Santander has reached out to more than a million customers who are at risk of falling behind on their bills as the cost of living plummets.
The High Street Bank’s highly unusual move comes in response to the deteriorating economic outlook and the cost of living crisis, which has left many households struggling to make ends meet.
Lenders fear billions of dollars in loan losses could result if borrowers are cash-strapped and can’t afford to repay loans.
Last week, the Bank of England warned Britain was facing a protracted recession and massive inflation as the central bank hiked interest rates by 0.5 percent – the biggest hike in 27 years – to 1.75 percent.
Santander has reached out to more than a million customers who are at risk of falling behind on their bills as the cost of living plummets. NatWest, one of the UK’s largest lenders, has already approached 2.7 million customers this year
The bank’s bleak outlook also predicts that real household income will fall for two straight years, the first time on record.
Santander has reached out to customers to offer help as inflation is expected to hit 13 per cent this winter.
This has alienated individual account holders who spend a large chunk of their income on energy or use credit cards to withdraw cash or pay important bills.
It’s approaching customers whose checking account balances are being depleted every month, which risks being compromised.
Last week the Bank of England warned that Britain was facing a protracted recession and rampant inflation. Pictured: Governor of the Bank of England Andrew Bailey
The bank is in contact with around 150,000 business customers, and every company that took out bounce-back loans that have not been repaid during the pandemic has been referred to the government’s repayment scheme.
The plan allows companies struggling to repay by extending loan terms from six to 10 years.
Santander is the second bank preparing an important action plan. NatWest, one of the UK’s largest lenders, has already approached 2.7 million customers this year.
They were chosen because they have a basic bank account, low income, or have utility bills that account for more than ten percent of their income.
The news includes budgeting and saving tips. Emails or letters were sent to NatWest’s 800,000 business customers.
NatWest Chief Executive Alison Rose said: “We know that the ongoing rise in the cost of living is affecting people, families and businesses across the UK and we have taken a number of targeted measures to support those who need it. most needed. ,
Average spending on utilities, groceries and mortgage payments will rise to £4,610 by the end of the year, according to the Center for Economic and Business Research.
The growth will be driven by an expected hike in the energy price cap to £3,359 in October, according to forecasts by analysts at energy consultancy Cornwall Insight.
Lloyds Banking Group chief executive Charlie Nunn (pictured) recently said about 1 per cent of customers, or 260,000 people, were “struggling to make ends meet”.
Lloyds Banking Group chief executive Charlie Nunn said recently that about 1 percent of customers, or 260,000 people, were “struggling to get their needs met.”
Britain’s largest mortgage lender Lloyds said it had consolidated loans from 51,000 customers into “a single, more manageable loan”.
Last week the UK’s largest building society, with 16 million members, launched a free hotline for customers looking for help. “We expect the number of members using the service to continue to grow in the coming weeks,” said a nationwide spokesman. Other major banks contacted by The Mail on Sunday declined to give details of the action they would take.
Along with higher utility bills, millions of homeowners will face higher mortgage payments in the coming months following a rate hike.
About two million people have standard adjustable-rate home loans or tracker mortgages, whose repayment fees are linked directly to the Bank of England’s base rate.
Mortgage lenders like Barclays have started raising standard adjustable-rate mortgages by 0.5 percentage points, which will hit these borrowers immediately.
Customers with fixed-rate mortgages are protected against immediate changes in interest rates. However, about 40 percent of these expire within the next year.
A recent survey by MoneySupermarket found almost a quarter of people over 65 had no savings to tide over a living crisis and 22 per cent had £2,000 in the bank. had a share of less than And about half of those under 25 had no savings at all.
There are signs that families are quick to dive into the savings created for everyday expenses during the pandemic.
Help times for banks: pages 120-121