A quieter week this week news-wise, with the main highlight being revised guidelines on payment holiday continuation for customers with mortgages. Those in need can continue to get relief, but at this point, it will start to be reflected on a consumer’s credit file… and with the court and enforcement process starting up again too gradually it feels as if we are returning to what feels a little more normal.

However, with so many changes coming together at the same time, a crunch is coming… and I suspect one that will be significant for some. A look at what is ahead….

• The end of extended payment holiday support
• Winding down of furlough
• An economic downturn and business closures
• Business restructuring (I mentioned STA last week, Pret A Manger this week)

… and although arrears levels are currently fine, it is likely they will spike once this flow through. (we have as an example the US where they are now starting to spike – again sectorally driven). It is going to be a ‘interesting’ time, and challenging for many.

Elsewhere there is still plenty of discussion around returning to the office. Many businesses are saying no, yet the government is saying yes… but what about the employees, well 9 out of 10 of us like having some time WFH at least…. most people I know have actually found it more productive too…. hopefully we will reach some sort of new balance.

Have a good weekend everyone… @chris_w_tweet

This was a week when it felt the economic stresses of lockdown really seemed to starting to show and were reported more widely.

All of this still seems to be building towards some sort of crunch point at the end of the summer, early autumn.

After the summer is after all when the UK furlough (which still covers 12% of the workforce) and payment deferral schemes are due to expire. Evictions are also due to restart in England too.

All of this piling more pressure on the consumer at the same time… potentially a building storm front.

• In the short term, however, the payment deferral schemes are somewhat hiding the impact. Mortgage arrears are falling, repossessions are down and personal insolvencies decreasing…. by definition, the payment holiday means even those struggling will not yet be arrears.
• Some consumers have clearly used this breathing space to pay down debt, with 1 in 3 using lockdown savings to do this… this is as much a reflection of the level of borrowing as anything else.
• With 1 in 9 people reporting they are struggling to keep up with household bills there are concerns around whether this will cause a spiral of debt for some folks once the support ends.

It is not necessarily all bad news for everyone though, there were some brighter spots showing a bounce back somewhat quicker than expected.

Have a good weekend everyone…. @chris_w_tweet