Eligible Britons received the first part of a £650 cost of living payment on Thursday (14 July). But the initial £326 grant comes as a study found one in six UK households are now in ‘serious financial difficulties.'
The survey by Bristol’s Personal Finance Research Centre revealed that of the 4.1 million people who claimed they are facing hardship, 71% have reduced the quality of food they eat, 36% have sold or pawned possessions and 27% have cancelled or not renewed insurance in order to cut costs.
With inflation expected to rise to 11% in the autumn, and energy bills predicted to skyrocket to more than £3,300 by January 2023, what are banks doing to help customers during the crisis?
Which? spoke to some of the UK’s biggest banks, and found that while some had launched targeted cost of living support, others claimed existing services are either being ramped up to cope with demand, or already robust enough to provide the necessary support.
We'll update the article as we hear more.
Barclays
While Barclays hasn’t announced any new cost of living measures, it says it is taking steps to ensure its affordability assessments (mortgages and unsecured credit) reflect inflationary pressures to avoid potentially unaffordable lending. It also says its existing support is robust enough to help customers during the current crisis.
For example:
- Each month Barclays assesses customer accounts for signs of financial difficulties and contacts them to offer practical, tailored advice and support to help better manage their monies.
- The bank’s Money Worries Hub offers advice on how to cope with financial pressures, whether it’s gambling addiction or coping with financial loss.
- Barclays also offers money management sessions for people struggling to manage their budget. You can book a telephone or video appointment via the Barclays Money Mentors site.
- The Barclays app features tools to help people keep on top of their finances, such as card controls which allow users to set daily spending limits or turn off the ability to make online payments.
HSBC
New cost of living support hub launched
The bank launched a new Rising Cost of Living support hub in May. It aims to help customers understand why the cost of living crisis is happening, provide tips to help save on costs, and offer help on where to go for additional support for any customers who are struggling.
More staff are on hand to help
During the Covid-19 pandemic, HSBC increased the number of people in its financial support team. The bank says it has continued to operate at that level, claiming it is well positioned to offer extra assistance to customers during the current crisis.
Online banking tools
Online and app tools to help customers manage their finances were launched before the cost of living crisis began to bite, but the bank claims they are especially useful now.
The Balance After Bills tool in HSBC’s mobile banking app, for example, was launched in 2019 and is now used by 3 million customers a month. It works out the total amount that's due to leave your account from any standing orders or direct debits you've got set up, and leaves you with the remaining balance until your next payday.
This updates throughout the month, so you can see how many bills have already been paid, and how many are still to come. There's also a tool to help manage subscriptions.
If you're worried about your finances, you can try HSBC's assessment tool, which analysis spending, borrowing and savings habits to give a ‘fitness score’. Depending on the result, you'll be offered tips and support on ways to improve your finances.
Lloyds Banking Group (including Lloyds Bank, Halifax and Bank of Scotland)
The Lloyds Group isn’t currently offering any new support, but like other banks it sends regular communications to customers about services already available that can help people manage their finances. These include offering financial health checks and budgeting advice appointments with trained advisers.
The group says it also regularly writes to all customers in persistent debt, or repeat overdraft users, to advise on changes they can make to pay off their balance quicker and save money on interest.
The bank is also keen to promote how its mobile app can help customers budget and cut costs. One feature, for example, enables users to manage and cancel subscriptions within the app without having to contact the individual subscription providers. Customers can also freeze and unfreeze different types of transactions on debit or credit cards and can set their own contactless limit on their debit card. There are also controls for gambling, spending abroad, and online payments.
Nationwide
Cost of living hotline
In August, Nationwide will launch a free telephone hotline for customers affected by the cost of living.
Members experiencing money worries will be answered by trained experts from across the building society’s main branches. The service will be available from 9am-4.30pm weekdays and 9am-12 noon on Saturdays. Nationwide aims to answer calls to the hotline within 10 minutes.
Struggling customers will be contacted directly
Customers that Nationwide identifies as showing obvious signs of financial difficulties will be contacted by in-branch experts, from August. During the phone calls, experts will seek to better understand their situation and offer any advice to help them improve their circumstances.
Cost of living training for all frontline staff
To ensure customers are given the right advice and are directed towards the support they need, the provider says it's investing in extra training for all staff, whether in-branch or on the telephone.
Face-to-face appointments
From October, there will also be an opportunity for people to meet with one of Nationwide’s cost of living experts face-to-face, over the phone or via video. They will offer financial health checks, money management advice and saving tips.
There will also be regular virtual and in-branch workshops, where customers can receive practical help with managing money and avoiding financial pitfalls.
- Find out more: how to budget
NatWest Group (including Royal Bank of Scotland and Ulster Bank)
The NatWest Group has introduced an online cost of living hub, providing help and information for customers who are struggling, or worried about their finances. There, you can find online advice, and tools such as a spending tracker, budget calculator, and you can book a video call with a senior personal banker to help review your money situation.
The bank is also promoting its financial health and support services which it says works with specialist partners like PayPlan and Citizens Advice to provide expert help and advice.
For instance, if you're worried about missing a payment, or already have, you're encouraged to reach out as soon as possible via chat options on your banking app or via online banking. If you start the chat with the words 'struggling financially', you should be directed towards the right support.
Santander
Santander told us that the hundreds of new staff recruited and trained over the last year to join its financial care teams will help support customers during the cost of living crisis.
The provider is also offering the following help:
- Identifying customers who the bank thinks may be starting to feel the squeeze, and providing targeted messages and signposts to support via its website or with third-party debt organisations.
- Its online content is targeted around supporting customers during the cost of living crisis, with guidance and tools to help with budgeting.
- The My Money Manager feature in the mobile app can alert customers when their spending or bills change, and show them where their money is going by category.
- Customers can request free email and SMS alerts when their balance goes below a set amount, or when credit/debit payments are made.
Find out more: 17 ways to save money on your household bills and living costs in 2022
What to do if you're worried about your finances
If you're worried about keeping up with your mortgage, credit card or loan repayments - or you've missed payments already - you should contact your lender in the first instance. Even if they're not listed here, or providing specific cost of living support, they should still be able to help you find a remedy to the situation.
If you'd prefer, you can also get independent advice from a number of debt charities.
StepChange offers free, confidential debt advice from money experts, recommending the best solution based on your circumstances. Citizens Advice offers free guidance on everything from debt solutions to finding financial advice, while Money Helper can also advise about living on a squeezed income.
You can also read up on free advice from Which? on how to deal with debt.
source https://www.which.co.uk/news/article/cost-of-living-crisis-can-you-go-to-your-bank-for-support-aZkFE6s31suf