Unexpected bills, payday loan complaints and debates over credit card limit increases were all hot topics in money and debt related news this month.
In brighter news, for those hoping to get on the property ladder, chartered surveyors predict that house prices may fall over the next three months – the first fall in six years. And the final design for the new £5 note has also been revealed, and tests show that these new notes can withstand the washing machine much better than their predecessors!
The ‘opt in or opt out’ credit card debate
We recently called on the Financial Conduct Authority (FCA) to stop unrequested credit card limit increases.
We surveyed our clients and found that 54% of credit card users said they’d had a credit card limit increase they didn’t ask for. We think that people shouldn’t be given access to extra credit they didn’t ask for, especially when they haven’t decided whether or not they can afford it.
- 49% of those who had their limit increased said it made their debt problems worse
- 11% said that when they asked for help with financial difficulty, their creditor responding by increasing their limit
You can read more about credit increases in our Medium.com article.
Unexpected bills create unexpected stress
As part of a Daily Express article on savings, we warned of the dangers of unexpected bills pushing people into debt.
In similar news, a YouGov survey for The Times revealed that a third of professionals would have to turn to credit for a surprise £500 bill. One of our danger signs of debt is having to rely on credit to cover emergency costs.
Our Senior Public Policy Advocate, Joseph Surtees said:
“Everyone lives with the prospect of unexpected bills, but for many struggling households, the consequences can be severe. If every family had £1,000 in savings, it would prevent half a million of them from falling into problem debt.”
On-going call for ‘breathing space’
We recently repeated our call for the introduction of a statutory ‘breathing space’ scheme following results of a client survey. Our clients often tell us that interest and charges make their debt problems harder to deal with and many experience this even though their creditors know they’re in financial difficulty.
You can read more about this issue in our recent article on Medium.com.
House prices are ‘expected to fall’ in the short term
Chartered surveyors have predicted a short-term drop in UK house prices over the next three months, according to this article from the BBC.
The price drop will be the first in more than six years. Members of the Royal Institution of Chartered Surveyors (Rics) cited factors such as the EU referendum and a cool-down in the market due to changes to stamp duty last April.
Energy billing errors: “4 million households overcharged”
According to this article from The Telegraph, almost four million UK households have been overcharged by their energy supplier due to mistakes on their bill.
The total overpaid is estimated “to be almost £300m”. The most common billing error was caused by suppliers applying the wrong tariff details to a household’s account.
Payday loan complaints nearly triple, despite new controls
The Financial Ombudsman recently revealed that complaints about payday loans have risen by 178% in the year to March.
As mentioned in this article from the BBC, there were over 3,000 complaints about short-term loans in 2015/16. This is almost three times as much as the year before. New controls on payday lenders were brought in by the Financial Conduct Authority (FCA) in January 2015, and many payday lenders have actually left the market as a result of these controls.
The new ‘Churchill Fiver’ is revealed!
The final design for the new Bank of England £5 note has been unveiled, as reported by The Telegraph earlier this month.
The new note will feature the face of Sir Winston Churchill and will be printed on a sturdy plastic material called polymer. This will be the first ‘plastic’ bank note of its kind to be printed in the UK and will be issued into national cashflow on 13 September.
Fans of the 19th century novelist Jane Austen will be pleased to know that her face will grace similarly-designed £10 notes from sometime in 2017.