recent u-turns over the abolition the 45p tax band and the halting of corporation tax rises, the new Chancellor of Exchequer has this morning comprehensively ripped-up the Prime Minister’s fiscal policy in a concerted effort to placate the angry gods of the bond markets and restore the UK Government’s battered credibility for 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, corporate taxes much higher next year and 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, head of investment at interactive investor said: “Jeremy Hunt’s focus on reassuring the markets and reinstating confidence appears to have worked so far with gilt yields trading lower and sterling pushing higher. The FTSE 100 is staging gains with utilities and housebuilders – the most budget-sensitive sectors – outperforming, as Trussonomics is unwound with the reversal of the biggest tax cuts in 50 years.”
Jeremy Hunt, appointed on Friday to update Kwasi Kwarteng as Chancellor of the Exchequer, will make remarks and meet the House of Commons on the government’s monetary plans.
The Chancellor is expected to continue the process of rowing back on pledges made in the so-called mini-Budget on 23 September, which threw markets into turmoil, sending sterling to its lowest ever level against the US dollar and causing a crisis on gilt markets which has fed through into a steep increase in the cost of mortgage borrowing.
Markets have been concerned about the lack of detail attaching to the initial tax-cutting measures and proposed funding for growth. Mr Hunt will attempt to demonstrate a new approach to financial rigour and responsibility.
In a statement released this morning, the Treasury said: “The Chancellor will draft a statement later today and set out measures in the medium-term budget plan that will contribute to fiscal sustainability.
“He will also make an appearance in the House of Commons this afternoon [at 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 sustainable public finances contribute to economic growth.
“The Chancellor will then present the comprehensive medium-term budget plan, which will be published on 31 October, combined with forecasts from 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, Liz Truss, Prime Minister, reversed one of the key planks of the mini-Budget – a plan to stop the increase in corporation tax next April from 19% to 25%. This will now go ahead.
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 due next month, which will fly in the face of increases announced this year through Rishi Sunak when he was chancellor, are expected to continue.
Liz Truss, Prime Minister, has reversed the decision made in the mini-Budget of 23 September not to raise corporation tax next April, as planned by the previous Conservative administration under Boris Johnson.
Speaking this afternoon, he said the 19% to 25% build-up would continue next year, with the £18 billion raised acting as a “down payment” on the medium- to medium-expansion budget plan. term of government.
Much of the market turmoil seen in recent weeks is due to the plan, announced on Sept. 23, being unfunded.
Corporation tax is paid through companies on their trading profits and on profits derived from investments and asset sales. The “small profits” rate of corporation tax will be maintained, meaning that smaller or less successful companies will not pay the full 25% rate, while those with profits of less than £50,000 will continue to pay 19%. .
The full details of the fiscal discipline that will support the plan for tax cuts and investment will be provided on 31 October by Jeremy Hunt, who was appointed Chancellor earlier today following the dismissal of Kwasi Kwarteng.
Mr Hunt’s forecast will be accompanied by a report from the independent Office for Budget Responsibility.
Today’s corporation tax u-turn follows the retreat by Mr Kwarteng earlier this month when he abandoned plans to remove the 45 pence additional rate of tax – another controversial plank of his mini-Budget.
Truss says she remains committed to creating a low-tax, high-wage, high-growth economy, with reduced public debt levels and a more effective public sector. She said public spending levels would rise at a slower rate than expected.
The British pound rallied against the dollar after falling below $1. 12 as currency markets digested the prime minister’s press conference.
On the stock market, the FTSE100 index of British primary shares rose 1. 7% on the day to 6,967.
Jason Hollands, managing director of Bestinvest, commented on the changes: “Businesses and investors do not like instability and uncertainty but the retreat on corporation tax at least signals to the bond markets that the government is responding to concerns 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 some fiscal balance, while at the same time seeking to preserve the benefits of the tax cut. in terms of private taxation.
“We still have a fall budget report on October 31, but it is unlikely, given the painful delight of the last three weeks, that it will include anything new or ambitious. “
Matthew Amis, chief investment officer at abrdn, said: “It looks like there are still more chapters to this story but, for now, the money markets and in particular the gold market can take a deep breath and calm down a bit. This will allow the Bank of England to abandon its bond purchases on Monday as planned and increase the number of customers for quantitative tightening from a few weeks onwards.
“Government bond yields have particularly risen 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. The Bank will still want to raise [interest rates] aggressively Over the next few months, the Gilt market will still want to absorb incredibly high levels of Gilt supply.
“However, with Trussonomics classified as a ‘disaster,’ we can return to a functioning government bond market. “
Former Health Secretary Jeremy Hunt has been appointed Chancellor of the Exchequer after Ki Kwarteng was sacked by Prime Minister Liz Truss, having spent just 38 turbulent days in 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, Hunt opposed Truss in the Conservative Party leadership race but was booted from the proceedings after failing to secure enough confidence from his 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 turned on their central heating since late summer this year, writes Bethany Garner, in a bid to tackle emerging energy costs.
And, as households continue to grapple with the rising cost of living, almost one-in-five (18%) households intend to delay switching on their heating until December — two months later than usual — while 22% say they will only 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.
Householders also expect to use their heating more conservatively than in previous years with a quarter of respondents (25%) planning only to heat specific 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 warranty ensures 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 last value limit.
Mandy Beech, retail director at Nationwide, said: “This survey shows how many other people are struggling, even taking into account the government’s energy value cap, and other people are having to think carefully about when and in which rooms they turn on the heating”. . »
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 was a key area for saving, with almost half of respondents (48%) reporting they have cut back on eating out and takeaways, 40% spending less on supermarket fresh meat, 27% buying fewer fresh fruits and vegetables and 33% changing where they shop for groceries.
In other spending areas, a further 36% say they are using their car less, while 33% are cutting back by mending clothes rather than buying new.
Almost a third of people (32%) have been unable to save any money since April while a further 40% have managed to save a maximum of just £300.
In the absence of an adequate savings cushion, there is a risk that households may turn to borrowing to make it through the winter.
A Nationwide study found that 20% of households would use a credit card to cover emerging energy costs, while a further 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, Minister of Finance, 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 faster, the plan’s contents – which are due to show how he will set the UK’s debt on a downward path within five years – will now be published on 31 October.
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 the money markets.
In September, amid a series of announcements adding the green light to fracking as a viable means of energy production in the UK, the mini-budget included proposals for £45 billion in unfunded tax cuts.
The resolution to scrap the 45p tax rate for higher earners was later scrapped.
But the mini-Budget’s overall effect not only prompted a run on the pound, it also forced an intervention by the Bank of England to maintain financial stability within the government bond markets.
In a letter to Mel Stride MP, chairman of the Treasury Select Committee, Kwarteng said the new date of October 31 would allow the OBR, which audits the government’s monetary plans, to “capture data, such as the recent national quarterly report. ” . accounts.
“This will make it possible to establish a comprehensive forecasting procedure according to criteria that meet the legal needs of the Charter of Budgetary Responsibility followed by Parliament and which will also provide a comprehensive assessment of the economy and public finances. “
Customers of 11 water companies will have their bills reduced by £150 million after their suppliers failed to hit performance 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.
The summer also saw the Environment Agency announce that the performance of England’s nine water and sewerage companies had fallen to its lowest level since its assessments began in 2011, prompting it to call for action such as higher fines for deliberate pollution.
The largest percentage (£80 million) of the £150 million fine will be returned to consumers 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’ spending. 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 all 17 water companies will be able to increase bills by the rate of inflation as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), thus offsetting any reduction. In August, the annual rate of CPIH stood at 8.6%.
Households should expect the changes to their bills in 2023-24.
David Black, chief executive of Ofwat, said: “When it comes to meeting the wishes of their customers, too many water corporations are failing and we are asking them to return around £150 million to their customers.
“We expect companies to improve their performance every year. Where they fail to do so, we will hold them to account.
“All water corporations will need to regain consumer and public acceptance and we will continue to challenge the sector to do better. ”
Warren Buckley, director of visitor entertainment at Thames Water, which has 15 million visitors, said: “Last year we saw a significant easing in the overall number of court cases against the company following improvements in our visitor service, as well as like a 39% relief in source outages over the past year. two years.
“We can confirm that the financial penalties incurred will be refunded to customers as part of their normal bills and set out clearly on the bills. Adjustments to household bills will be announced next year.
“We’re determined to do better, and while we’re heading in the right direction, we know there is a long way to go.”
Water companies must meet shared and individually tailored yearly targets. They were last set at the most recent price review in 2019, and will remain in place up 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 45p extra tax rate for those earning £150,000 a year will not happen now.
Mr Kwarteng is due to attend the Conservative Party convention in Birmingham later today.
In his social media statement, Mr Kwarteng said: “It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.
“As a result, I pronounce that we will proceed with the elimination of the 45p tax rate. We perceive and we listen.
Several senior Conservative MPs, including former ministers Michael Gove and Grant Shapps, have been highly critical of the proposed abolition, putting pressure on the Chancellor and Liz Truss, the Prime Minister, who defended the measure. yesterday.
Following the “mini-budget” budget released on Friday 23 September by Chancellor of the Exchequer Kwasi Kwarteng, the Treasury today issued an explanatory note explaining how the government’s questionable expansion plan will be carried out, 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 was speculation that the Bank would be forced to take unforeseen emergency measures to prop up sterling after it took a beating in Asian markets and hit a 50-year low against the US. Monday morning.
Taken together, the statements from the Treasury and the Bank look like a concerted effort to calm markets, with commentators concerned that negative reaction to Friday’s statement is having a deeply damaging effect on the UK economy.
The Treasury says ministers will announce detailed measures in October and early November, including changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure.
In October, the Chancellor will outline regulatory reforms to ensure the UK’s financial services sector remains globally competitive. On Friday, he raised hackles in some quarters by abolishing the cap on banker bonuses (see coverage below).
There will be another one through Mr Kwarteng – called the medium-term fiscal plan – on November 23. It will provide more detail on the government’s regulations for managing its finances, adding that it will ensure debt falls as a proportion of gross domestic product over the medium term.
He said he would stick to ministerial spending agreements for the existing spending 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 their complaint on Friday by redoubling efforts to cut taxes, saying additional adjustments would be made to the tax formula in a bid to breathe life into the expansion at a trend rate of 2. 5% a year.
Increases in stamp duty allowances and income tax deductions at source figured prominently in today’s monetary policy from Chancellor of the Exchequer Kwasi Kwarteng, MP.
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 details of how the increase to National Insurance Contributions (NICs) imposed earlier this year will be reversed from 6 November. And the planned introduction of an income tax levy to fund health and social care in April 2023, which would have replaced the temporary NICs hike, will no longer happen (see story below).
Kwarteng said the government would pursue economic expansion at an annual rate of 2. 5% and claimed 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 the expansion in the third quarter would likely be negative as well.
Two consecutive quarters of negative expansion are a sign of recession.
To boost growth, the government is proposing around 40 new low-tax investment zones across England and says it will work with devolved governments in Scotland, Wales and Northern Ireland to expand the scheme across the country.
The planned increase in corporate tax from 19% to 25%, scheduled for April 2023, has been scrapped. The chancellor said the move would keep the rate lowest in the G20 organization.
Kwarteng is also removing the cap on bankers’ bonuses to inspire the expansion of the money sector. The cap stipulates that a bonus cannot be more than twice a banker’s salary without the consent of shareholders.
Below are the main themes of today’s event:
The Chancellor has unveiled a package of cuts to Stamp Duty Land Tax (SDLT) in England and Northern Ireland, with immediate effect. Scotland and Wales have their own property acquisition tax regime.
The SDLT zero rate band (the threshold below which you do not want to pay stamp duty) will double from £125,000 to £250,000. This means that 200,000 more people a year can buy space without paying any wealth tax, according to Kwarteng.
Given the previous rate of 2% charged between £125,000 and £250,000, it means the maximum that can be saved 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 exemption 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 big increase from 7%. He claims that within an hour of the announcement, traffic to his site 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.
Reaction to today’s SDLT relief announcement has been mixed. Tomer Aboody, director of property lender MT Finance, said: “The Stamp Duty relief will bring the buzz back to the housing market by helping first-time buyers get on the ladder, allowing them to offset the higher cost of mortgages with the savings.”
But other commentators have warned that the cuts will increase space costs as dealers raise selling costs more, knowing that buyers are saving elsewhere.
Ben Merritt, director of mortgages at Yorkshire Building Society, said: “Instead of focusing solely on tax cuts, it’s crucial we look at finding other solutions specifically for downsizers – those looking to move into smaller properties – to try and stimulate a stunted market.”
Building society studies show that while 19% of homeowners who want to downsize see stamp duty as an obstacle to moving, nearly a quarter (23%) say it is an inadequate source of adequate housing preventing them from moving.
However the Chancellor said he intends to tackle property supply shortage by ‘increasing the disposal of surplus government land’ on which to build new homes.
Help to Buy, a government scheme that provides a share-linked loan of up to 20% of the property price, applies to new-build properties.
Kwarteng announced adjustments to the Universal Credit (UC) scheme designed to inspire more applicants to work.
The administrative source of income threshold (the amount CU recipients will have to earn before moving from the intensive job search plan to the Light Touch plan) will be higher than its current price of £355 per month for Americans or £567 per month for couples.
The new threshold, which builds on an increase already planned for September 26, will be 15 hours per week with the national living wage for Americans (around £617. 50 per month) and 24 hours per week (around £988 per month). month) for couples. It will come into force from January 2023.
As a result of this change, around 120,000 Universal Credit claimants will be transferred to the Intensive Job Search Scheme, which requires them to take steps such as attending appointments with a painting trainer and submitting applications for tasks. ‘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.
Reforms will need to be pushed to replace the regulatory pension rate cap – the maximum amount of explained contribution that occupational pension schemes can qualify non-paying savers for. Lately, commissions amount to 0. 75% of the managed budget.
With this reform, the government aims to encourage pension funds to invest in innovative UK businesses while spurring higher returns for 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 to introduce 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.
In relation to the move the Chancellor said: “To support growth right across the country, we need to go further, with targeted action in local areas.
“We are going to cut taxes. For companies located in designated tax zones, for 10 years there will be accelerated tax relief for structures and buildings and 100 percent tax relief for eligible investments in plant and machinery.
Businesses in these locations will benefit from full Stamp Duty relief for land and buildings for commercial use or residential development.
The indexed governments are:
The Chancellor announced further backing for schemes that support investment in start-up businesses and an increase in the Company Share Option Plan (CSOP), which allows firms to offer employees share options.
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 scheme year on 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 constant percentage option plan limit will also double in April 2023, from £30,000 to £60,000 per individual director or employee.
Ahead of Friday’s mini-Budget, the Chancellor has announced that the 1.25 percentage point increase in National Insurance contributions (NICs) introduced last April, and partially reduced in July, will be fully reversed in November.
The government says most workers will get relief on their NICs through November payroll. Some will get it in December or January, depending on their employer’s payroll software.
The NIC payment thresholds which were raised in July to remove 2.2 million lower-paid workers from paying any NICs will remain in place at today’s levels. For people on pay of less than £12,570, this means they will still not pay any tax on their earnings.
The higher NIC rates were due to return to 2021-22 levels in April 2023, when a separate Health and Social Care Levy was due to take effect, adding 1.25% to income tax bills.
Chancellor Kwasi Kwarteng MP has now pulled the plug on the Levy, which would have raised £13 billion annually. However, he has said funding for health and social care services will be protected and will remain at the same level as if the Levy were in place.
The costs will be met from general taxation.
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 will no longer pay. pay. one point higher than the employer’s national insurance.
The Chancellor’s tomorrow, dubbed his “growth plan”, is expected to verify that tax rate rises on dividends will be scrapped from April 2023.
Income tax on dividends was increased by 1.25 percentage points in April 2022 so that those receiving dividend income also helped fund health and social care. Removing the increase will, says the government, save those who pay tax on dividends an average of £345 next year.
A survey of 4,963 families by the Office for National Statistics confirmed that 90% of Britons are seeing their costs of living rise, and that four out of five adults are concerned 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 survey participants how their household finances have been affected over the past seven days. He discovered :
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. .
Details are awaited on the Energy Price Guarantee, announced by the Prime Minister on 8 September, in particular on aid to businesses. We already know that the Guarantee will limit average household expenses to £2,500 per year for two years from 1 October. .
The chancellor is also expected to announce a series of tax reduction measures and a reduction in social security contributions.
Britain’s monetary regulator has finalized stricter regulations for the marketing and promotion of high-risk investments, writes Andrew Michael.
Under its new, more robust set of rules, the Financial Conduct Authority (FCA) says that firms approving and issuing marketing material “must have the right 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, firms also “need to use clearer and more prominent risk warnings”. In addition, certain incentives to invest, such as ‘refer a friend bonuses’, have now been banned.
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 U. K. government confirms by law how crypto marketing is incorporated into its remit, it will publish final regulations on the promotion of crypto assets.
They adhere to the same technique as other high-risk investments.
FCA chief executive Sarah Pritchard said: “We need other people to invest with confidence, perceive the threats at hand and get the right investments for them and that reflect their appetite for threats. “
“Our new simplified threat warnings are designed to help consumers better perceive threats; Businesses also have a vital role to play. When we see that products on the market do not include the correct threat warnings or are not clear, unfair or misleading, we will take action,” Pritchard added.
Nathan Long, senior analyst at investment platform Hargreaves Lansdown, said: “With an understanding of client behaviour, the FCA is making pragmatic adjustments to the rules to crack down on retail investors buying high-risk investments. “
Long added: “There has rightly been a focus on understanding consumers when making decisions. “
Companies that offer pre-paid funeral plans will be regulated by the Financial Conduct Authority (FCA) from today, offering greater protection to customers.
Funeral plans are designed to cover the early costs of cremation or burial, so that your family walks away with the bill after your death. Packages can be paid for in advance, in the form of a lump sum, or in monthly installments of between one and 10 years.
Regulation will ban firms from cold calling potential customers, and from making commission payments 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 regulations also include funeral schemes under the Financial Services Compensation Scheme (FSCS), meaning consumers can now claim their cash refund up to £85,000 if a supplier goes bankrupt, while the Financial Ombudsman Service (FOS) will be able to be appealed. ) if a visitor feels that they have not been treated through a provider.
Complaints can be made about issues that occurred prior to FCA regulation, provided the supplier is registered with the Funeral Planning Authority (FPA) at the time.
Most of the market is 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, FCA’s executive director of licensing, said: “We have worked tirelessly to assess funeral service providers, as a component of our licensing process. We are pleased that 87% of the market is now regulated.
“With our new regulations in place, consumers will be older when they want it most. “
The FCA advises consumers to check whether their supplier has been authorised. If not, they contact the provider to ask about their plan.
UK regulator, the Financial Conduct Authority (FCA), is introducing rules designed to protect customers from being ripped off and to ensure they are treated fairly and get the support and service they need.
The FCA says its new customer obligation “will fundamentally record the way businesses serve their customers. It will establish stricter and clearer criteria for customer coverage in all monetary facilities and require businesses to put their customers’ wishes first. “
It will require firms to:
Among the effects of the new requirements, which will be phased in from July 2023, will be firms being obliged to offer all customers their best deals, rather than using them to tempt new customers. This rule is already in place for car and home insurance.
The opposite will also be true, as corporations will want to offer their offerings to new customers.
The Duty is made up of a general precept and new regulations that will make it possible for consumers to obtain communications they can understand, products and facilities that satisfy their desires and offer fair value, and to gain visitor benefits they want, when they want it.
The FCA says the new environment will most likely foster innovation and competition. It says it will be able to identify practices that are not generating the right results for consumers and take action before those practices conform to market norms.
FCA’s Sheldon Mills said: “The current economic climate means it is more vital than ever for consumers to be able to make sound money decisions. The money facility industry wants to provide Americans with the data they want and put their consumers first.
“Customer responsibility will generate a major upgrade of financial services and promote the festival and expansion based on the highest standards. As Duty raises the bar for the companies we regulate, it will spare you some damage and allow us to act more temporarily and hopefully when we run into new problems.
Households suffering financially due to the worsening life crisis do not seek help due to a lack of understanding or feelings of shame.
According to a report published 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 contact them had done because they thought they were ’embarrassing’.
The study also found that two in five (40%) people with financial problems wrongly believed that speaking to a debt counselor would have a negative effect on their credit report.
Other reasons for not being able to cope with money problems included doubts about the price of contacting lenders, with 20% believing it would be futile, and negative perceptions about potential outcomes, with 18% fearing they would waste access to existing credit and 16% worried. about having access to 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 percent) of financially distressed borrowers waited more than a month before getting help, and of those, 53 percent regretted not doing so 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 are suffering financially, the most important thing is to tell someone. If you are worried about not being able to make your payments, tell your lender as soon as possible, as they may be able to offer you affordable features to pay off what you owe.
Debt counseling charities like StepChange or Turn2Us are also independent and free, and contact will damage (or even be visual) 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 come against the backdrop of a political crisis in which two of the top members of the government’s cabinet – Chancellor of the Exchequer Rishi Sunak and Health Secretary Sajid Javid – resigned due to a lack of confidence 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 pound.