22nd July 2020

Isn't it Ironic?

How does that song go? 

“Well, life has a funny way 
Of sneaking up on you
When you think everything's okay” 

That’s the one! 

Almost 2m mortgages are on payment holiday, around one in six. Sixty percent of applicants applied in the first three weeks of the scheme! The average deferral is about £755pm

Amazingly, car loans have also been subjected to payment holidays and like mortgage payments, the end date has been put back to October 31^st. The average car finance deferral is £226pm, the average running costs are some £160pm

That is up to six months of payment deferral, note the word deferral. For mortgages and cars that is an average household deferral about £1,000pm.

Additionally, the FCA has said car finance companies should not repossess vehicles if customers are facing financial difficulties because of Covid19 along with those who were/ are in mortgage and rent arrears

The FCA has also said payday loan firms must give customers a one-month interest payment holiday, as part of emergency measures to help households hit by the coronavirus outbreak.

Consumers with other credit products – such as buy-now-pay-later, rent-to-own and pawnbroking agreements – will also be allowed three-month payment freezes if they face temporary financial difficulties.

This is a carte blanch for many to play the system, what this is telling consumers is that obligations mean nothing at all. This is the most incredible situation, in protecting the NHS and saving lives we are also protecting that mountain of consumer debt as well from being reduced. 

The working population of the UK, pre Covid, was some 33m. 

As of June 28, 2020, approximately 9.3 million jobs, from 1.1 million different employers were furloughed as part of the government's job retention scheme. 

Come October, possibly sooner, tens of thousands will be seeing their jobs lost when the furlough scheme disappears. 

The regulator says that they do not expect these ‘deferrals’ to show as ‘arrears’ on credit checks, which is actually what they are. 

In treating customers fairly, credit agencies are being asked to lie, or just keep stchuum

So, isn’t it ironic that over recent years banks and building societies have paid out billions to customers to compensate for being ‘wrongly’ sold PPI? 

PPI was designed to cover repayments if you couldn’t make them yourself, because of redundancy or illness. As many as 64 million PPI policies were sold in the UK, mostly between 1990 and 2010.

Isn’t it ironic that at a time when these policies could have actually paid out that they no longer exist for most?

Will those compensated for miss selling now require further compensation for being wrongly advised they had been miss-sold by those claims’ management companies?

Just a thought.

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