Marketing No Comments

Furloughed workers should find out this week if they’ll face redundancy when scheme ends in October

MILLIONS of furloughed workers should find out this week if they will lose their job when the coronavirus job retention scheme comes to an end next month.

Many businesses planning to cut jobs must alert staff of the risk of redundancy by Wednesday this week if they intend on dismissing staff as soon as the furlough scheme ends in October.

A consultation period must start at least 45 days before the first job loss when more than 100 staff are made redundant.

The coronavirus job retention scheme (CJRS) – the government-backed initiative which pays part of the wages of furloughed staff – ends on Saturday 31 October.

Wednesday 16 September marks 45 days before this.

Companies can still make staff redundant after this date, but they will have to pay full wages from 1 November onward without furlough scheme support.

Citizens Advice is reminding people to check their redundancy rights, including that the 45 day rule for consultation is followed.

To find out more about how we can assist you with your Second Charge Mortgage please click here

Tracey Moss, senior employment expert at Citizens Advice, said: “If you’re at risk of redundancy, it’s important to know you do have rights to help protect you from unfair dismissal and to ensure you’re paid what you’re owed.

“It’s completely understandable that you may find the rules and procedures overwhelming, but you don’t have to face redundancy alone. If you’re struggling, contact your nearest Citizens Advice for help.”

If your employer fails to consult properly, including starting late or not consulting at all, you could make a claim to an employment tribunal.

Where there are redundancies of between 20 and 99 staff, the redundancy consultation must start at least 30 days before the dismissals.

In this case, employers will have to notify staff by 1 October if they intend to make them redundant as soon as the furlough scheme ends.

For redundancies of less than 20, there are no rules for the length of the consultation and there is no maximum length for redundancy consultation.

A wave of job cuts have already taken place, with the travel, retail and hospitality industries among the hardest hit so far.

London City airport, Pret A Manger and Marks and Spencer are among those to have announced redundancy plans.

LinkedIn careers expert Charlotte Davies said: “Losing your job can be a really destabilising experience, especially in this challenging economic climate.

“LinkedIn data shows that there are currently three times as many people applying for every role compared to last year.

“But while the prospect of landing a new role in the current jobs market may seem daunting, the good news is there are still jobs out there.

She recommends looking at and improving your skills.

She said: “Reflect on your transferable skills and consider if there are any gaps in your skillset that you could fill with an online learning course.

“LinkedIn Learning is currently offering nearly 1,000 hours of free courses to help people reskill for in-demand digital roles.

And don’t forget to take advantage of your network of people you know.

She said: “Don’t be afraid to reach out to your online networks for advice and opportunities.

“We’ve seen so many conversations happening on LinkedIn over the past few months from members who have been made redundant or furloughed, and then found new positions through their online community.”

Fresh calls have been made for the furlough scheme to be extended over fears the UK could be hit with a “second wave” of redundancies.

Around half a million people could lose their jobs this autumn, a shocking new study has predicted.

Martin Lewis has urged furloughed workers to check if they’re still being paid 80% of their salary after a change in how the scheme works.

By Lynsey Barber

Source: The Sun

Marketing No Comments

UK banks likely to hold fire on home repossession after pandemic, say analysts

Repossessing homes will become harder for UK banks seeking to recover properties when borrowers fail to keep up with payments on mortgages in the wake of the coronavirus pandemic, said analysts.

Recent guidance from the Financial Conduct Authority, or FCA, told banks to offer a range of “tailored repayment options” to mortgage borrowers affected by the coronavirus after the existing scheme offering a three-month payment holiday is withdrawn at the end of October. Customers will still be able to claim a three-month mortgage payment holiday, which in some cases could be their second or third deferral, up until the deadline.

So far 2 million mortgage holders have taken advantage of the payment holiday scheme, according to UK Finance, which represents banks. Among the U.K.’s largest banks, Lloyds Banking Group PLC had granted around 472,000 mortgage holidays as of June 30, while some 240,000 of NatWest Group PLC-provided mortgages were paused, according to data compiled by S&P Global Market Intelligence.

Though the FCA said banks and building societies will return to the tailored support they provided under its normal rules, the regulator also said lenders’ approach needs “to reflect the uncertainty and challenges” that many customers will face in the coming months.

This could see lenders take a different approach to borrowers who are struggling more than they did in previous crises, said Numis Securities analyst James Hamilton.

To find out more about how we can assist you with your Second Charge Mortgage please click here

“The banks will have to make decisions about how to deal with borrowers who lose their jobs, but also those who are ‘underemployed’ — customers who normally work on commission or bonuses, for instance, who have not been able to work as normal during the pandemic. Banks will have to decide whether to support borrowers who may have been in a good job for years but in a sector which has undergone profound change as a result of the pandemic, like cabin crew staff for airlines,” he said.

New social contract

Banks are likely to take a more nuanced approach to borrowers who find themselves in financial difficulty than they might have done in the past, as the FCA’s proviso on the need to reflect the uncertainty of the pandemic indicates, said Hamilton. In an era of low interest rates, banks are likely to offer some borrowers in trouble the chance to switch to an interest-only mortgage as an alternative to forbearance, for instance, he said.

However, lenders are likely to take a cautious attitude to repossession of properties where borrowers fail to pay.

“There were virtually no repossessions during the credit crisis, unlike in the recessions of the 1980s and 1990s,” said Hamilton. “Lloyds, the biggest mortgage provider, was state-owned then and the government made it quite clear that mortgage-holders were also voters so overall there were relatively few repossessions. Banks will have to be very careful about repossessions and since courts have been closed there’s likely to be a delay before legal action commences in earnest.”

John Cronin, analyst at Goodbody Stockbrokers, agrees with Hamilton, stating in a note to investors that the FCA’s guidance could herald a new approach for banks.

“We think a new social contract is emerging — the pain taken by certain segments of society will not be tolerated by the political system and someone will have to pay. We think repossessions will be more difficult, banks will have to work harder than ever with customers to achieve reasonable forbearance measures,” wrote Cronin.

Credit scores

Banks are likely to see a rise in mortgage forbearance when the regulator-approved mortgage holiday payment scheme ends next month.

“Undoubtedly, there will be more forbearance, when borrowers pause or reduce their payments, as the payment holiday scheme comes to an end. I don’t know anyone who thinks any differently,” said Hamilton.

S&P Global Ratings said it estimates that between 55% and 90% of U.K. borrowers have resumed paying their residential mortgages following payment holidays related to the economic impact of COVID-19.

The FCA noted that while the majority of customers who have had a payment holiday are expected to resume full repayment, “many will remain in financial difficulty.” It also said that while the payment holiday scheme will finish at the end of October, it “will keep this under review depending upon how the wider situation develops.”

The FCA warned banks that they should not take a “one size fits all” approach, and said the range of options that could be offered to struggling mortgage holders included extending the repayment term or restructuring the mortgage, while those borrowers most at risk should be referred toward debt advisory services.

Those mortgage holders taking payment holidays will see their requests reflected in their credit files, which could affect their creditworthiness. This is despite the government and the FCA initially telling consumers that a payment holiday would not affect their credit scores, which affects eligibility for future loans.

There has also been a change in approach to mortgage payment holidays by the Bank of England. When the scheme was first introduced, the BoE wrote to mortgage providers explaining that since coronavirus-related payment deferrals were being made widely available and were therefore not based on individual financial circumstances, they were not necessarily good indicators of significant increases in credit risk, credit impairments or defaults.

Marker of risk

However, following the FCA’s latest announcement, the BoE said that the tailored forbearance arrangements for borrowers who are not able to resume payments in full immediately after their payment holiday ends is as good an indicator of a significant increase in credit risk as forbearance was prior to the pandemic.

The FCA’s guidance comes as the U.K. mortgage market shows signs of recovery. The BoE said mortgage lending increased 6.74% month over month in July to £17.4 billion, though it was down 18.1% year over year. House prices were up 3.7% in August compared with a year previously, according to Nationwide Building Society’s House Price Index.

“House price rises might be hitting the headlines now, but in the second or third quarter of next year, it’s going to look very different,” said Hamilton.

By Jon Rees

Source: S & P Global

Marketing No Comments

Unemployment and redundancy rates are on the rise in the UK – here are the places most affected

The latest set of economic data released by the National Office for Statistics (ONS) paints a stark picture of the pandemic’s continued impact on the UK economy, with unemployment and redundancies on the rise.

Early indicators for August 2020 suggest that the number of employees on payroll in the UK was down by around 2.4 per cent (or 695,000 people) compared with March 2020, before the impact of Covid-19 had been felt in the economy.

Unemployment has risen to the highest level for almost two years, at 4.1 per cent across the UK, up from 3.9 per cent in the previous quarter. This rise has been driven disproportionately by young people finding themselves out of employment in the last few months, with a record decrease of 146,000 among 18 to 24 year olds in employment.

However, there was an increase in the number of 25 to 64 year olds in employment, with 236,000 people finding work. As a result, despite significant decreases in employment for certain demographics and in certain areas, the overall employment rate has risen slightly in the last quarter.

To find out more about how we can assist you with your Second Charge Mortgage please click here

Redundancies have also increased significantly, up by 48,000 this quarter. While the ONS notes that redundancy figures were historically low prior to this release, the changes now seen in the redundancy rate both annually and quarterly are the largest increases since recession in 2009 following the global financial crash.

The areas with the highest levels of unemployment

North East: 5.2% (no change)North West: 3.5% (-0.6)Yorkshire and The Humber: 4% (+0.1)East Midlands: 4.4% (+0.7)West Midlands: 4.4% (-0.4)East: 3.7% (+0.1)London: 5% (+0.4)South East: 3.5% (+0.5)South West – 3.8% (+0.8)Wales – 3.1% (+0.1)Scotland – 4.6% (+0.1)Northern Ireland – 2.9% (+0.6)UK – 4.1% (+0.2)

While unemployment rates are currently highest in the North East, followed by London and Scotland, the areas which have seen the largest increases in the unemployment rate over the last quarter are the South West, East Midlands and Northern Ireland.

Though they are still dealing with relatively high rates of unemployment, the North West and West Midlands both recorded notable decreases in the unemployment rate over the last quarter.

Commenting on the ONS statistics, Head of Economics for the British Chamber of Commerce, Suren Thiru, said, “Despite the slight rise in the unemployment rate, the furlough scheme continues to limit the pandemic’s full impact on headline job figures.

“With many firms still facing waves of cash flow problems, rising costs and an uncertain economic outlook, it is probable that unemployment will escalate sharply as government support winds down.

“To help avoid a damaging cliff edge for jobs more must be done to help firms keep staff on through this deeply challenging period.”

By Ethan Shone

Source: News Post Leader

Marketing No Comments

Will the BoE inject more stimulus into the UK economy?

The BoE is preparing to announce its latest interest rate decision tomorrow, as it closely monitors the UK economy’s rebound from the record 20.4 per cent contraction in the second quarter.

Since then, there have been many positive signs. The economy grew by a huge 8.7 per cent in June and another 6.6 per cent in July. More recently, Britons were enticed to the high street by August’s Eat Out to Help Out scheme.

But there are challenges on the horizon. First and foremost is the worrying rise in coronavirus cases and new restrictions. Inflation also fell to 0.2 per cent in August, well below the Bank’s two per cent target.

That’s a lot for the Bank of England to consider. And analysts are united in saying the BoE will leave interest rates on hold at 0.1 per cent and its bond-buying target at £745bn.

They say that the Bank is more likely to increase stimulus in November after seeing how the economy and inflation fare.

Further stimulus will wait until November

“Even if the Bank felt more loosening was ultimately going to be required, we see little benefit to the Bank announcing it now,” said George Buckley, chief UK economist at Nomura in a note to clients.

To find out more about how we can assist you with your Second Charge Mortgage please click here

Buckley pointed out that the Bank’s current bond-buying programme is scheduled to be completed around December. So, he said, “why not wait until the November meeting when the MPC [monetary policy committee] will have the luxury of analysing another seven weeks of economic data?”

Howard Archer, chief economic adviser to the EY Item Club, agreed. “There seems little need for further MPC stimulus action – for the time being at least,” he said.

“It currently looks very possible that GDP growth in the third quarter could be around 15 per cent following the record 20.4 per cent contraction in the second quarter.”

Analysts say that if the Bank decides to act in November, as many predict it will, it is likely to increase bond-buying rather than cut interest rates further.

Bank could take a ‘dovish turn’

In August, the Bank predicted economic growth would be better than expected in the near term. Yet it was more pessimistic longer-term, saying the economy would regain its pre-pandemic size at the end of 2021.

Its forecasts were more upbeat than most, however. Jacqui Douglas, chief European macro strategist at TD Securities, said in a note that the Bank therefore could well take a “dovish turn” tomorrow. She predicted there will be “more focus on the downside risks to growth going forward”.

Although the Bank is not publishing any new forecasts, it has tended to enlarge on its decisions in a statement.

Douglas said: “The downside risks to the outlook have come into sharper focus.” She cited “an upcoming wave of job losses to the challenge of controlling Covid outbreaks to Brexit negotiations”.

UK inflation also dropped to 0.2 per cent in August, dragged down by the Eat Out to Help Out discount meal scheme. But that was better than the Bank had expected.

Nomura’s Buckley said that there is a chance Jonathan Haskel or Michael Saunders could vote for more bond-buying during this meeting. They have traditionally been more dovish MPC members, and Saunders recently said it is “likely” more easing will be required.

What has the Bank of England done so far?

The Bank slashed interest rates to a record low of 0.1 per cent from 0.75 per cent in two special meetings in March.

It also beefed up its quantitative easing programme – through which it creates money and buys bonds to keep borrowing costs low – to £645bn in March. The Bank then increased its bond-buying target to £745bn in June.

The MPC has also put negative interest rates in its “toolbox” of possible measures for the first time.

However, at its August meeting it did not sound too keen to actually get them out and use them. It said that “negative policy rates at this time could be less effective as a tool to stimulate the economy”. The Bank added that “the MPC has other instruments available”.

By Harry Robertson

Source: City AM

Marketing No Comments

Growing number of clients unaware they have poor credit

The number of clients who are unaware that they have poor credit files is growing, according to broker forum Cherry.

The research, which was carried out amongst forum users in association with Click2Check, found that 79% of brokers are seeing more clients who are unaware that they have poor credit files.

The main cause of poor credit, cited by 42% of brokers, is missed payments on credit and store cards. More than a quarter (27%) of brokers said the poor credit was due to missed payments on utilities, while 23% said it was caused by mortgage payment holidays.

To find out more about how we can assist you with your Second Charge Mortgage please click here

Donna Hopton, director at Cherry, commented: “The Cherry forum provides brokers with the opportunity to discuss the latest trends and developments in the market, and it’s very clear that clients with poor credit files is a hot topic right now. This makes sense given the economic upheaval people have experienced as a result of Covid-19, but it’s interesting and concerning that so many clients are unaware the impact of missing payments or taking a mortgage payment holiday can have on their credit record.”

David Jones, director of Click2Check, added: “It’s so important that brokers are able to understand a client’s true credit standing and affordability at the outset, so that they can match them with the most suitable lender. This research demonstrates that very often clients are unaware of their true credit status so advisers should have their own systems and processes in place to ensure they don’t waste time chasing after unsuitable lenders. This is where a pre-qualification tool like Credit Assess from Click2Check can prove an invaluable part of the advice process.”

By ROZI JONES

Source: Financial Reporter

Marketing No Comments

UK redundancies rise most since 2009 as Covid-19 takes toll

The number of redundancies in the UK rose in July by the most since 2009 as the Covid-19 pandemic took its toll.

Figures released on Tuesday by the Office for National Statistics showed that 156,000 people were made redundant in the May to July quarter, up 58,000 from the same period a year ago and 48,000 higher than between February and April. The ONS said these were the largest annual and quarterly increases since 2009.

“While redundancies are at their highest level since September to November 2012, the level remains well below that seen during the 2008 downturn,” it said.

Meanwhile, the unemployment rate increased to 4.1% in July from 3.9% the month before. The data showed that the number of employees on payrolls declined by 695,000 in August compared to March and by 36,000 compared to July.

To find out more about how we can assist you with your Second Charge Mortgage please click here

The claimant count reached 2.7m in August, up 120.8% since March.

ONS director of economic statistics Darren Morgan said: “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened. Fewer workers were away on furlough and average hours rose. The number of job vacancies continued to recover into August, too.

“Nonetheless, with the number of employees on the payroll down again in August and both unemployment and UK redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”

By Michele Maatouk

Source: Sharecast