Category Archives: Money

Lloyds bank profits plunge by 26% as lender prepares for bad loans

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Larger-than-forecast drop to £1.5bn in third quarter came despite rising interest rates

Profits at Lloyds Banking Group dropped by 26% in the three months to September, as the UK’s “deteriorating” economic outlook forced it to put aside nearly £670m to protect against potential defaults on loans and mortgages.

Lloyds, which owns Halifax and is the country’s largest mortgage lender, said pre-tax profits had tumbled to £1.5bn in the third quarter, down from £2bn during the same period last year. That was larger than the 9.5% fall to £1.8bn that analysts had predicted.

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Starmer ‘should bring in workplace pension for the self-employed’

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Fabian Society also says Labour needs to be radical and introduce better provision for the lowest paid

Sir Keir Starmer should promise that a future Labour government would introduce a new workplace pension for self-employed workers and more generous retirement provision for the low paid, a leading left-of-centre thinktank has said.

Calling for the biggest shake-up of the pensions’ system in two decades, the Fabian Society said Labour needed to copy the radical approach of the Turner Commission two decades ago, which encouraged saving through opt-out schemes.

Increasing the minimum contributions for workplace auto-enrolment pensions to 12% of total earnings from the current 8%. This would be done by phasing in higher contributions from employers over time.

The introduction of new pension credits for carers, who are primarily women, to reduce the “gender pensions gap”

Changes to how people access pensions at retirement so that separate pensions are automatically consolidated into a single fund and then converted into new whole-of-retirement pension plans designed to increase with inflation.

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White House urges borrowers to apply for student debt relief despite court order

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Federal appeals court temporarily halts Biden’s cancellation of student debt after motion brought by six Republican-led states

The Biden administration is urging student loan borrowers to continue applying for debt relief despite a federal appeals court order late on Friday that temporarily halted this program.

“[This] temporary order does not prevent borrowers from applying for student debt relief,” White House press secretary Karine Jean-Pierre said in a statement following the eighth circuit court of appeals’ temporary stay.

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UK housebuilder Bellway expects sluggish sales as interest rates rise

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Company warns that next 12 months will be tougher, with economy likely to go into recession

The UK housebuilder Bellway has said demand for houses has moderated since the summer and it expects the number of sales to be roughly flat over the next year against a backdrop of rising interest rates and a deteriorating economy.

The company completed a record 11,198 homes in the year to 31 July, up 10.5% on the previous year, as a booming housing market drove £3.5bn of revenues, up 13% and also a record.

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Broadband customers face up to 14% hike in bills, warns Which?

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BT customers face £113 rise as providers such as EE and TalkTalk prepare controversial ‘inflation-plus’ mechanism

Broadband bills could surge by as much as £113 next year if a number of the UK’s biggest telecoms firms push ahead with inflation-busting price increases next spring, says consumer watchdog Which?

Many of the country’s main internet providers – including the largest player BT, along with TalkTalk, EE, Plusnet and Vodafone – use a mechanism to increase the cost of bills annually by the rate of inflation as measured by the consumer prices index (CPI) in January, plus 3.9%.

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Five million UK families ‘face mortgage rising by £5,100 a year by end of 2024’

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Increase adds up to a £26bn rise for homeowners, says Resolution Foundation thinktank

More than five million families could see their annual mortgage payments rise by an average of £5,100 between now and the end of 2024, heaping fresh pain on households already struggling with higher food and energy bills.

The increase adds up to a £26bn mortgage rise for homeowners, according to the analysis by the Resolution Foundation thinktank which said nearly a fifth of British households would have to spend more on their housing costs by the end of 2024.

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Poorer families risk £1,000 hit from earnings-related benefits rise

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Below-inflation rise would save exchequer tenth of £40bn to be given out through tax cuts, says thinktank

If the government raises benefits in line with earnings rather than inflation next year, it would drastically cut the incomes of poorer working-age families, while saving less than a tenth of the cost of recent tax cuts, a leading economic thinktank has calculated.

Such a change, which would mean a significant real-terms cut given that wages are rising at 5.5% with inflation close to 10%, could see the effective income of some families reduced by up to £1,000 a year, the Resolution Foundation said.

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UK’s 13-year housing market boom to end in 2023, surveyors predict

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RICS report says rise in repossessions will add to supply while soaring interest rates price buyers out of market

Homeowners will struggle to make mortgage repayments and repossessions will rise next year as soaring interest rates and falling prices mark the end of the UK’s 13-year housing market boom, according to a sobering report from the Royal Institution of Chartered Surveyors (RICS).

The number of inquiries from potential homebuyers fell for a fifth month in a row in September, while sales fell to the lowest level since May 2020 when the housing market all but ground to a halt during the early stages of the coronavirus pandemic, it said.

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Rise in UK borrowers falling behind on mortgage payments, says Santander

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Boss says bank is putting aside more money for potential defaults linked to cost of living crisis

The boss of Santander UK says the bank is putting aside more money for potential defaults linked to the cost of living crisis after seeing a pickup in customers falling behind on mortgage and loan payments.

Mike Regnier told the Guardian that he was keeping a close eye on the “strain and pressure” facing customers as a result of the cost of living crisis, which has made it harder for some households to keep up with rising food and energy bills and financial commitments such as home loans.

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Older people at risk from overcharging and mis-selling ‘scandal’

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Unnecessary policies and overpayments for services are draining the accounts of vulnerable customers

Elderly and vulnerable customers are being routinely overcharged by utility and insurance firms in a hidden scandal highlighted today by one of the country’s senior financial services executives. Unfair practices are putting them at risk of being unable to afford food and heating, he warns.

Michael Donald, a former director of Visa UK, said he was staggered to discover hundreds of pounds of overcharging when he carefully checked the direct debits on his 79-year-old mother’s accounts.

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Truss ‘considering plans to send childcare cash to parents’ in England

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PM said to be planning shake-up of subsidy system whereby parents, rather than nurseries, get cash to spend as they see fit

Liz Truss is said to be considering a shake-up of the childcare subsidy system whereby parents, rather than nurseries, would be given government cash to spend as they see fit.

At present, all three and four-year-olds in England are entitled to 15 hours’ free childcare a week during term time, while some families can claim up to double that amount.

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Kwarteng considers extending mortgage guarantee scheme

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Initiative may continue beyond December as bank bosses raise concerns over mortgage market

The chancellor is considering extending the government’s mortgage guarantee scheme after UK bank bosses raised concerns over the state of the UK’s mortgage market at a high-level meeting at No 11 Downing Street.

The meeting on Thursday – which was attended by chief executives including Alison Rose of NatWest, Charlie Nunn of Lloyds Banking Group, HSBC UK’s Ian Stuart, Mike Regnier of Santander and TSB’s Robin Bulloch – was scheduled amid mounting fears about the potential fallout from rapidly rising mortgage rates.

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UK drivers for Bolt ride-hailing app pursue worker benefits claim

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Lawyers acting for more than 1,600 drivers say they have been wrongly classed as self-employed

More than 1,600 UK drivers working for the ride-hailing app Bolt are seeking compensation for missed holiday and minimum wage payments as they argue they have been wrongly classed as self-employed contractors.

Lawyers for the drivers have written to the government-backed workplace conciliation service Acas, in the first stage of lodging the claim against Bolt.

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IFS: Millions in Britain ‘face stealth tax raid’ under Liz Truss’s plans

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For every £1 given workers by cutting tax rates £2 was being taken via freeze on income tax thresholds, thinktank calculates

Millions of households are facing a “stealth” tax raid under Liz Truss’s government despite her promise to support workers through the cost-of-living crisis by lowering their tax bills, Britain’s leading economic thinktank said on Wednesday.

The Institute for Fiscal Studies (IFS) has calculated that for every £1 given to workers by cutting headline tax rates, £2 was being taken away through a freeze on the level at which people begin paying tax on their earnings.

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Battersea power station: timeline of a modern classic

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Begun in 1929, the building was a collaboration between architects Theo Halliday and Sir Giles Gilbert Scott

Battersea power station was built in two phases, as a collaboration between the architects Theo Halliday and Sir Giles Gilbert Scott.

Halliday was responsible for the overall shape and the interior.

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Kwasi Kwarteng set to address Tory conference with authority on the line after 45% tax rate U-turn – UK politics live

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Chancellor expected to give changed address after confirming plan to axe top rate of income tax has been scrapped

Q: Where does this leave your credibility?

Kwarteng says he has been in parliament for 12 years. He says ministers do sometimes change their minds.

I decided, along with the the prime minister, not to proceed [with the policy].

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‘UK travel is on sale’: plunging pound attracts US visitors

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Operators catering for inbound tourists enjoy best month for bookings in three years

The plunging pound may cause British holidaymakers to choke at the prices if and when they next choose to go abroad. But one slice of the travel industry is seeing a silver lining in the storm clouds.

Tour operators catering for visitors are quietly calling it their best month for bookings since October 2019 as US tourists take advantage of sterling’s tumble.

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Buy-to-let landlords facing financial cliff edge after mini-budget

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Mortgage market meltdown has left many amateur landlords facing a stark choice: to raise rents or sell up

Britain’s amateur landlords have benefited from years of runaway house price inflation, while intense competition among tenants has sent rents soaring. Now, thanks to the meltdown in the mortgage market triggered by last week’s disastrous mini-budget, many face a financial cliff edge.

Figures shared with the Guardian show that the number of new buy-to-let mortgage deals available has plummeted by 55% in less than a week as lenders frantically pulled products and in many cases increased prices.

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Homeowners warned of ‘significant’ rise in UK interest rates

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Bank of England’s chief economist speaks out after mini-budget, with financial markets expecting rates to reach up to 6%

Britain’s homeowners have been warned to brace themselves for a “significant” increase in interest rates from the Bank of England in response to Kwasi Kwarteng’s tax-cutting mini-budget last week.

Huw Pill, Threadneedle Street’s chief economist, added to the concerns of millions of mortgage payers who have already seen hundreds of home loan products pulled by lenders in anticipation of a big increase in the cost of borrowing.

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Mini-budget 2022: pound crashes as chancellor cuts stamp duty and top rate of income tax – live

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Tax cuts to cost Treasury around £37bn in 2023-24, official figures reveal

There are no urgent questions in the morning, and so Kwasi Kwarteng, the chancellor, will be delivering his statement soon after 9.30am.

The Commons starts sitting at 9.30am, but they always begin with prayers in private, and so Kwarteng will be up a few minutes later.

The last time they did it one third of the beneficiaries were people buying second homes or buy to let, so we are sceptical that this is the magic bullet to increase homeownership. What we really need to do is to build more houses and to help get people onto the property ladder by increasing the supply of housing.

When this has been done before, it has often fuelled an already hot market and many of the beneficiaries have been people buying a second or third home, rather than the first time buyers that we really want to help who are often trapped in private rented accommodation where they’re paying as much in rent every month as they would in a mortgage.

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