Banking News

Nearly a fifth of these savers have used over £1,000 of their savings over the past 12 months.

Four in ten savers have been forced to use their savings account to help cope with the rising cost of living over the past 12 months.

This is according to Yorkshire Building Society and the Centre for Economics and Business Research’s Inflation Nation report, which was released today.

“Families across the UK are already having to budget carefully in order to make ends meet. Some have accrued savings over the course of the pandemic, which can help foot monthly bills. Others simply do not have the financial resilience to withstand rising costs,” said Stephen White, Interim Chief Executive of Yorkshire Building Society. 

The report also found that of these savers, 23% used between £200 and £499 of their funds, 17% used more than £1,000 and 12% had used between £500 and £999.

Offer can be used in addition to HSBC’s deal which provides six months’ cashback on its insurance products.

Customers looking to switch current accounts to HSBC’s Advance or Premier current account can make use of a £170 switching incentive with immediate effect.

The incentive is meant to help consumers challenged by the cost of living crisis, according to Tom Wolfenden, HSBC UK’s Head of Retail.

“While cutting back on everyday and occasional spending or cancelling any unwanted or unused subscriptions could help, taking note of the wide range of offers that could provide discounts, or even cash, could make your money go further or go a little way to reducing the impact of the increase in the cost of living,” he said.

The switching incentive will run alongside HSBC’s current deal which provides six months’ cashback on the bank’s ‘mix and match’ insurance offer, Select and Cover. The value of this cashback is worth an additional £117.

The Bank of England has today increased base rate by 0.25%, up from 0.75% to 1.00%. We have analysed the average rates offered across savings and mortgages and considers what this decision may mean for consumers moving forward.

The UK’s biggest Buy Now Pay Later provider will share its customer debt and payments with Experian and TransUnion from 1 June.  

From 1 June, Buy Now Pay Later (BNPL) provider Klarna will start sharing its customers payments made on time, late payments, and unpaid purchases with credit reference agencies.

Experian and TransUnion will be the first credit reporting agencies to receive this information.

This means that if a consumer falls behind on any repayments, their credit score will worsen. Equally, if a consumer repays their debts on time their credit rating will improve.

“It is alarming that UK consumers are still being forced to take out high cost credit cards to demonstrate they can use credit responsibly and build their credit profile,” said Alex Marsh, Head of Klarna UK.

“That will start to change on 1 June this year as the vast majority of the 16 million UK consumers who make Klarna BNPL payments in full and on time will be able to demonstrate their responsible use of credit to other lenders.” 

The move comes at a time when the BNPL market is facing pressure from lobbyists to be regulated. In February, Klarna, Clearpay, Openpay and Laybuy all changed terms in their contracts after pressure from the Financial Conduct Authority (FCA).

Currently, if a customer falls behind on their Klarna repayments, their credit score will remain unaffected. Instead, they will be referred to a debt collection agency.

This is common with other BNPL providers. Yet around 47% of people surveyed by Creditspring, a loan subscription provider, did not know that a BNPL user could be referred to a debt collector if they missed their payment. 

"Worst-case scenario is that borrowers can end up receiving a knock on the door from a debt collector, but currently the vast majority are completely unaware this is even a possibility," said Neil Kadagathur, Co-Founder and CEO of Creditspring.