Debt and money news – August 2016

posted by in Debt Law, Economy

August is often referred to as the ’silly season’ for news stories, where the papers are full of whimsical stories.

That hasn’t stopped this month also being jam-packed full of goings-on in the world of debt and money news.

Bank of England reduce the base rate of interest

This is pretty big news. After rumblings in the recent past about the Bank of England’s base rate of interest rising, we actually saw the rate cut from 0.5% to 0.25%, after seven years of no change.

Why does this matter? Well, when the Bank of England cuts its base rate those with mortgages tracking the base rate will see their payments go down and it will also usually lead to variable rate mortgages reducing as well, leading to cheaper housing costs.

There are reports of some companies cutting rates by more than the base rate change to compete for new customers.

Make healthy food cheaper

If you’re shopping on a budget then you may have noticed that it’s often cheaper to buy junk food than it is to get decent fresh food. This is made worse by special offers that bring down the cost of sugary and fatty food.

Consumer group Which? have called for supermarkets to focus their price offers on healthier food to help with the battle against obesity. They did an analysis of food promotions and found that 53% of deals were for unhealthy food. So I can now blame supermarkets for my ever-expanding waistline!

London in the Red

We made the news this month too, with our London in the Red report which revealed that people in London are disproportionately likely to need our debt help than those living outside the capital. They also have higher debt balances, higher arrears on their essential bills and tighter budgets.

The research prompted our CEO, Mike O’Connor, to say:

“The streets of London are more likely to be paved with debt than with gold.”

Phone scam scheme

We hate scams! So we’re pleased to see that there’s a new scheme being launched to protect vulnerable people from being cold-called by scammers. The Fuss Free Phones scheme is aimed at helping the elderly by having someone screen their calls from unfamiliar numbers.

Elderly people receive 50% more nuisance calls than the general population, so it’s good to see that there are schemes set up to help with this problem. Whether it’s worth the £20 a month cost is another matter though.

A cap on unauthorised overdraft charges

This month also saw the Competition and Markets Association (CMA) publish their recommendations for changes to the UK banking system. Among other recommendations, they decided banks will have to set a cap on their overdraft charges.

We felt that these recommendations don’t do enough and we want to see more effort to get rid of excessive overdraft charges. A cap on overdraft charges is a necessary step but we think it should be set by the Financial Conduct Authority, the banks’ regulator, rather than the banks themselves.

One in three families’ savings wouldn’t last a month

One in three families are a month’s pay away from losing their home, according to research from Shelter. The worrying findings say that 37% of working families don’t have enough saved to pay for more than a month if one person in the household lost their job.

Government statistics back up this research, as they say that 16.5 million working-age adults don’t have any savings at all. It’s an issue that we’re acutely aware of;  we want to see schemes developed to help encourage people to save.

Companies paying less than minimum wage

The Government published a list of almost 200 companies that have failed to pay the minimum wage to their employees. Care homes, restaurants and two professional football clubs were included in the list.

There’s no excuse for employers to not pay the minimum wage, not to mention that it’s illegal. If you think you might be being paid under the minimum wage there’s some advice on what to do on the Citizen’s Advice website.

Bad neighbours could cost you more than sleepless nights

There are any number of ways a neighbour can annoy you. Whether it’s noisy parties, vacuuming in the middle of the night, arguments in the street or blocking your driveway, it can be tough when you’ve got inconsiderate neighbours. It could also end up costing you thousands of pounds.

Research by Prestige Insurance revealed that troublesome neighbours could knock up to £37,000 off the value of an average house. Noisy neighbours were seen as the most costly, followed by those with messy gardens, with botched DIY jobs also having potential to impact the value of nearby houses.

That’s it for this month’s debt and money news. Want to get the latest news and much more delivered to your inbox every month? Sign up to the MoneyAware email to keep yourself up to date.

James Winterbottom has been a debt advisor for six years. Away from work he is an amateur app developer and writes fiction. James is a lifelong supporter of Huddersfield Town football club, which suggests he is either very loyal or very daft. He also likes to talk about himself in the third person in bio pages.

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