DEMSA Summary: Scottish debt solutions / AI / Events / Collaborations / Training

Summary – Find the full update here (including all the links & more)

This week the bulletin provides a detailed overview of the current state and challenges in the UK’s financial services sector, focusing on mortgage arrears, council tax collection, credit union arrears, financial crime, and various collaborations and events aimed at addressing these issues.

Key Points

  • Mortgage arrears increased by 7% for homeowners and 18% for buy-to-let mortgages in Q4 2023.
  • UK Finance emphasizes support for those struggling with mortgage payments, asserting that seeking help won’t affect credit scores.
  • StepChange reports 35% of mortgage holders show signs of financial difficulty, with 23% using credit to make payments.
  • Citizens Advice reveals private renters in deficit spend 73% on housing and energy, while mortgage holders spend 43%.
  • The FCA intervenes in the Motor Finance/Insurance sectors, focusing on ‘sludge practices’ and ‘Fair Value’ assessments.
  • Government response to council tax collection emphasizes local authority discretion and data sharing for affordability assessments.
  • Credit Union arrears statistics show a continued increase in the average amount in arrears, now at £2,043.
  • The FCA outlines four areas of focus on financial crime: Data & Technology, Collaboration, Consumer Awareness, and Metrics.
  • Fair4All Finance seeks a data partner to understand consumer credit inquiries better.
  • BSI and the Collaboration Network aim to drive inclusive services to support vulnerable consumers.
  • Events and collaborations highlight the industry’s move towards digitisation and better consumer support mechanisms.
  • The importance of data sharing and technology in improving financial services and consumer protection is emphasized.

Key Statistics

  • Homeowner mortgage arrears increased by 7% to 93,680 in Q4 2023.
  • Buy-to-let mortgage arrears increased by 18% to 13,570 in the same period.
  • 540 homeowner mortgaged properties were taken into possession in Q4, a 14% decrease.
  • 500 buy-to-let mortgaged properties were taken into possession in Q4, an 11% increase.
  • 44% of mortgage holders find it difficult to keep up with bills and credit commitments, up from 36% in September 2023.
  • 35% of mortgage holders show at least one sign of financial difficulty.
  • 23% have used credit in the last 12 months to make mortgage payments.
  • Private renters in deficit spend 73% of their income on housing and energy, mortgage holders spend 43%.
  • The average amount in arrears for Credit Union members grew by 4.6% to £2,043.
  • Loans to Credit Union members increased by 5.3% to £2.34 billion.
See also  DEMSA Summary: Intelligibility event / FCA activity / Personal insolvency / Innovation / Collaborations / Events / Training

Key Takeaways

  • The increase in mortgage and buy-to-let arrears highlights the growing financial pressure on homeowners and landlords.
  • The emphasis on seeking help for mortgage difficulties without affecting credit scores is crucial for consumer confidence.
  • The significant portion of income spent on housing and energy by those in deficit underscores the affordability crisis.
  • The government’s stance on council tax collection and the focus on local authority discretion may lead to varied consumer experiences.
  • The FCA’s intervention in the Motor Finance/Insurance sectors indicates a regulatory focus on ensuring fair value for consumers.
  • Credit Union arrears statistics reflect the broader trend of financial difficulty among consumers.
  • The FCA’s focus areas for combating financial crime suggest a multi-faceted approach to improving industry practices.
  • Collaborations and partnerships, such as those with Fair4All Finance and BSI, are key to addressing financial service challenges.
  • Upcoming events and initiatives show a commitment to digitization and innovation in consumer debt support.
  • The importance of data sharing and technology in enhancing affordability assessments and vulnerability management is highlighted.
  • Regulatory and industry efforts aim to improve consumer understanding and decision-making in financial services.
  • The ongoing dialogue and collaboration between regulatory bodies, industry groups, and service providers are vital for systemic improvements.

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