Digesting the Digits – UK’s festive season under economic strains 

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Number crunching is a key component of the payment industry, with digits scattered across the sector’s key stories. 

Each week, Payment Expert digests these digits and brings an overview of the past payments week in numbers. This edition explores how the cost-of-living crisis will affect this year’s festive celebrations in the UK. 

Barclays: 36% of consumers brace for ‘costly’ Christmas period

Barclays has warned that falling UK card spending rates is synonymous with the need for more personalised options from financial service providers.

The high-street bank pointed to rising inflation and surging energy bill costs as some of the reasons at the heart of stagnating consumer card spending behaviours, which saw an insignificant year-on-year increase of 2.6% in October. 

What’s more, the bank revealed that 36% of UK consumers are expecting Christmas to cost them more than last year’s festive season, with a fifth of them concerned about their financial situation going into the new year. 

Jack Meaning, Chief UK Economist at Barclays, said: “The latest transaction data shows they are pulling back from discretionary spending and increasingly worried about their future ability to spend, adding to the picture painted by other data.”

Budget woes likely to affect Black Friday spend for two thirds of households

Still on the topic of festive spending, Tink has echoed Barclays’ concerns in a new study revealing that merchants and customers alike are preparing for a lacklustre Black Friday.

The cost-of-living crisis has once again been outlined as the main reason behind dwindling profit margins and vanishing disposable income.

A survey pool of more than 2,000 consumers has revealed that two thirds (64%) of them will axe non-essential spending from their budget, leaving many merchants behind to fend for themselves and having to think of alternative profit strategies. 

According to Tink, a big focus will be placed on ensuring there’s minimum obstructions to refund policies, which in turn can incentivise a bigger rate of customer spending. 

APP fraud victims exceed 19,000 per month between January and June

And again in the news, the cost-of-living crisis has led to a wave of increasing APP fraud rates that flooded the first six months of 2023, according to the UK’s Financial Conduct Authority (FCA).

The regulator has cautioned that this year’s January-June period has seen more than 116,000 people being targeted by APP scams – which of course are just the official statistics, with many more cases potentially flying under the radar. 

Criminals are perfectly aware of the ongoing financial vulnerabilities people are struggling with at the moment, and are actively taking advantage of the uncertainty caused by the current economic climate. Subsequently, it is essential financial service providers  step up their customer protection measures now more than ever, the FCA warned. 

Missing on key payments becomes new problem for 14% of UK adults

More bad news for the average UK consumer, as the Money and Pensions Service reveals that one in three adults has missed a vital household payment this year. 

And while for some 30% of the surveyed this seems to be something they have to deal with on a few occasions throughout the year, a more worrying outtake from the report is that 14% of taxpayers have fallen behind scheduled payments for the first time in their life. 

Going into more detail about the types of payments that households struggle with the most, credit card repayments lead with 11%, Council Tax or rates (10%) and bank overdrafts or loans (8%) come in second, while 5% are reserved for rent and 4% for mortgage payments. 

NatWest lowers Dame Rose severance fee from £7.6m to £3.2m

A few months after NatWest closed Nigel Farage’s private Coutts bank account, the financial institution refused to grant its former Chief Dame Alison Rose £7.6m who stepped down from her post in July amid a wave of public criticism. 

Instead, Rose will get only £3.2m at the end of her 12-month notice period, according to Sky News reports. 

The Dame released a statement saying: “I can confirm acceptance of the terms of the settlement agreement, which is in line with NatWest Group’s remuneration policy, bringing the matter to a close.”