City regulator reduces number of loan agreements in line for compensation from 14m to 12m
Victims of the car finance scandal will be in line for payouts worth £830 on average, as the City regulator tightened the rules of its compensation scheme to cover fewer contracts.
The Financial Conduct Authority (FCA) released the final details of its planned redress programme, saying it had narrowed the number of loan agreements eligible for payouts from 14m to 12.1m contracts.
Continue reading...Law firm is preparing claim on behalf of 30,000 consumers who fear the FCA’s redress scheme will shortchange them
Lloyds Banking Group is facing a court battle with 30,000 aggrieved car loan customers who are to abandon the City regulator’s official redress scheme amid fears it will shortchange consumers and favour lenders.
The claims law firm Courmacs Legal is planning to file a £66m omnibus claim on behalf of borrowers who believe they were financially harmed by car loan contracts set up by Lloyds’ motor finance arm, Black Horse.
Continue reading...Average arrears for housing, utilities and council tax for low-income households all rose last year
High levels of debt on essential bills have become the “new normal” for many low-income households, the charity StepChange said on Monday, with average arrears for housing, utilities and council tax all going up last year.
People’s budgets have been stretched in recent years as they have faced higher prices for many goods and services, and the crisis in the Middle East has led to concerns over a new wave of increases.
Continue reading...City minister Lucy Rigby acts after woman faced repossession of house burned down by controlling husband
A woman who was nearly killed by her abusive husband has been invited to advise the government on measures to support victims of financial abuse after the Guardian highlighted her story last weekend.
Francesca Onody was left homeless and penniless when her husband doused their cottage with petrol while she and her two children were inside. Her husband, Malcolm Baker, died when the property exploded.
Continue reading...Those on typical £200,000 mortgages taken out between October 2020 and February 2023 may see costs jump by £3,996 a year this winter
More than 350,000 households who locked in to low-interest fixed-rate mortgages five years ago are expected to see their costs jump this winter as they reach the end of their deals.
Analysis by the bill management app Nous found almost half of mortgages taken out between October 2020 – as the housing market revived after an initial Covid shock – and February 2023 were five-year fixed-rate deals.
Continue reading...Some higher-earning couples with smaller deposits could borrow extra £130,000 as a result of overnight changes
Some couples applying for a Santander mortgage will see the maximum they can borrow increase by £130,000 overnight after the bank loosened its lending rules.
Santander is the latest in a line of lenders to allow some borrowers to access bigger mortgages after intervention by the City regulator and new guidelines from the Bank of England designed to help more people on to the housing ladder.
Continue reading...City watchdog publishes details of its plans to regulate the BNPL market, which has now grown to £13bn
Lenders may have to carry out affordability checks on even the smallest buy now, pay later loans under new rules drawn up by the City watchdog.
The Financial Conduct Authority (FCA)on Friday published details of its plan to regulate the £13bn buy now, pay later (BNPL) market.
Continue reading...Lenders’ routine purging after six years means details of some car buyers due compensation may have been lost
Consumers are at risk of losing £1bn of compensation over inflated car loans because high street banks and specialist lenders deleted their data, claims lawyers have warned.
Borrowers, banks and the government are anxiously awaiting a ruling from the supreme court that could spark one of the biggest redress schemes since the £50bn payment protection insurance (PPI) saga.
Continue reading...Despite the decision to hold at 4.5%, businesses and households can take a confident view of the UK’s prospects
Bank of England policymakers might be on a “go-slow” as they look forward to interest rate cuts this year, but the direction of travel is almost certain.
After a meeting on Thursday when interest rates were kept on hold at 4.5%, City investors bet there would be more reductions in the cost of borrowing this year, most likely two cuts reducing the rate to 4%.
Continue reading...Analysts forecast bank will have to halve £2bn buyback plan, as ex-boss of City regulator blames watchdog for crisis
Lloyds Banking Group could give almost £1bn less to shareholders this year as a result of the car finance crisis, analysts have said, as the City regulator’s former boss blamed the watchdog for the chaos.
The estimated size of a multibillion-pound compensation bill for motor lenders has grown after a shock court of appeal ruling last Friday, which said customers could not consent to motor loans that involved “secret commission” payments to brokers and car dealerships.
Continue reading...Energy crisis panel warns country is ‘dangerously unprepared’ and must shift away from gas quickly
Britain is at risk of experiencing a repeat of the sharp increase in energy costs which has fuelled the continuing cost of living crisis because it relies too heavily on gas, according to an expert panel of industry leaders.
The Energy Crisis Commission has warned that the UK is still “dangerously underprepared” for another crisis because it continues to rely on gas for its power plants and home heating.
Continue reading...Students are exempt during their course but as soon as they finish their final year they are liable to pay
Final-year university students have been urged to check that they do not owe council tax for the last few weeks of their rented accommodation.
While students are exempt from the tax during the course, they are liable to pay as soon as they finish their final year.
Continue reading...Banks may follow suit after UK weather-related claims on home insurance reach new high
Britain’s biggest building society has stopped granting mortgages on some properties where there is a high risk of flooding but said this affected only “a very limited number” of homes.
Nationwide’s head of property risk, Rob Stevens, said the lender used mapping technology to identify which homes were vulnerable to flooding, and it would decline to grant a mortgage to buy a property it deemed to be at high risk.
Continue reading...Lenders forecast biggest quarterly increase in missed repayments on credit cards and loans since 2009
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Britain’s biggest high street lenders expect the sharpest rise in defaults on unsecured lending since 2009, according to a Bank of England survey, as households come under growing pressure amid the cost of living crisis.
The figures from Threadneedle Street show banks expect a marked rise in the number of people who fail to meet repayments on credit cards, loans and other forms of unsecured borrowing over the next three months.
Continue reading...About 2.7m will have to choose between buying food or presents as cost of living crisis bites
Millions of people will have to make stark financial choices this Christmas including choosing between buying food or presents and be unable to afford to keep their homes warm through the festive season, according to new research by National Debtline.
About 6.5 million people will struggle to heat their homes sufficiently this festive season, while 2.7 million will have to choose between buying food or presents, highlighting the drastic impact the cost of living crisis continues to have on household budgets.
Continue reading...Citizens Advice warns such credit schemes risk delivering ‘knockout blow’ to household finances
More than a quarter of adults in the UK will use buy now, pay later to help with festive spending, research suggests, with the proportion rising to more than half of parents with young children.
The survey for Citizens Advice also found 11% of respondents used such credit schemes to pay for groceries, a proportion that rose to 35% for regular BNPL users.
Continue reading...Payments group and TV shopping channel change small print after financial regulator steps in
The City regulator has taken action after finding that customers of two leading buy now, pay later providers were “at risk of harm” because of potentially unfair and unclear small print.
The US-based online payments group PayPal and the TV shopping channel QVC have changed the terms of their contracts after the Financial Conduct Authority (FCA) expressed “concern” over the impact to customers.
Continue reading...Jump in borrowers unable to make payments with landlords particularly hit and ‘worse to come’
Mortgage arrears jumped by 13% in the second quarter of the year to the highest level since 2016, according to Bank of England figures that underscore the stress in the UK mortgage market.
Rising interest rates and unemployment over recent months have put pressure on household disposable incomes, forcing some families to cut or suspend their monthly mortgage payments.
Continue reading...Finance firms defend credit deals as ethical but health experts warn of spiralling public indebtedness
Patients who face long NHS waiting lists and cannot afford to go private are being encouraged to sign up for “buy now, pay later” (BNPL) deals and other personal loans to cover the costs of basic healthcare.
The deals allow people to spread payments over months or years in exchange for rapid access to treatments and tests, including MRI scans, X-rays and routine surgery.
Continue reading...Rate is at highest level since last November, and average two-year fix is now 6.47%
A typical five-year fixed mortgage deal in the UK now has an interest rate of more than 6%, putting further pressure on borrowers who are hoping to buy a home or reaching the end of their existing deals.
Data from the financial information firm Moneyfacts shows the cost of a five-year deal for homeowners rose to 6.01% on Tuesday, up from 5.97% on Monday. It is the highest level since last November, after mortgage rates had been driven up by the mini-budget chaos of last autumn.
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