Hundreds of thousands of Barclays and Santander customers have taken credit card, personal loan, and mortgage vacation, the banks said in the results today.
At the same time, official figures from the Bank of England show that households have paid billions of pounds in debt in recent months.
Britain's third-largest mortgage lender Santander said in its half-year results that more than a fifth of mortgage borrowers, a total of 239,000, had applied for three-month breaks for home loans totaling £ 37.1 billion.
However, the number of customers still on payment vacation had dropped to 7 percent by July 15, the bank said, as thousands did not take the option of another three-month break and instead started repaying again.
On vacation: By July 9, 1.05 million credit card payment holidays had been taken, the UK Finance trade organization announced. Barclays and Santander announced on Wednesday that they had spent 183,000
The vast majority – 206,000 – of these mortgage vacations had been claimed until April 24th, indicating a first surge in payment interruption requests after regulators introduced them in March. Few homeowners saw their circumstances change between April and June as needed take one.
The British branch of the Spanish bank, which saw its profit drop nearly 75 percent in the same half of last year as it prepared for hundreds of millions of non-performing loans, also revealed one in ten home borrowers and 26,000 credit card customers had taken a vacation break at the end of June.
In the meantime, Barclays said it had spent vacation leave on 157,000 credit cards, 106,000 loans and 121,000 mortgages on loans totaling £ 16.2 billion.
The numbers in the results mean that Barclays alone spent almost 15 percent of the 1.05 million credit card payment vacation granted by banks through July 9 and 15 percent of the 707,000 vacation vacation on unsecured loans.
How many customers took payment leave?
– 157,000 GBP 0.7 billion credit card holidays – 5% of the book
– £ 106,000 vacation rental worth £ 0.6bn – 11% of the book
– 121,000 GBP 14.9 billion mortgage leave – 10% of the book
– £ 26 billion worth of credit card vacations – 4% of the book
– 28,000 loan holidays worth £ 0.2 billion – 10% of the book
– 239,000 GBP 37.1 billion mortgage leave – 22% of the book
Britain's largest bank Lloyds will announce its half-yearly results tomorrow.
According to the UK Finance retail organization, a total of 1.9 million mortgage payment vacations were spent, but it has not been possible to confirm how many of these customers have started resuming repayments.
The results of the two major banks came when the Bank of England found that the amount owed to credit cards and loans had dropped a record amount in March over the past 12 months thanks to a huge slump in borrowing and spending.
Four months of low borrowing mean that the amount households owe credit cards and loans has decreased from GBP 225.3 billion in February to GBP 207.1 billion last month.
This is a decrease of 3.6 percent from the amount outstanding in June 2019, the largest year-on-year decrease since records began in 1994.
While net repayments fell from GBP 4.6 billion in May to GBP 86 million last month as consumer borrowing "recovered a little", it remained "well below pre-coronavirus levels," the bank said of England.
An average of £ 1.1bn more was borrowed each month in the 18 months to February 2020.
|month||Amount owed on credit cards||Monthly change||Monthly percentage change||Annual percentage change|
|January||£ 72.1 billion||£ 0.2bn||0.2%||4.3%|
|February||£ 71.9 billion||£ 0.0bn||0.0%||3.5%|
|March||£ 69.3bn||£ -2.4 billion||-3.3%||-0.3%|
|April||£ 64.1bn||£ -5.0 billion||-7.2%||-7.8%|
|Can||£ 62.1 billion||£ -1.8 billion||-2.8%||-10.7%|
|June||£ 61.6 billion||£ -0.2 billion||-0.4%||-11.6%|
|Source: Bank of England (seasonally adjusted data)|
Alistair McQueen, head of savings and retirement provision at Aviva, said: & # 39; Today's latest data shows that Britain is rapidly becoming a nation of savers.
& # 39; Bank of England data shows that households have repaid five years of credit card debt in just five months.
"Outstanding credit card debt is now £ 61.6 billion, after a peak of £ 72.9 billion in 2019, bringing us back to levels we haven't seen since 2015."
The Bank of England found that around £ 248m more credit card debt was repaid than was loaned in June.
A V-shaped recovery? Consumer borrowing remained below pre-coronavirus levels in June, but households paid back £ 86m more than they borrowed, compared to £ 7.4bn in April
Although households repaid an average of £ 18.5 billion in consumer debt between April and June, this was lower than the £ 24.6 billion recorded in February.
This suggests that Britain's lower mountain of debt is due to the closure of large parts of the economy and the inability of consumers to spend money, rather than households making concerted efforts to bring their finances back to profit.
Bank of England data shows that households have paid back five years of credit card debt in just five months
Alistair McQueen, Aviva
The results from Barclays and Santander also showed how much customers had saved in the first six months of this year. Barclays customers saved £ 20.2 billion and increased the bank's UK deposits by 10 percent.
Santander saw its deposits increase by £ 7.9 billion in the first six months of this year, further demonstrating how the ban had led to a nation of "accidental savers".
However, those billion pounds of savings are unlikely to earn a lot of interest as Barclays is the last big name on the main street to save just £ 1 interest per £ 10,000.
Savers should switch to a better deal and find the best prices in This is Money & # 39; s Best Buy tables.
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(tagsToTranslate) Dailymail (t) Money (t) Credit Card Loans (t) Corona Virus