Weekly Round-Up: 16th March 2018
UK Finance has responded to the Payment Systems Regulator’s (PSR) publication of the outcome of its consultation on authorised push payment scams. The Trade Body for UK Banks said that authorised push payment scams cost consumers £236m in 2017, the first time this data has been collected. There were 43,875 reported push payment scams last year, 88 per cent of which hit consumers. The rest were aimed at businesses. Banks paid back £60.8m, just 26 per cent, of push payment scams.
Push Payment scams include those where a scammer hacks an email account and monitors emails, leaving the scammer able to push payment requests through as if they look like they are from a solicitor, broker, etc., resulting in vulnerable or naïve customers making payments to the fraudsters bank account. These are startling numbers, not least that only 26% of customers have had support from their bank. UK Finance state that tackling fraud and scams is the number one priority for the finance industry, and they have successfully prevented more than £6 in £10 of attempted fraud.
The Industry has also introduced new standards on how banks respond to victims of authorised transfer scams. However there is always more to do, which is why UK Finance are working with the Joint Fraud Taskforce to deter and disrupt criminals and better trace, freeze and return stolen funds.
The price of a Car
Figures published today by the Association of British Insurers (ABI) highlight that the average cost of a motor insurance claim has risen to the highest level on record. The latest motor insurance claims statistics for 2017 show that the total amount paid on all motor claims, at £8.1billion, remained virtually unchanged from 2016, and the average claim, at £2,936, was the highest on record. Increases in the cost of theft claims and vehicle repairs contributed to this rise.
The average personal injury claim in quarter 4 of 2017, at £10,816, was the highest quarterly figure since quarter 2, 2016 although the number of personal injury claims in 2017 fell slightly on 2016, with 320,000 claims settled. However, claim volumes remain significantly higher than should be expected given the continued fall in road traffic casualties. Despite the reduction in road casualties, whiplash-style claims reported to the Compensation Recovery Unit have been rising.
Britain’s motorists are paying a heavy price for delays in the Government implementing its proposals to reform how personal injury compensation is calculated (the Discount Rate). With the price paid for the average comprehensive motor insurance policy having jumped by 9% in 2017 to a record high of £481., reforms cannot come soon enough for millions of insurance customers. The ABI estimates that a UK motorist can now expect to pay on average a total of £31,650 on motor insurance during their driving lifetime. This is up 5% on 2014. It equates to more than the price of the average new car, or the average UK salary.
Flat but still up
According to the latest figures from the Halifax, house prices in the last three months to February were 1.8% higher than in the same three months a year earlier, slowing from the 2.2% annual growth recorded in January. House prices in the latest quarter (December-February) were -0.7% lower than in the preceding three months (September-November), the first decline on this measure since May last year.
On a monthly basis, prices grew marginally by 0.4% in February, following two consecutive monthly falls with the average price in February being £224,353, down slightly from November’s high of £226,408. Reflecting the observations made by the Nationwide in their analysis, Halifax also suggest a flat housing market underpinned by a strong labour market. The number of people in employment rose by 88,000 in the three months to December and was almost entirely accounted for by full-time jobs. The strength of the jobs market may finally be benefitting wage growth, with the annual growth rate accelerating from 2.3% in November to 2.8% in December. However, earnings are rising at a slower rate than consumer prices.
Despite the November rise in the Bank of England Base Rate, mortgage rates continue to stay low by historical standards. While it is expected that price growth will remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months.
Savings will see me through
New research shows just under three quarters of people describe themselves as “in control” financially, but worry about money and health issues according to Protection Review’s The Syndicate. Confidence in protection insurance as a support mechanism is high but people are more likely to depend on their partner and savings. The public has low expectations that insurers will pay claims, but strongly believe they should – sometimes even in the event of non-disclosure and they also acknowledge the need for higher premiums for those with habits affecting their health
The 2018 report from The Syndicate, the research arm of Protection Review, has found that most people feel confident in managing their finances. 45% of the sample said they took an interest in their finances, didn’t postpone financial decisions and didn’t find financial matters confusing. 68% said they were good at managing their money with 71% of the sample describing themselves as “in control” of their finances.
Questions on the financial situation of households provided insights into how comfortable people feel about their current financial situation. Having been presented with many options ranging from macro to micro concerns, the results showed that “Having enough money” and “My health” were selected by 45% of the sample and were significantly more popular as choices than the other options presented, with Terrorism and Brexit at 33%. The research identified that people’s two main concerns for the future were their health and having sufficient money. The most likely coping mechanism should the worst happen was to ask a partner or family for support. Despite this, 64% of the sample admitted that they would be uncomfortable asking anyone for financial support and 54% suggested that they would try and seek support from other means first to avoid asking for help.
When asked how confident they were that their savings would support them for longer than 6 months in the event of a loss of income due to illness or accident, 68% of the sample expressed confidence in their savings, compared to 88% believing that insurance would offer support if needed. Insurance was the highest scoring support mechanism with the State scoring 79%.