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October’s top debt and money news
Payday loans were certainly a hot topic recently, when it was revealed that short-term lending giant Wonga admitted it had double-charged thousands of customers by mistake. Mortgage customers may also be due some compensation due to charges for late payments.
On a brighter note, the minimum wage for young people has risen. Also, we had lots to say this month about overdrafts and the costs they can often incur. Overdrafts can often cost more in fees than payday loans. Rachel Reeves, Labour MP for Leeds West and a member of the Treasury Select Committee, stopped by our Medium blog to explain why unarranged overdraft charges should be capped.
Wonga’s double-charge woes
Wonga, the UK’s biggest payday lender, recently announced that it double-charged around 7,000 of their loan customers.
According to this article from the BBC, the extra payments were taken from bank accounts because of a system error. Wonga have made assurances that the rogue payments will be refunded and they’ll also cover any extra costs or charges that result from their mistake.
MP Rachel Reeves calls for more to be done on overdraft charges
Rachel Reeves, Labour MP for Leeds West, recently shared her thoughts on our Medium blog about overdraft fees and the difficulties they can cause in people’s lives.
The MP, who’s also a member of the Treasury Select Committee, said that people who regularly find themselves in their overdraft “are already in difficulty, trying to manage debt day to day…the banks should have a responsibility to help manage their finances, and to help them out of the cycle of debt, rather than pushing them deeper into crisis with extortionate charges.”
Rachel also discussed the issue on You and Yours on BBC Radio 4.
Young people on minimum wage receive a raise
Workers aged 16-24 were given a wage rise on 1 October, as this article from the Daily Mirror reports.
21-24 year olds are set to see hourly rates rise to £6.95, the wage for 18-21 year olds will rise to £5.55, and for 16-17 year olds it’ll rise to £4. Guy Stallard, director at KPMG UK said: “It is important we tackle the issue of low wages for the younger generation, and this is a good first step towards achieving this.”
Critical shortage of rental homes in the UK
The Royal Institute of Chartered Surveyors (Rics) claim that the UK is facing a critical shortage of homes to rent. It predicts that by 2025, at least 1.8m more households will consider renting rather than buying a home.
As mentioned in this article from the BBC, Rics has called on the government to offer tax breaks which will hopefully encourage building and more investment in the sector.
Mortgage customers due compensation for late fee charges
The Guardian recently reported on the compensation due to some mortgage customers after some lenders made mistakes in the way they collected arrears.
The Financial Conduct Authority (FCA) highlighted that many lenders had technical glitches in their systems. This meant that some lenders had included payments for the arrears with regular mortgage payments, while also collecting payments for the arrears separately. This could have meant lenders were being charged with unnecessary fees.
Mortgage holders with charges as far back as June 2010 could be due a redress as a result.
BrightHouse profits hit by detailed financial checks
High street rent-to-own firm BrightHouse claim that having to carrying out more detailed checks on shoppers’ finances has affected its profits.
The company is seeking to bring its practices in-line with regulations set in place by the FCA. According to the Guardian, the regulatory body recently voiced concern about practices in the ‘rent-to-own’ sector, specifically how affordability checks are carried out and how customers who fall behind on payments are treated.
Money’s too tight to mention, kids
Less than a third of British parents are able to make regular savings for their children because money’s so tight.
This recent article from This is Money reveals British parents try to save around £45 per month but many fall short of this target. Research by Nationwide claims that only 29% of parents save every month, while around half can only do so occasionally. Around one in 5 said they weren’t saving anything, with most of them saying they couldn’t afford to.
StepChange Debt Charity has frequently called on the Government to introduce new ways to save, such as auto-enrolment in a savings scheme, to help people protect themselves if they suffer a sudden drop in their income or an emergency expense.
Let’s do… breakfast
You’ve probably heard us talking about the benefits of making your own lunch to take to work many, many times. Not only is it cheaper, but it can be healthier too.
Well now it seems more and more people are choosing to buy breakfast before work too (how do they find the time?). The BBC reported on the latest trend to go for a leisurely breakfast before heading off for a day’s work. From croissants and fry-ups to porridge and pancakes, the breakfast market is on the rise.
And while it all sounds rather lovely, we’re a bit stuck in our money-saving ways of eating breakfast at home. Would you pay for breakfast before work?