The banks revealed in their results today that hundreds of thousands of Barclays and Santander customers have taken paid holidays on credit cards, personal loans and mortgages.
Meanwhile, official figures from the Bank of England show that households have cleared billions of pounds of debt over the past few months.
Santander, Britain’s third-biggest mortgage lender, revealed in its semi-annual results that more than a fifth of mortgage borrowers, 239,000 in all, had requested three-month breaks on £37.1bn worth of mortgages.
However, the bank said the number of customers still on paid leave fell to 7 percent by July 15, as thousands did not take the option of another three-month break and instead started making payments again.
On holiday: 1.05 million credit card-paid holidays have been canceled from July 9, UK Finance Trade reports. Barclays and Santander revealed on Wednesday that they had distributed 183,000
The vast majority – 206,000 – were taken out of mortgage holidays by April 24, indicating an initial surge in applications for payment breaks after regulators introduced them in March with few homeowners seeing their circumstances change between April and June to the extent that They need to take one.
The UK arm of the Spanish bank, which saw profits fall nearly 75 per cent in the same six-month period last year as it braced for hundreds of millions of pounds in non-performing loans, has disclosed one in 10 personal loan borrowers and 26,000 . Credit card customers had taken paid holidays as of the end of June.
Meanwhile, Barclays said it provided repayment authorizations on 157,000 credit cards, 106,000 loans and 121,000 mortgages over £16.2 billion in syndicated borrowing.
The numbers in its results mean that Barclays alone distributed nearly 15 percent of the $1.05 million credit card payment authorizations granted by banks by July 9 and 15 percent of the 707,000 payment authorizations granted on unsecured loans.
Britain’s largest bank, Lloyds, will reveal its six-month results tomorrow.
In total, 1.9 million leave mortgage payments have been distributed, according to UK Finance Trade, but it was unable to confirm how many of those customers had begun to appeal payments.
The results from the two major banks came as the Bank of England found that the amount owed by consumers on credit cards and loans had fallen by a record amount in the past 12 months, thanks to a massive slump in borrowing and spending since March.
Four months of reduced borrowing means the amount households owe on credit cards and loans fell from £225.3bn in February to £207.1bn last month.
This is a 3.6 percent decrease from the amount due in June 2019, the largest annual decline since filings began in 1994.
While net payments fell from £4.6bn in May to £86m last month as consumer borrowing recovered “slightly”, it remained “well below pre-coronavirus levels”, the BoE said.
In the 18 months to February 2020, an average of £1.1 billion was borrowed per month.
| Month | The amount owed on credit cards | monthly change | Monthly percentage change | Annual percentage change |
|---|---|---|---|---|
| January | 72.1 billion pounds sterling | £0.2bn | 0.2% | 4.3% |
| February | £71.9bn | £0.0 billion | 0.0% | 3.5% |
| Walk | £69.3bn | -2.4 billion pounds sterling | -3.3% | -0.3% |
| April | 64.1 billion pounds sterling | -5.0 billion pounds sterling | -7.2% | -7.8% |
| mayo | 62.1 billion pounds sterling | £-1.8bn | -2.8% | -10.7% |
| Jun | 61.6 billion pounds sterling | £-0.2bn | -0.4% | -11.6% |
| Source: Bank of England (seasonally adjusted data) | ||||
Alastair McEwen, head of savings and retirement at insurance company Aviva, said: “Today’s latest data shows that the UK’s rapid shift towards becoming a savers’ nation continues.
Bank of England data shows that households have paid off five years of credit card debt in just five months.
Outstanding credit card debt now stands at £61.6 billion, down from a high of £72.9 billion in 2019, which takes us back to a level not seen since 2015.
The Bank of England found that around £248m more credit card debt was paid off than borrowed in June.
V-shaped rebound? Consumer borrowing remained below pre-coronavirus levels in June, but households paid back £86m more than they borrowed, compared to £7.4bn in April.
But although households paid down an average of £18.5bn of consumer debt between April and June, this was down from £24.6bn in February.
This suggests that Britain’s low debt pile was driven by the shutdown of large parts of the economy and the inability of consumers to spend, rather than a concerted effort by households to get their finances back together.
Bank of England data shows that households have paid off five years of credit card debt in just five months
Alistair McQueen, Aviva
The Barclays and Santander results also revealed how much customers stashed away their savings during the first six months of this year, with Barclays customers saving £20.2 billion, increasing the bank’s UK deposits by 10 per cent.
Santander, meanwhile, saw individual deposits increase by £6bn in the first six months of this year, also revealing how the lockdown has created a nation of ‘casual savers’.
However, these billions in savings are unlikely to yield much benefit, with Barclays becoming the last major name on the street paying just £1 interest on every £10,000 saved.
Savers should be swapped after a better deal, and they can find the best rates at Money’s Best Buy tables.
That’s five money from the best credit cards
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