Regulation news October 2015

Universal credit driving vulnerable people to loan sharks…

National Trading Standards published the ‘Consumer Harm Report’ in October.  The report highlights a worrying link between Universal credit and an increased use of loan sharks

The Illegal Money Lending Team at Trading standards has identified the biggest emerging threat as the combined effect of the introduction of universal credit and the cap on pay day loans.  Trading Standards anticipates that loan sharks will take advantage of those on a low income who may struggle to find credit from mainstream sources. 

According to recent research:

• 2.5 million people will require support to manage their money in the move to Universal Credit – this same group of people are also likely to be financially exclude
• 42% said monthly payments would make budgeting more difficult
• 73% of people likely to be eligible for Universal Credit will need help managing their monthly payments

Improved protection for whistle blowers in financial sector

The Financial Conduct Authority, alongside the Prudential Regulation Authority, has published new rules in relation to whistle-blowing.  These changes follow recommendations in 2013 by the Parliamentary Commission on Banking Standards that banks put in place mechanisms to allow their employees to raise concerns internally and that they appoint a senior person to take responsibility for the effectiveness of these arrangements

Cost of homeownership to increase by 54% by 2030

Mortgage Strategy has highlighted a recent report by Legal & General, which predicts the annual cost of ownership will hit £15,300 this year, growing to an average of £23,120 by 2030. Legal & General Mortgage Club director Jeremy Duncom has encouraged people to "factor this into their finances so that they are able to cope when costs increase.”