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Inflation: These three things have gone up in price

Michael Brown

Content Writer
Published: 24/05/2022

With the Consumer Price Index edging towards double digits, these are the latest things to increase in price.

Last week, the Consumer Price Index (CPI) increased to 9%, the highest inflation has been in 40 years.

Much of this can be owed to increased energy prices, with the Ofgem energy price cap coming into effect last month, according to the Office for National Statistics (ONS).

However, these are not the only items in the ONS’s “basket of goods” to increase in price. Here are three other things to have risen in price. 

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Klarna to report customer debts and payments to credit agencies

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. 

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Spring clean finances as the cost of living soars (part two)

The cost of living is soaring, and consumers may want to try to save some cash in any way they can by making simple changes to their everyday finances. Even if the months ahead seem daunting, whether a spender or a saver, taking some time out to spring clean finances and being conscious of a budget could be invaluable.

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Spring Statement: Sunak Promises Income Tax Cut Amid Rise in Cost of Living

Government also plans to cut fuel levy and raise the National Insurance threshold.

Chancellor of the Exchequer, Rishi Sunak, has promised to cut the basic rate of income tax from 20% to 19% by the end of Parliament in 2024. This promise was made in the budget speech today after inflation increased to 6.2% this morning, putting further strain on consumers.

“While we welcome the 1p reduction in the basic rate of income tax, savers still need to take steps to reduce the impact of inflation,” said Shona Lowe, Financial Planning Expert at abrdn.

“Moving cash into arrangements where the returns could be closer to the inflation rate could be an effective way for people to make the most of their savings this year,” she said.

In addition to this promise, Sunak will lift the National Insurance (NI) Threshold by £3,000. This alone could make a typical saving of £330 a year, according to Becky O’Connor, Head of Pensions and Savings at interactive investor.

“As concessions go, raising the National Insurance threshold to £12,570, in line with the personal allowance, is a big one. It will come as a relief to those worried about the impact of the Health and Social Care levy,” she said.

The rise also equates to a £6 billion tax cut for 13 million people, according to Sunak’s speech.

While the cut in fuel levy will come as some relief, it is still a long way from appeasing motorists, said Sarah Coles, Senior Personal Finance Analyst at Hargreaves Lansdown.

“The fuel duty cut is better than a poke in the eye with a sharp stick, but it’s hardly going to be life-changing for hard-pressed motorists,” she said.

“With the cost of unleaded petrol now almost £1.67 a litre on average it’s still going to mean we need to make some horribly difficult decisions about how and where we travel in future. It’s also going to continue inflating the cost of transporting anything to stores, which will gradually feed into the price of everything on the shelves,” Coles explained.

Among the other tax changes was a scrap in Value Added Tax (VAT) for homeowners purchasing energy efficient materials such as solar panels and eco-friendly heat pumps.

The Household Support Fund will also be doubled to £1 billion. This fund is aimed to help households in need by subsidising essential items such as fuel bills and the cost of food.

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Santander Customers Overpay £335 million on Their Mortgage This Year

Many homeowners have opted to overpay on their mortgage to combat potential further base rate hikes.

Santander customers have overpaid £335 million on their mortgages so far this year. This equates to £47.5 million per week and is a 50% increase from the same period last year, according to the bank.

“As we look at the prospect of more increases to interest rates and further rises in the cost of living, it’s no surprise that more people are looking at where they can put their money now, to keep the future costs of owning their home lower,” said Graham Sellar, Head of Development, Homes at Santander UK.

In contrast, 7% of UK borrowers opted to overpay on their mortgage in the first half of 2021, according to insurance broker LifeSearch.

Cumulatively, this amounted to £7 billion from January 2021 to August 2021, with the average borrower overspending £319 on their mortgage. 

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Six in 10 Credit Card Users Don’t Know Their Interest

11th February 2022

Research from YouGov suggested suggests that 60% of credit card users card users remain unaware on of how much interest they are charged. In addition, not a single survey participant could correctly calculate how much a typical credit card purchase would cost after interest is considered. “It is shocking that well over half of credit card users don’t know how much interest they are paying on their purchases,” said Alex Marsh, Head of Klarna UK. YouGov, who which were was commissioned to conduct this research by Klarna UK, used surveyed 2 2,000 British consumers to gather their data. Participants were presented with a credit card sign-up flow and were asked to calculate the total cost, including interest, of a typical purchase. “Credit cards are incredibly complex products, with layers of different interest rates and charges. This latest research proves what we’ve long suspected - that the majority of customers struggle to understand exactly what they’re being charged,” said James Daley, Managing Director of Fairer Finance.

Research from YouGov suggested that 60% of credit card users card users remain unaware on of how much interest they are charged.

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Six steps to organise your finances during financial planning week 2020

5th October 2020

Today marks the start of the Chartered Institute for Securities and Investment’s (CISI’s) Financial Planning Week. We highlight six steps to organising your finances.

Today marks the start of the Chartered Institute for Securities and Investment’s (CISI’s) Financial Planning Week. We highlight six steps to organising your fin

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Lenders told to review how they approach customers in persistent debt

4th February 2020

Fears that those in credit card debt could have their credit cards cancelled without warning were put at ease with this week’s announcement from the Financial Conduct Authority (FCA) that lenders needed to review their approach to persistent debt customers

Fears that those in credit card debt could have their credit cards cancelled without warning were put at ease this week

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Tips for becoming debt-free in 2020

16th January 2020

Following the news yesterday that low-income households are facing the fastest rise in consumer debt since the financial crisis, we have taken a look at how consumers can become debt-free in 2020

Following the news yesterday that low-income households are facing the fastest rise in consumer debt...

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Most Popular Debt News

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Inflation: These three things have gone up in price

24th May 2022

Last week, the Consumer Price Index (CPI) increased to 9%, the highest inflation has been in 40 years. Much of this can be owed to increased energy prices, with the Ofgem energy price cap coming into effect last month, according to the Office for National Statistics (ONS).

Here are three other things to have risen in price.

Read More
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Klarna to report customer debts and payments to credit agencies

4th May 2022

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. 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.

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

Read More
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Nearly 40% of adults admit to missing debt payments

4th November 2019

Nearly 4 in 10 adults admit to missing debt payments

Nearly 4 in 10 adults admit to missing debt payments

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Santander Customers Overpay £335 million on Their Mortgage This Year

18th February 2022

Many homeowners have opted to overpay on their mortgage to combat potential further base rate hikes. Santander customers have overpaid £335 million on their mortgages so far this year. This equates to £47.5 million per week and is a 50% increase from the same period last year, according to the bank. “As we look at the prospect of more increases to interest rates and further rises in the cost of living, it’s no surprise that more people are looking at where they can put their money now, to keep the future costs of owning their home lower,” said Graham Sellar, Head of Development, Homes at Santander UK. In contrast, 7% of UK borrowers opted to overpay on their mortgage in the first half of 2021, according to insurance broker LifeSearch. Cumulatively, this amounted to £7 billion from January 2021 to August 2021, with the average borrower overspending £319 on their mortgage. 

Many homeowners have opted to overpay on their mortgage to combat potential further base rate hikes.

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