Figures reveal significant rise in number of card payments made by consumers

contactless cardData published by UK Finance has revealed that card spending totalled £57.1 billion in June – representing a 7% rise when compared to a year earlier.

1.4 billion card payments were made in June, which constitutes a 12% rise when compared to the same time last year.

Contactless payments accounted for 34% of all card transactions, the data found. Online payments constituted 13% of all transactions.

Spending in the retail sector rose by £19 million during June, to total £26.1 billion. Spending on food and drink increased to £10 billion in June.

Meanwhile, services sector spending rose by £138 million to reach £31 billion.

Richard Koch, Head of Cards at UK Finance, said: ‘Contactless payments accounted for a third of transactions in June, with consumers continuing to use their cards for lower value purchases.

‘While spending recorded a relatively modest monthly growth, the number of transactions rose at a faster rate with some 46 million card purchases made every day.’

credit cardData published by UK Finance has revealed that card spending totalled £57.1 billion in June – representing a 7% rise when compared to a year earlier.

1.4 billion card payments were made in June, which constitutes a 12% rise when compared to the same time last year.

Contactless payments accounted for 34% of all card transactions, the data found. Online payments constituted 13% of all transactions.

Spending in the retail sector rose by £19 million during June, to total £26.1 billion. Spending on food and drink increased to £10 billion in June.

Meanwhile, services sector spending rose by £138 million to reach £31 billion.

Richard Koch, Head of Cards at UK Finance, said: ‘Contactless payments accounted for a third of transactions in June, with consumers continuing to use their cards for lower value purchases.

‘While spending recorded a relatively modest monthly growth, the number of transactions rose at a faster rate with some 46 million card purchases made every day.’

FSB urges government to delay National Living Wage rise

downloadThe Federation of Small Businesses (FSB) has called on the government to consider whether forthcoming rises in the National Living Wage (NLW) rate may need to be delayed if the economy cannot bear the pace of change.

 

By 2020, the NLW will have risen to £8.75 per hour. The business group has suggested that any risk to the UK economy should be ‘built into the next NLW increase’, which is currently scheduled for April 2018.

 

The NLW should not rise any higher than £7.85 next year, the FSB has suggested.

The call to delay further increases comes following the FSB’s publication of new research, which revealed that 64% of small firms affected by the NLW have taken lower profits in order to meet the latest rate rise.

43% of small businesses have had to increase their wages to meet the demands of the NLW, the research also suggested.

Mike Cherry, National Chairman of the FSB, said: ‘Small employers have demonstrated their resilience in meeting the challenges set by the NLW, with many cutting their margins or even paying themselves less to pay their staff more.

‘In sectors where margins are tight, small firms are resorting to more drastic measures to cope with the NLW.

‘It’s vital that the NLW is set at a level that the economy can afford, without job losses or harming job creation. Cost pressures on small businesses are building, and with most recent economic indicators underperforming, we are now facing the reality that the NLW target may need to be delayed beyond 2020.’

New trade body to be created by government

The government has revealed its intention to create a new trade authority, termed the UK Trade Remedies Organisation, ahead of Britain’s departure from the EU in 2019.

The UK Trade Remedies Organisation will help to combat incidents of unfair trade that may occur once Brexit has taken place.

trade

It will also build upon the UK’s ‘capability and capacity’ to investigate complaints in relation to unfair competition, and will allow the UK to establish its own trade rules.

The government is looking to recruit around 130 employees, and intends to have the new organisation up and running by October 2018.

Commenting on the news, Jill Rutter, Programme Director at the Institute for Government (IfG), said: ‘The government needs to prepare for Brexit, and that includes being able to run our own system of trade defence.

‘The government’s current policy is to leave the single market and the customs union and has to be ready for leaving with no deal. So this is a sensible part of that contingency planning.’

State pension age reform leaves ‘large number of women worse off’

A report published by the Institute for Fiscal Studies (IFS) has suggested that women aged between 60 and 62 have become ‘worse off’ as a result of the recent rise in the state pension age.

pension

Between 2010 and 2016, the state pension age for women increased from age 60 to 63. The government intends to align the state pension age for women with the state pension age for men, which is currently age 65.

The report found that women between the ages of 60 and 62 have experienced a £32 reduction in their weekly household income since the change.

Poverty rates amongst women in this age group have risen ‘sharply’, the IFS suggested.

Jonathan Cribb, Senior Research Economist at the IFS, said: ‘The tax and benefit system is much more generous to those above the state pension age than those below it.

‘Since both rich and poor women are losing out by, on average, roughly similar amounts, the reform increases income poverty rates among households containing a woman who has reached age 60 but has not yet reached her state pension age.’

Significant number of savers open cash Lifetime ISAs

An estimated 28,000 individuals have taken out cash Lifetime ISAs with Skipton Building Society – the only provider currently offering a cash version of the product.

It revealed that the new cash Lifetime ISA is proving to be popular with younger savers in particular: 51% of accounts have been opened by individuals under the age of 30.

Introduced in April, the Lifetime ISA allows savers under the age of 40 to deposit up to £4,000 each tax year. They will then receive a 25% bonus from the government on any savings put into the account before their 50th birthday.

ISA

The tax-free savings and the government bonus can be put towards a deposit for a first home in the UK, or can be withdrawn from the age of 60 for retirement purposes.

Skipton Building Society’s cash Lifetime ISA currently offers a rate of 0.5%.

Kris Brewster, Head of Products at the building society, said: ‘We believe the Lifetime ISA could make a real difference to a new generation of savers, not only in helping them get a foot on the property ladder but providing them with another option to help them save for their future too.’

Other providers offer stocks and shares versions of the Lifetime ISA. However, some have chosen not to offer the product due to its complicated rules.

UK ‘won’t cut taxes post-Brexit’, Chancellor states

Chancellor Philip Hammond has suggested that the UK won’t cut taxes and fiscal regulations after Brexit.

brexit

The Chancellor stated that the UK will remain within the ‘EU average’ in terms of tax rates, and will not seek to reduce taxes in a bid to become more competitive.

He commented: ‘I often hear it said that the UK is considering participating in unfair competition in regulation and tax.

‘That is neither our plan nor our vision for the future.

‘I would expect us to remain a country with a social, economic and cultural model that is recognisably European.’

In January, Mr Hammond stated that the government may have to ‘change its economic model’ if the UK was unable to remain in the EU single market.

He commented: ‘We will change our model, and we will come back, and we will be competitively engaged.

‘I personally hope we will be able to remain in the mainstream of European economic and social thinking. But if we are forced to be something different, then we will have to become something different.’

The Chancellor’s recent statements come amid ongoing Brexit negotiations, with government officials debating the free movement of EU citizens in the UK.