Monthly Debt News looks at debts and the causes of debts in Britain from various sources selected for professionals to make the debt sector simple.
This month’s Debt News includes DWP overpayment mistakes - the cost of living bites - homeowners trapped in high interest - opposition leader renegades on student fees - household time bomb - ethnicity and car hire insurance premiums - bite-size stats.
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The DWP is chasing the poorest for millions of pounds of its own mistakes - but one mum fought back (ITV X)
A single mum of two disabled children has fought back against the government after it tried to force her to pay more than £8,000 in benefits debt over its own mistakes.
More here: link
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Belfast food bank adds evening opening as cost-of-living crisis bites.
A food bank in Belfast has described the pressure it faces as a "tidal wave approaching".
More here: Link
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The people trapped paying 8% interest on their mortgages: 'I lie awake at night and I'm petrified all the time'
Homeowners paying over 8% interest on mortgages they can't switch away from say "relentless" rate rises over the past year have destroyed their mental health and left them living as "hermits".
More here: Link
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UK opposition Labour leader likely to scrap free university pledge
The leader of Britain's main opposition Labour Party Keir Starmer said on Tuesday he is likely to scrap his pledge to provide free university tuition, blaming economic circumstances for the probable u-turn.
More here: Link
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Households in debt time-bomb, says Citizens Advice
Fears of a "debt time-bomb" have been raised by Citizens Advice, which said growing numbers of households faced a "wild west" when seeking help.
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Household finances: Govt To Issue Blanket Ban On Financial Cold Calls
The government announced today that all cold calls offering financial products will be banned to protect consumers from scams, writes Bethany Garner.
More here: Link
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More here: here
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Bite size stats:
19.1% Increase in the price of food and drink in the year to March 2023, the fastest rate in over 45 years. (Money Charity)
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70% Percentage of Buy Now Pay Later users reporting that they are paying through this means as a direct result of the cost of living crisis (Money Charity)
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There were 29,017 individual insolvencies in England and Wales in Q1 2023, 517 fewer than in the previous quarter. The most significant increase since the current series began in 2010 was seen between Q2 2020 and Q3 2020. (Bank of England)
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Public sector net borrowing (PSNB ex) in March 2023 was £21.5 billion, £16.3 billion more than in March 2022, and the second-highest March borrowing since monthly records began in 1993 (ONS)
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(April 2023)
Monthly Debt News looks at debts and the causes of debts in Britain from a variety of sources selected for professionals to make the debt sector simple
This month’s Debt News includes rise in broadband, mobile phone and council tax costs - FCA’s support guidance for existing mortgage borrowers - Ofgem call evidence on prepayment meters - Citizens Advice on bailiff research - CIVEA responds to Citizens Advice research - Bitesize stats - mortgage borrowing reduced - company insolvencies increase - breathing space increase - gas and electricity arrears increase.
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Broadband, mobile bills and council tax rises threaten ‘awful April’ for householders already facing a cost of living crisis
Households battling the cost of living crisis are facing an onslaught of price hikes that could leave the average family hundreds of pounds a year worse off.
From April 1, millions will face increases to their broadband, mobile, water and council tax bills.
More here: Link
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Guidance for firms supporting existing mortgage borrowers impacted by rising living costs
FCA set out how mortgage lenders can help customers worried about, or already struggling with, their mortgage payments because of rising living costs. We also summarise feedback to our draft general guidance.
More here: Link
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Ofgem launches national evidence call on prepayment meters
Ofgem and Citizens Advice are launching a national evidence-call to ask energy customers to share their experiences of moving to a prepayment meter (PPM).
The eight-week partnership is a key part of Ofgem’s comprehensive market review of prepayment meters and remote switching, to ensure suppliers meet their legal obligations in protecting customers.
More here: Link
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Citizens Advice researches on bailiff behaving badly stories from the front line
With costs soaring over the last 18 months, 1 in 4 people (27%) have fallen into debt.
This has seen over 2 million people being contacted by bailiffs during the cost-of-living crisis. But rather than help people get back on track, intimidating behaviour and huge fees charged by bailiffs have pushed many households further into debt and left some afraid to answer the door or even leave their homes.
More here: Link
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CIVEA responds to poorly interpreted Citizens Advice research on civil enforcement
Responding to research based on surveys by Citizens Advice, Russell Hamblin-Boone, chief executive of the Civil Enforcement Association, said: “CIVEA is disappointed to read today’s statement from Citizens Advice and will be interested to understand how this data was gathered and interpreted.
More here: Link
Bite Size Stats:
Net borrowing of mortgage debt by individuals decreased from £2.0 billion in January to £0.7 billion in February, the lowest level since July 2021 (£1.8 billion of net repayment). (Bank of England)
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The number of registered company insolvencies in February 2023 was 1,783. 17% higher than in the same month in the previous year (1,518 in February 2022), and 33% higher than the number registered three years previously (pre-pandemic; 1,345 in February 2020). (Insolvency Service)
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There were 7,312 Breathing Space registrations in February 2023, which is 26% higher than the number registered in February 2022. (Insolvency Service)
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Average debt level where there is no arrangement to repay the debt (arrears for electricity in Q3 2012: £440 (electricity) and £445 )(gas). In Q3 2022: £1036 (electricity) £807 (gas) (Ofgem)
(March 2023)
Monthly Debt News looks at debts and the causes of debts in Britain from a variety of sources selected for professionals to make the debt sector simple
This month’s Debt News includes extended energy bill support - FCA expects the debt sector to implement consumer duty - students in debt - Surrey Council insolvent - Bitesize stats.
Energy bill support to be extended as price rise looms.
Support for energy bills from the government is expected to continue for three months from April, protecting consumers from an average increase of £500. Sky News understands the chancellor will cancel a reduction in support that would have seen typical annual bills rise from £2,500 to £3,000.
More here: Link (Sky)
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FCA wrote to COA/Director on 21 February of Debt Advice Portfolio to implement the Consumer Duty for the Debt Advice Portfolio
Consumer Duty is a significant shift in our expectations of firms. It introduces a more outcomes-focused approach to consumer protection and sets higher expectations for the standard of care that firms give customers.
More here: Link (FCA)
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Student loans: A third of university students plunge into double debt in cost of living crisis, ONS survey shows
Figures published on Friday by the Office for National Statistics (ONS) showed that 30 percent of students in England have taken on new debt in the past three months, with the majority saying it was because their student loan was “not enough to support their living costs”.
More here: Link (iNews)
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Surry council on brink of insolvency with debts of nearly £2bn.
A local council in Surrey has signalled it is close to effective bankruptcy after amassing debts worth almost £2bn to fund a property investment spree, raising fresh questions over the fragile health of local authorities after years of austerity.
More on here: Link (Guardian)
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Bitesize Stats:
The proportion of UK families going without essentials due to the rising cost of living. Around 6 in 10 low-income households are not able to afford an unexpected expense, over half are in arrears and around a quarter use credit to pay essential bills. (Joseph Rowntree Foundation)
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Citizens Advice Bureaux across England and Wales answered 469,854 enquiries in January 2023, 18.4% up from January 2022. Debt was the second largest advice category in January 2023 with 79,448 issues, behind Benefits and Tax Credits (104,944). (Money Charity)
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There were 26,538 individual insolvencies in England and Wales in November to January 2023, an increase of 0.8% from 26,328 for the same period in 2022. (Money Charity)
(February 2023)
This month’s Debt News includes: *** Courts wave through warrant prepayment meter - Bailiffs forced to wear body cameras -Ofgem review customer standards of energy suppliers - DWP admits court defeat and universal credit discrimination - FCA consultation on debt packers - a spike in late payments and small businesses - Bite-Size Stats: Repossession, Consumer judgments, arrears & student debts
Articles
Exclusive: Courts waved through warrants for prepayment meter fitting
Courts waved through applications by energy firms to forcibly install prepayment meters in people's homes, according to internal advice leaked to the BBC.
Previous guidelines required careful scrutiny of warrant applications, but new advice to courts deems those rules “disproportionate".
More on the Exclusive issue: link
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Bailiffs forced to wear body cameras under new law
Bailiffs will be forced to wear body cameras to protect vulnerable people struggling with debt, the Government has announced. The move is aimed at safeguarding households from “rogue” debt collectors who deploy threatening behaviour on their visits to squeeze cash out of families.
More on the issue: link
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Ofgem review reveals that customer service standards of energy suppliers must improve
On Thursday 2 Feb 2023, energy regulator Ofgem has published supplier ratings from its fourth ‘deep dive’ into energy supplier standards. The Market Compliance Reviews are proactive, market-wide assessments of energy suppliers’ performance on key areas.
More on the issue: link
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DWP admits court defeat after universal credit discrimination led to suicide thoughts
The Department for Work and Pensions (DWP) has admitted repeatedly breaching the Equality Act, after a disabled man was left needing hospital treatment three times for suicidal thoughts caused by months of failures by universal credit advisers and jobcentres.
More on the issue: link
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FCA consults on debt packager referral fees ban
The Financial Conduct Authority (FCA) has opened a consultation into a proposed ban on debt packager referral fees from debt solution providers, as part of its work to protect consumer outcomes.
The consultation will remain open until 2 March, during which time the FCA will update its analysis on the market. If the proposals are implemented, the measures would end the current debt packager business model.
More on the issue: link
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Small Business Survey reveals true effects of late payments on SME owners
A survey jointly conducted by two leading UK Debt Collection agencies has revealed the true extent of the effects of late payment on the nations local Small Business owners. There has been a spike in late payments to Small Businesses across the UK as the economy continues to remain unstable in the post pandemic era.
More on the issue: link
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Bitesize Stats
Repossession: UK Finance estimates that there were 700 homeowner properties taken into possession in the UK in Q3 2022, up from 420 in Q3 2021(Money Charity)
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Consumer Judgements: The total value of consumer judgments has seen an increase of 44% this quarter, from £355 million in Q3 2022 to £512 million in Q4 2022. This increase is the highest as compared to the past four quarters. (Register Trust Ltd)
Consumer judgments have seen an increase of 59% in the average value, from £1,833 in Q3 2022 to £2,923 in Q4 2022 (Register Trust Ltd)
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Arrears: According to the Financial Conduct Authority, at the end of Q3 2022 there were 150,462 mortgage loan accounts with arrears of more than 1.5% of the current loan balance (Money Charity)
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Student Debt: In England, the average debt for the latest (2020/21) cohort to enter repayment was £45,060, an increase of 12.6% on the previous year (Money Charity)
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(January 2023)
Monthly Debt News looks at debts and the causes of these debts in Britain from a variety of sources selected for professionals to make debt simple.
PERSONAL DEBTS:
New DWP figures out today show 107,000 families are facing escalating costs as winter bites with their benefits capped. 56,000 have kids aged under five. And more than 32,000 of these capped families (over 110,000 children) are also subject to the two-child limit policy according to new FOI-based estimates from the Nuffield Foundation-funded Benefit Changes and Larger Families project.
More on this issue by CPAG: Link
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Sharp increases in the cost of living, coupled with a real-term fall in wages and existing Christmas spending pressures are causing high levels of financial anxiety, according to the December 2022 Money Statistics, produced by The Money Charity.
More on this issue by Money Charity: Link
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The Bank of England’s Monetary Policy Committee has today voted to increase interest rates to 3.5 percent, a rise of 0.5 percentage points. Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said:
“Households are under pressure from all directions as the sustained impact of high food, fuel and energy costs continues to stretch peoples’ budgets to the limit. And with interest rates rising further, this will only add to the worries of millions of people as we head towards the New Year.'
More on this issue by Money Advice Trust: Link
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BITE-SIZE STATS:
- The average total debt per household, including mortgages, was £65,746
- 38.2 mortgage possession claims and 26.2 mortgage possession orders were made every day in England and Wales in April to June 2022
- 200 landlord possession claims and 157.4 landlord possession orders were made every day.
More of on the above data from the Money Charity: link
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