Direct Debit failure rates

It's no surprise direct debit failures have risen and equally we can expect them to continue to rise given that the UK is technically in recession. Credit cards and overdrafts will get exhausted as the availability of unsecured credit dries up for many struggling with the cost of living crisis. Factor in rising mortgage costs for those refinancing and you will have a population that will start taking to the streets.

Assuming that many of these cancellations will be for a mortgage, finance or other essential bills, it is yet another indication of the deterioration of the UK economy, supporting today's GDP data and the slip into recession. Anyone contemplating this really needs to speak with their lenders first, make arrangements and use the tools within the Mortgage Charter to bring their costs down in the short term. To do nothing will be the worst decsion many will make unfortunately.

Another alarming stat from the Office for National Statistics, which provides further evidence of the stress household budgets are under.
An increase in Direct Debit failures shows that people are struggling to prioritise spending as the cost of living crisis rumbles on and they move onto much higher mortgage rates. Government action is needed to provide much needed financial respite to the public, especially as we have dipped into a recession this morning.

With the grim GDP report out today and Chancellor Jeremy Hunt admitting that today's data is challenging, it's no suprise that many are starting to struggle to pay their bills and that direct debit failures are on the rise. With the goverment's focus largely centred on the need to bring inflation down, will there be any real attention brought to the plight of those struggling to make ends meet? Those that need help now are less concerned about the medium to long term outlook but what is happening to them now. With the build-up of pressue and the cost of living crisis, couple with higher mortgage rates and increased rents, is it any wonder Direct Debits are not being paid?

This is something I have seen an increase in on borrowers' bank statements. People are really struggling and some bills are inevitably being missed. Also, credit is so readily and more easily available to spread over months that we are seeing a large uptick in household items, some with very low payments, being spread monthly.