Tag: personal finance

Shoppers to be protected by new Buy-Now, Pay-Later rules

  • Providers will have to ensure lending is affordable – stopping users from accumulating unmanageable debt  
  • Rules deliver better protection for shoppers and clarity for innovative sector after years of uncertainty

Millions of shoppers are set to be protected by new rules for Buy-Now, Pay-Later products.  

Buy-Now, Pay-Later products have become increasingly popular in recent years as they allow people to spread the cost of purchases over time, but users currently do not have access to a range of key protections provided by other consumer credit products.  

The Government has today launched a consultation on proposals to fix this by bringing Buy-Now, Pay-Later companies under the supervision of the Financial Conduct Authority (FCA) and applying the Consumer Credit Act, ensuring users receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise.  

Economic Secretary to the Treasury Tulip Siddiq said: “Millions of people use Buy-Now, Pay-Later to manage their finances, but the previous government’s dither and delay left them unprotected.

“We promised to take action before the election and now we are delivering. Our approach will give shoppers access to the key protections provided by other forms of credit while providing the sector with the certainty it needs to innovate and grow.”

The new rules will allow the FCA to apply rules on affordability – meaning that Buy-Now, Pay-Later companies will have to check that shoppers are able to afford repayments before offering a loan, which will help to prevent people building up unmanageable debt.

Companies will also need to provide clear, simple and accessible information about loan agreements in advance so that shoppers can make fully informed decisions and understand the risks associated with late repayments.

Consumer Credit Act information disclosure rules will be disapplied so that the FCA can consult on bespoke rules that ensure users are given this information in a way that is tailored to the online setting in which Buy-Now, Pay-Later products are generally used.    

Buy-Now, Pay-Later users will be given stronger rights if issues arise with products they purchase, making it quicker and easier to get redress. This includes applying Section 75 of the Consumer Credit Act, which allows consumers to claim refunds from their lender, and access to the Financial Ombudsman Service to make complaints. 

Rocio Concha, Which? Director of Policy and Advocacy, said: “Which? has been a leading voice calling for the regulation of Buy Now Pay Later for years so it’s positive that new rules are coming in that should provide much-needed protections for users of these products.

“Our research found that many BNPL customers do not realise they are taking on debt or consider the prospect of missing payments, which can result in uncapped fees, so clearer information about the risks involved as well as the use of affordability checks and options for redress would be a win for consumers.

“We are keen to see legislation quickly passed to ensure that BNPL users are protected as strongly as consumers using other credit products.”

Sebastian Siemiatkowski, Co founder and CEO of Klarna, said: “Congratulations to Tulip Siddiq and the government on moving quickly!

“They have been working with the industry and consumer groups long before coming into office. We’re looking forward to carrying on that work to put proportionate rules in place that protect consumers while fostering growth.”

Michael Saadat, International Head of Public Policy at Clearpay said: “We welcome today’s update from City and FinTech Minister, Tulip Siddiq, on BNPL regulation.

“It is encouraging that HM Treasury has listened to industry feedback and evolved the previous framework to ensure a more proportionate approach to regulation.

“We have always called for fit-for-purpose regulation that prioritises customer protection, delivers much-needed innovation in consumer credit and that sets high industry standards across the board.

“We will continue to support the Government and the FCA to deliver fit-for-purpose regulation that ensures consumers are protected in a way that supports the UK’s thriving FinTech sector.”

Chris Woolard, Author of the 2021 Woolard Review, which looked at change and innovation in the unsecured credit market, said: “Today marks a significant milestone for consumer-focused financial regulation.

“The proposed package of regulation would implement the recommendations of the Review and mean millions of people up and down the UK will benefit from stronger financial protection as they borrow using BNPL, especially the most vulnerable in society. The incoming regulation will also provide long-term certainty and standards for the market.”

The consultation will be conducted quickly – closing on 29 November – to reflect the urgent need for action to protect consumers.  

Final legislation is expected to be laid in Parliament in early 2025. Once the legislation is laid, the FCA will finalise the rules so they can take effect in 2026 – bringing clarity to the sector after years of uncertainty about how it will be regulated.  

This follows the Prime Minister saying he would remove regulation that needlessly holds back investment and growth. Today’s announcement brings in much needed regulation that stops people spiralling into debt.

Justin Basini, Co-Founder and CEO of The ClearScore Group said: “We welcome this consultation to bring Buy-Now, Pay-Later borrowers under the same protections and creditworthiness assessments as other mainstream financial products such as credit cards and loans.  

“It is a sensible step in ensuring that this new, important form of credit continues to provide much-needed flexibility for consumers while also managing any risks.”

New guide helps Scots seniors safeguard their finances as online scams soar

With statistics this year from Age Scotland showing that over 400,000 older people living in Scotland have been targeted by scammers, it has never been more important to protect yourself and others from falling victim to fraudsters. Crimes include crypto currency, scam text messages and fake phone calls or emails impersonating trusted organisations such as banks. 

While a rapid rise in cases were seen across all age groups, older people are particularly more susceptible. Incidences of fraud crime against this age demographic in Scotland are rising, as scammers take advantage of their relative unfamiliarity with technology, and potentially more trusting nature.  

To mark International Day of Older Persons on 1st October, Scottish charity the Cyber and Fraud Hub has relaunched its Older Person’s guide to encourage older residents to be vigilant when it comes to online scams.

Originally produced by the Cyber and Fraud Centre Scotland, A Guide to Avoiding Fraud and Scams for Older People addresses some of the most common forms of cyber and fraud crime, and will be distributed through local community networks as well as being available online.  

The guide aims to empower older adults to navigate the digital landscape safely and securely, and provides insights into common online scams, identifies red flags to watch out for, and outlines steps to take in case of suspected fraud.

The Cyber and Fraud Hub is the first charity of its kind in Scotland, offering comprehensive support tailored specifically to individuals affected by cyber and fraud crimes. The Hub is built on strong relationships with Police Scotland and the banking sector, and its mission is to ensure that members of the public across Scotland receive the support they need when they are most vulnerable.  

Since the Cyber and Fraud Hub launched, the team has dealt with around £250k of crypto frauds across all age groups and stopped or prevented around £60k from being transferred to fraudsters. Victims of crypto currency scams usually engage with individuals who are unknown to them through unsolicited approaches on WhatsApp, Facebook or dating apps, for example, or click on links by AI generated celebrities supposedly promoting crypto scams.  

Other common scam and fraud attempts affecting older people most commonly include telephone scams, banking scams, WhatsApp family and friends impersonation scams, parcel delivery scams and investment and pension scams.  

Alex Dowall, Head of Fraud and Cyber at the Cyber and Fraud Hub, said: “Anyone of any age can fall victim to a scam and fraud attempts are on the increase for all age groups, however we have noticed a huge increase in scammers repeatedly targeting older people.

“The Hub was launched to offer Scotland’s only dedicated cyber support for all members of the public. We understand that our older residents are less likely to access online and social media platforms, so we are encouraging people to have a conversation about our guide with their older friends, family and neighbours to empower them to be as vigilant as possible against fraud and scam attempts.”  

International Day of Older Persons raises awareness of opportunities and challenges faced by ageing populations, and to mobilise the wider community to address difficulties faced by older people.

While the day focuses on many issues, Cyber and Fraud Hub urges older people to:  

  • Be cautious of unexpected calls, emails, or letters.  
  • Never give out personal information over the phone or email.  
  • Be suspicious of any offers that sound too good to be true.  
  • Shred personal documents before throwing them away.  
  • Talk to someone you trust about your finances.   

To access the guide, visitthe Resources section on the Cyber and Fraud Hub at cyberfraudhub.org.

Anyone who finds themselves a victim of a cyber or fraud crime can call the incident response helpline on 0808 281 3580. 

Nearly half of British adults expect fall in standard of living

  • Energy prices and cost-of-living crisis top list of financial concerns
  • Women are more concerned about external factors, such as a recession, impacting their finances
  • People plan to increase time spent reviewing their finances due to rising costs

Nearly half (46%) of UK adults are worried that their standard of living will fall over the next 12 months, reveals research conducted on behalf of Handelsbanken Wealth & Asset Management. 

Concern was highest among those in their 30s (55%), dropping to 38% of over 50’s – likely due to accumulated savings.

Despite recent declines, energy prices still top people’s biggest concerns on the factors threatening their living standard, along with the cost-of-living crisis and high prices caused by inflation.

External risks worry women more

Women are more concerned than men about most external risks to their finances, including inflation (79% versus 72%), rising interest rates (59% versus 52%) and a recession (83% versus 73%). However, men worry more about geopolitical instability (57% versus 50% women) and stock market volatility (42% versus 37% women), with the latter perhaps due to being more inclined to invest, the research also revealed.

Divided on death and divorce

Men are more concerned about losing wealth through divorce (24% versus 19%), whereas women are more likely to fear the financial impact of their partner or spouse dying (47% versus 42%).

Proportion of people concerned about various factors impacting their personal finances

FactorOverall proportion of individualsWomenMen
Energy prices78%80%74%
The cost-of-living crisis / recession78%83%73%
Inflation76%79%72%
A global economic downturn63%63%63%
Rising interest rates55%59%52%
Income tax increases54%56%53%
Geopolitical instability53%50%57%
Scams and frauds51%56%46%
Death of a partner / spouse45%47%43%
Stock market volatility40%42%37%

Time invested

The study showed that these concerns are changing how much time we spend reviewing our finances each month.

On average, consumers spend over six hours a month on their finances, with groceries and other household costs taking up the most time (52 minutes) followed by bank account management (48 minutes), and paying for holidays (42 minutes). Wealthier people with assets over £100k spend longer keeping their financial house in order, averaging eight hours a month. Men, meanwhile, typically spend around 20% longer than women.

A tougher financial climate means we expect to spend more time managing our finances overall, largely in response to dealing with rising costs and stubborn inflation (48%) and the need to save more money (41%).

When it comes to those looking to decrease their time investment, nearly a third (29%) said they plan to reduce the time spent looking at their financial affairs as it makes them feel too anxious.

This may go some way towards explaining the fact that a significant proportion of people don’t currently spend any time at all reviewing commitments such as their pensions (33%), insurance (31%) or investments (23%).

Alasdair Wild, Area Manager at Handelsbanken Wealth & Asset Management, said: “Dealing with the ongoing cost-of-living and keeping your finances in check can be a time-consuming process and a real challenge for most people given there only are so many hours in the day. 

“However, doing the bare minimum is unlikely to offer much protection in such a tough financial climate, and investing time to plan and manage your finances and, when required, bringing in external professional support, can make a real difference to protecting your standard of living.

“While avoiding the issue may provide temporary relief, it will only exacerbate problems down the line, so seeking support is key.”

Click here to view the full research report Gender and generation: unravelling the wealth gap.

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Cash injection for millions as National Insurance cut hits payslips

  • Millions of workers checking payslips tomorrow will see a tax cut
  • As the economy turns a corner, the government is rewarding hard work, with over £900 a year boost for typical worker
  • Marks another step in long-term ambition to end unfair double tax on work

There are 27 million employees in the UK, and today [Tuesday 30 April] millions of them on monthly salaries will wake up with a little more cash in their pockets, as the UK government’s Spring Budget cut to National Insurance appears in April’s pay-packets.

Since Autumn 2023, National Insurance Contributions (NICs) for workers have been slashed by a third – the largest cut to employee and self-employed NICs in history.

The main rate of employee National Insurance has been cut for 27 million workers from 12% to 8%, saving the average employee on £35,400 over £900 a year. An average full-time nurse will save £1053, a typical junior doctor £1508 and an average teacher £1270.

These cuts are possible because the economy is turning a corner, thanks to the government’s decisive action that has helped bring inflation down from 11.1% to 3.2% and ensure borrowing costs start to fall. Because of this progress, the government can now cut taxes to reward work and grow the economy.

This marks another step towards the longer-term ambition to end the unfair double tax on work and abolish employee and self-employed NICs altogether.

These tax cuts – worth over £20 billion a year – have been achievable while protecting spending including keeping the Triple Lock and the government has commitment to going further only when it’s possible to do so.

Prime Minister Rishi Sunak said: ““At the start of last year I made to pledge to half inflation. And because of the difficult decisions we have taken, inflation has more than halved and we are now able to reward work, and cut taxes for millions of workers who are seeing the benefit in their pay checks today.

“We have now cut National Insurance by £900 because it’s unfair that workers pay double tax on their income. We need to make it much simpler and much fairer and we are going to continue cutting this tax until it’s gone – while continuing to protect pensioners with the triple lock and providing record levels of funding to the NHS.”

Chancellor of the Exchequer Jeremy Hunt said: “We’re on the right track – we’ve been able to slash National Insurance to return hundreds of pounds back into the pockets of hard-working Brits because of the decisions we’ve made to manage the economy responsibly.

“Over the years ahead we want to get rid of National Insurance completely for workers – it is an unfair double tax on work and we’ve shown we can protect spending on public services while eliminating it.”

The tax cuts to date mean that for single individuals on average salaries, personal taxes would be lower in the UK than every other G7 country, based on the most recent OECD data.

The smart nature of the tax cuts will also help grow the economy by bringing more people into the labour market. The Office for Budget Responsibility (OBR) expects that, as a result of these combined cuts, total hours worked will increase by the equivalent of almost 200,000 full-time workers by 2028-29.

To mark the record cuts to NICs, HMRC launched an updated online tool earlier this month to help people understand how much they personally could save in National Insurance this year.

These cuts to reward work follow a raft of changes that came into force on 1 April and could save households up to £3,850 a year to help those struggling with cost-of-living while igniting the economy.

This includes a record increase in the National Living Wage from £10.42 an hour to £11.44, and a 12.3% drop in energy bills from the previous quarter.

In addition, households can benefit from a separate increase to the Local Housing Allowance that will mean some of the poorest families on either Universal Credit or Housing Benefit will gain £800 a year on average.

Who does this help?

The combined cuts to National Insurance mean:

  • A ‘hard-working’ family with two earners on the average salary of £35,400 each will be better off by £1,826.
  • An average full-time nurse on £38,900 will be better off by £1,053.
  • A senior nurse with five years experience on £42,618 will be better off by £1,202.
  • The average police officer on £44,300 will be better off by £1,270.
  • A cleaner working night shifts on £21,058 will be better off by £340.
  • A typical junior doctor on £65,000 will be better off by £1,508.
  • A typical self-employed plumber on £34,361 will be better off by £846.
  • The typical teacher on £44,300 will be better off by over £1,270.

Scottish Building Society commits to passbook accounts

SCOTTISH Building Society has doubled down on its commitment to offering Edinburgh customers passbook accounts, in a bid to support them with their financial needs.

With more than 67 percent of Scottish Building Society members across Edinburgh holding a passbook, they will continue to have access to the account, which can play a crucial role in helping them to manage their finances.

The move comes after several major banks across the UK announced they would be removing passbooks, which provide a paper record of banking transactions, from their services.

Recently Virgin Money announced it would remove passbook savings accounts, resulting in 100,000 customers across the UK being told they will no longer be able to use them to pay in or withdraw cash in person.

Despite several banks now no longer offering the service, Scottish Building Society believes passbooks still have an important role to play in helping customers manage their finances.

Feeling reassured by physical evidence of how much they hold in their accounts many customers prefer to bank this way to manage their finances.

The rise in the cost-of-living crisis has prompted many people to revert back to using physical money in a bid to help them budget, with passbook savings accounts serving as a valuable tool in helping them to manage this.

Removing this service alongside many local branches closing risks leaving many customers feeling alone, particularly during this economic climate Scottish Building Society warned.

Scottish Building Society has made significant investment in its high street branches to provide accessible banking for all and enhance its physical presence in communities, with the society most recently opening a new relationship centre in Edinburgh in June last year.

Meanwhile, as part of its 175th anniversary celebrations, the building society launched the Scottish Building Society Foundation in May last year, an initiative designed to give back to Scottish communities with an incredible £175,000 designated to local charities and good causes across Scotland.

Paul Denton, CEO at Scottish Building Society, said: “As a mutual organisation owned by and run for the benefit of our members, we want to make sure we are providing customers with everything they need to manage their finances in a way which is easy for them and stress free.

“While online services are the main stay for a lot of customers, there is a large portion of people who are not confident in using online banking or simply don’t want to, and they can rightly feel aggrieved that they are facing the prospect of having to do so.

“At Scottish Building Society our purpose is to serve the local community, and this is why we will continue to offer passbooks as a vital tool for customers, as well as investing in our branches to provide accessible, in-person facilities which will serve their local communities. Simply put, we want to ensure our members have choice when it comes to managing their finances, and we believe in offering them that.”

Lisa McKay, Edinburgh Relationship Manager, Scottish Building Society, said: “”At Scottish Building Society we understand how important it is for members to have options, which works for them, for managing their finances. For many, this means having a physical passbook which helps them keep up to date on their accounts. 

“Our passbook savings accounts can be a really useful tool in this regard and that’s why we are committed to continuing them. If you are interested in learning more about how passbook savings accounts, please give us a call or visit your local branch and we will be happy to support.”

Income tax changes today

People urged to check their tax code as new financial year begins

Progressive changes to Scottish income tax will raise valuable revenue for investing in public services, Deputy First Minister Shona Robison has said.  

From today (Saturday 6 April 2024) a new Advanced income tax band will apply a 45% rate on annual income between £75,000 and £125,140. An additional 1pence will be added to the Top rate of tax meaning income over £125,140 will be taxed at 48%.

There are no changes to the Starter, Basic, Intermediate and Higher tax rates for earnings under £75,000. The Starter and Basic rate bands will increase in line with inflation and the Higher rate threshold will be maintained at £43,662.

The independent Scottish Fiscal Commission estimates that overall income tax will raise £18.8 billion in 2024-25.

Scottish taxpayers are being encouraged to check to ensure the tax code on their first payslip in the new financial year is accurate. People paying Scottish income tax should have a tax code that begins with an S.

Deputy First Minister Shona Robison said: “Scotland has the most progressive income tax system in the UK. The new Advanced band builds on that progressive approach, protecting those who earn less and asking those who earn more to contribute more.

“Only 5% of Scottish taxpayers will pay a higher tax rate this year compared to last year and the majority of taxpayers are still paying less than they would elsewhere in the UK.

“The money raised through income tax allows people in Scotland to benefit from a wide range of services and social security payments not provided elsewhere in the UK, including free prescriptions and free higher education. Council tax is less in Scotland than in England, even before factoring in a council tax freeze for 2024-25.

“I encourage everyone to check their first payslip in April to make sure their address is correct and that their tax code starts with an ‘S’. This will ensure that people are paying the right amount of tax on their income.”

The Scottish Fiscal Commission estimates that the cumulative impact of Scottish Government income tax policy decisions since 2017 will raise an additional £1.5 billion in 2024-25, compared to the position if UK Government tax policy had been matched during that time.

The new Scottish income tax bands and rates for the financial year 2024-25 are:

 2024-25
BandRate
Starter£12,571 – £14,87619%
Basic£14,877 – £26,56120%
Intermediate£26,562 – £43,66221%
Higher£43,663 – £75,00042%
Advanced£75,001 – £125,140*45%
TopAbove £125,14048%

Policies related to National Insurance Contributions and the Personal Tax Allowance remain reserved to the UK Government. Scottish Ministers continue to call for further tax powers to be devolved so decisions affecting the people of Scotland are decided by the Scottish Parliament.

The UK Government confirmed in the 2023 Autumn Statement that the UK-wide Personal Allowance will remain frozen at £12,570.

*Under the UK Government’s Personal Allowance policy, those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.

Virgin Money and Good Things Foundation team up to support millions of households facing digital exclusion

Virgin Money and the UK’s leading digital inclusion charity, Good Things Foundation, have teamed up to help millions of people facing digital exclusion across the nation by introducing the National Databank programme into Virgin Money’s full network of stores.

Latest data1 compiled by Good Things Foundation shows that although 77% of people in the UK believe having internet access is an essential need, 1 in 14 households have no home internet access at all, more than 2.5 million households struggle to afford broadband and 10.2 million people lack the most basic digital skills to use the internet.

Aiming to help reduce the digital divide, Virgin Money – the first and only bank in the UK to take part in the programme – has worked with Good Things Foundation to introduce the National Databank2 into its 91 UK stores.

The National Databank works like a foodbank, but provides free mobile data, texts and calls for people in need. Through the programme, which was founded by Good Things Foundation and Virgin Media O2, digitally excluded people (anyone that doesn’t have regular access to the internet) can visit their nearest Virgin Money store and pick up an O2 sim card loaded with 20GB of free data – enough for around 220 hours of internet browsing per month. The free data allowance renews every month for six months.

Good Things Foundation has also provided specialist training to the bank’s customer service colleagues to help them better identify and support individuals impacted by digital exclusion and signpost them to a nearby National Databank, whether it is a Virgin Money store or not. In addition, through a range of initiatives colleagues across the bank will help to raise awareness and secure donations to Good Thing Foundation’s National Device Bank programme, which works alongside the National Databank to provide free smart devices to people who are unable to afford them. 

Finally, to help bridge the digital skills gap, Virgin Money and Good Things Foundation will work with Learn My Way, an online digital skills platform, to provide training to anyone looking for help to improve their knowledge of using the internet. The sessions, which can take place both in store and online, will cover various topics, including advice on how to stay safe when browsing and information on how to access essential online services.

James Peirson, General Counsel & Purpose Officer at Virgin Money, said: “Digital exclusion is a real issue in the UK and one that needs prioritising.

“For many low or no-income households, paying for broadband is often seen as a luxury that they can’t afford, but in reality, it is an essential purchase – especially in this digital age. That’s why we are proud to support the vital work of Good Things Foundation by making the National Databank programme easier for people in need to access across the UK.

“We are also keen to encourage other organisations that are in a position to help to join the initiative. Whether that’s by becoming a National Databank themselves or donating their old smart devices that would otherwise go to waste.

“Each small gesture goes towards making a huge difference, and by working together we can try put an end to the digital divide.”

Helen Milner OBE, Group CEO, Good Things Foundation, said: “We’re delighted to help tackle digital exclusion by extending our partnership with Virgin Money to make the National Databank available to its full network of 91 stores.

“There are still 2 million households that struggle to afford internet access in the UK today, and 10 million adults lack the most basic digital skills. We need to act now.

“We urge organisations to apply to become a National Databank and become part of our National Digital Inclusion Network, helping local communities access data, devices and digital skills through the National Databank, the National Device Banks, and the Digital Skills platform Learn My Way.

“By the end of 2025, our ambition is to engage 1 million people helping them benefit from the digital world and support 5,000 Digital Inclusion Hubs across the UK. Together we can fix the digital divide.”

For details of Virgin Money store locations, visit: Store Finder | Virgin Money UK | Virgin Money UK

To find out more about Good Things Foundation or to locate the nearest community organisation taking part in the National Databank programme, visit: https://www.goodthingsfoundation.org/databank/.

Debt surge: How much are UK households saving?

Recent reports state that UK households are to face a forecasted 11% increase in credit card and loan debt in 2024, as well as warnings of a £17,600 debt surge by 2026.

In a recent study by CityIndex, UK households are saving just 3.25% of their disposable income amid the soaring cost of living crisis – a figure that is expected to change if debt levels reach their predicted peak.

The study analysed global data on household savings, including mean disposable income, mean household savings and long-term interest rates, to ultimately discover the countries with the highest household savings in the world.

Key findings:

  • UK households save an average of 3.25% of their earnings per annum.
  • Households in the United Kingdom make almost as much as those in Sweden, but they get to save three times less 
  • Switzerland leads the rating with a total savings score of 9.83/10, and the lowest mean long-term interest rates
  • Sweden stands out for lower than average long-term interest rates

The countries with the highest household savings:

 County Mean household disposable income in USD*Mean household savings in USD from disposable income*% of disposable income put toward savingsMean long-term interest ratesTotal savings score
1.Switzerland$35,311$590817%1.449.83
2.Luxembourg$40,395$30288%2.359.69
3.United States of America $42,592$29617%3.219.67
4.Chile$14,004$153211%5.199.63
5.Germany$32,997$356811%2.289.62
6.Austria$31,792$305810%2.619.55
7.Netherlands $31,304$24758%2.479.51
8.France$29,663$287610%2.629.49
9.Belgium$29,837$27789%2.759.48
10.Sweden$28,611$281410%2.559.47
17.United Kingdom$28,222$9183.25%39.26

Data is calculated between 2000-2022. *Mean household disposable income & savings are calculated per annum. Exchange rates may have an impact on the final rankings; for clarification, see the methodology.

The United Kingdom ranked 17th out of the 35 countries analyzed. While UK households have a mean household disposable income of $28,222 (£22,956), which is not far from Sweden, which made it into the top 10, only a mere 3.25% is put towards their savings. 

Amid the ongoing cost of living crisis, essential expenses like housing, utilities, and groceries are dwindling the funds available for savings.

With food prices experiencing their most rapid increase in the last 45 years and utility bills soaring, households find themselves with limited support, unsurprisingly resulting in scarily low savings rates. Furthermore, the substantial debt obligations, encompassing loans and mortgages, absorb a significant portion of the income of UK residents, especially now when mortgage rates have peaked.

Top 3 Countries With The Highest Savings Per Household 

Switzerland residents have the highest household savings with a total savings score of 9.83 out of 10. Households in Switzerland save 17% of their gross income, with $5,908 per year saved on average between 2000-2022. This is 48% higher than the neighbouring country of Austria ($3,058) in the same time period, despite having a similar population size. Switzerland also has the lowest long-term interest rates at 1.44 since 2000 — 63% lower than the long-term interest rates in Luxembourg (2.345).

Luxembourg ranks second with a total savings score of 9.69/10. The country has the second-highest household disposable income between 2000-2022 ($40,398), 35% higher than in the neighbouring country of Belgium ($29,837). Luxembourg residents have mean household savings of $3,028, with 8% of their disposable income put toward savings. Not only this, Luxembourg’s long-term interest rates stand at 2.35, which are the third lowest interest rates globally behind Switzerland (1.44) and Germany (2.28).

The US ranks 3rd, with a total savings score of 9.67 out of 10. With the dollar exchange rate taken into account, the USA has the highest mean household disposable income in the ranking  ($42,592), 45% higher than Canada ($29,442) and 3 times higher than Mexico ($14,102). CityIndex found that American residents have a mean average household savings of $2,961, with 7% of their disposable income going into their savings.

Other countries with notable savings findings  

Chile ranks fourth with a total savings score of 9.63 out of 10. Chile has one of the highest long-term interest rates (5.19) and the lowest mean disposable income at $14,004. Despite this, Chile residents manage to put 11% of their disposable income towards their savings — 3% more than Luxembourg in second place — equating to $1,532 in mean household savings.

Germany, which ranks 5th, was found to have the second highest mean household savings ($3,568), 21% higher than in the neighbouring country of France ($2,876). Not only this, but  the country has the fourth lowest long-term interest rates on the list (2.28), 19% lower than in Belgium (2.75).

Sweden stands out for lower than average long-term interest rates. The country ranks 10th, with a total savings score of 9.47 out of 10. Swedish households have a mean household disposable income of $28,611, over double that of Poland ($16,736), putting 10% of this toward their savings on average.

Sweden has a lower-than-average long-term interest rate compared to other countries in the ranking (2.55) along with impressive mean household savings ($2,814), 12 times more than Finland ($242).

 https://www.cityindex.com/en-uk/.

Consumer spending on holidays and  socialising on the rise 

• Lloyds Bank data unearths how different generations and regions spend on  making memories 

• Non-essential spending on holidays, restaurants and recreation rising

• Non-essential spending increase is slowest in London  

• Gen Z holiday spending growing quicker than Millennials and Generation X 

Non-essential spending in the UK is on the rise despite the cost-of-living crisis,  according to data from Lloyds Bank. 

Every region in the UK, including Scotland, Wales and Northern Ireland, is spending  more on non-essentials like holidays, restaurants and recreational activities but  London is the slowest-growing region for this type of spending. 

Lloyds Bank has revealed the data following the launch of its new credit card, the World Elite Mastercard®, which enables customers to earn cashback on every card purchase  made, alongside enjoying a range of travel benefits. 

With millions of customers across the UK, Lloyds Bank touches nearly every  community and household in the country. The analysis, based on card spending of  the bank’s customers, provides live insight into the state of the nation. 

Non-essential purchases – like holidays and restaurant spending – have been in  positive growth, year-on-year, since May 2021.  In 2023 alone, year-on-year non-essential spending has grown more than 3% every single month, peaking at a 10% increase in January.  

The data indicates the trend is largely being driven by wanderlust – particularly  amongst the over 65s, who have increased spending in this category by 21% in  October. Millennials (people aged 25 to 34) meanwhile, are displaying the slowest  growth among generational holiday spenders year-on-year, up 11.8%, while Gen Z  consumers (aged 18 to 24) have seen holiday spend grow 16.9% over the last  year. 

Taking a regional view, consumers in Wales are leading the charge in holiday spending – up by more than a fifth compared to last year (21.6%), while Scottish  holidaymakers and those in the South West have increased travel card spending  by 19.5% and 19.1% respectively.  

Spending from people living in London shows the slowest growth at 12.5%, with  those in the North West spending 16.5% more year-on-year.

Overall, year-on-year holiday spending is up 17.1%, restaurant spending is up 6.2% and recreational  spending is up 3.3%. 

Looking at regional growth around non-essential spending more broadly, you see London showing the  slowest growth – up just 1.8% compared to the previous year. 

Meanwhile, consumers in Yorkshire and the Humber, which is the fastest-growing region, spent more  than 6% on non-essentials when compared with the previous year and Scottish consumers also spent over 5% more. 

The data also shows that spending on restaurants and going out to socialise account for the biggest non essential spending growth across all generations and all regions across the UK in October. 

Marc Lien, Credit Cards Managing Director at Lloyds Bank, said: “Despite understandable concerns  around the cost-of-living crisis, people still want to socialise and have a holiday to look forward to.

“We’ve  come through a challenging few years, and it’s positive to see that consumer spending is on the rise.  

“After listening to our customers it’s clear that spenders up and down the country want more from their  credit and debit card providers, and this is more important than ever at times like these – that’s exactly  why we launched the Lloyds Bank World Elite Mastercard®, to provide better, more easily accessible rewards. 

“The new Lloyds Bank World Elite Mastercard® offers cashback on every card purchase – no matter how big or small – and great benefits for travellers, including the luxury of skipping airport security queues and  access to over one thousand airport lounges worldwide.” 

Customers using the World Elite Mastercard® will earn 0.5% cashback on each card purchase up to and including £15,000. When total card spending reaches over £15,000, each card purchase will earn 1% cashback, paid into the account each month. 

World Elite Mastercard® customers will also receive benefits which add a touch of luxury when travelling: 

o Access to over 1,300 airport lounges, including lounges at London Heathrow, Edinburgh  International, Orlando International, Dubai International and many more, through Priority Pass. (Owned and operated by Collinson.) 

o Cardholders will be able to skip airport security queues and upgrade their airport security  experience at participating airports, powered by DragonPass. 

o Direct access to Mastercard’s priceless.com experiences and content in the UK and around the  world. 

World Elite Mastercard® also provides one additional cardholder with all the card benefits at no extra cost to the initial £15 per month.

Cashback earned by the additional cardholder will be added to the main  cardholder’s running total, and will be included in the monthly cashback payment made to the account. 

The main cardholder will be able to view or manage their World Elite Mastercard® and travel benefits  through online banking and the mobile app.

One in five UK adults say they’ll be saving less in 2024

  • Majority of those that will be saving less blame the increased cost of consumer staples and rising energy prices
  • Young adults aged 34 and under are four times more likely to be saving more in 2024, compared to over 55s

One in five (19%) adults in the UK say they’ll be saving less money in 2024, new independent research* carried out on behalf of Handelsbanken Wealth & Asset Management shows.

For those planning to save less next year, almost two thirds (64%) said this was down to increased energy prices while the same proportion (63%) blamed the increased costs of consumer staples, such as food and other household goods. Over half (57%) agreed that high inflation was a factor too, according to the study.

This is further supported by recent data from the Office for National Statistics (ONS)**, which found that around 4 in 10 (41%) of energy bill payers are struggling to afford payments, and revealed that just under half (48%) of adults in Great Britain are using less fuel, such as gas or electricity, in their homes because of the rising cost of living.  

While 30% of British adults say their intentions are to save more next year, many are doing so to prepare for tough times in the future. More than a quarter (28%) believe they’ll need a savings ‘safety net’ due to the rising cost of living, for instance – with more women planning for this than men (32% vs. 24%). This is unsurprising, with ONS data revealing that around three in 10 (30%) were already having to dip into existing savings to meet rising costs.

The Handelsbanken data shows it is younger people who are most likely to be saving next year, with those aged 18-34 four times more likely (57%) to in 2024, compared with those over 55, at just 14%. Of those that are planning to save more, around one in five said this is because they’ll be starting a job which pays more.

PK Patel, Head of Wealth Management at Handelsbanken Wealth & Asset Management said: “With many feeling the strain after months of increased prices and increased outgoings, it’s no surprise that people are less than optimistic when it comes to augmenting their savings or maintaining their existing pots.

“But while dipping into your nest egg or saving less than usual is sometimes unavoidable, it can have lasting consequences on your long-term financial planning goals.

“It is therefore more important than ever to seek financial advice to ensure you’re putting the best plan for yourself in place, and keeping an eye on key upcoming personal finance dates, such as the ISA deadline on the 5th April.

“This is the final date you must pay into your ISA to take advantage of that financial year’s tax benefits, for instance, and a significant event in the savings calendar.”