Debt, Tesco Bank, food prices and equity release

Household debts have risen to £1.5 trillion for the first time in the UK, new statistics reveal.

Indebtedness is growing at the quickest rate since before the credit crunch of 2008, says the Money Charity. The BBC reports that UK adults owe an average of nearly £30,000 each – mostly in mortgages, but also in loans and credit cards – 83 per cent of the country’s annual economic output. Some 87 per cent of this debt is in the form of mortgages, secured by property. But UK adults also now owe an average of £3,737 in loans and credit cards.

Tesco Bank

Tesco Bank has stopped online payments for current account customers after money was taken from 20,000 accounts.

The bank’s chief executive Benny Higgins told the BBC he was ‘very hopeful’ customers would be refunded within 24 hours. About 40,000 accounts saw suspicious transactions over the weekend, of which half had money taken, he said. Customers will still be able to use their cards for cash withdrawals, chip and pin payments, and bill payments. Food prices Birds Eye fish fingers and Walkers crisps are asking supermarkets for price rises of up to 12 per cent, in the latest standoff between household brands and retailers over the drop in the value of the pound. The Guardian reports that the brands have joined Typhoo and Unilever, the owner of Marmite, and a number of smaller suppliers in an industry-wide battle over price increases caused by the 14.5 per cent drop in the value of the pound against the euro and 18 per cent against the dollar since the UK voted to leave the European Union. Equity release

Older homeowners have unrealistic expectations about how much money they will raise from downsizing as a lack of suitable homes drives up prices, research for equity release referral service Key Partnerships suggests.

Its nationwide survey of estate agents found firms are seeing growing demand from clients looking to downsize to raise cash with two out of three reporting a rise in enquiries over the past year. The main reason clients want to downsize is to raise cash with 60 per cent of estate agents saying customers aim to boost retirement income while a third say clients are looking to clear mortgages.

But 72 per cent of estate agents say older homeowners have unrealistic expectations about the money they can make.

In other housing news, Halifax says today that annual house price inflation in the UK is now at its lowest rate since July 2013. It fell to 5.2 per cent in the year to the end of October, down from 5.8 per cent in the previous month.

Pensions Theresa May will decide whether to ditch the so-called triple lock on state pensions before the next election, according to The Times. Pressure to scrap the safeguard grew yesterday with a report by the House of Commons’ work and pensions committee that concluded it was unsustainable. Damian Green, the work and pensions secretary, has previously hinted that the lock, which guarantees a minimum annual rise to state pensions of 2.5 per cent, could be phased out ‘over time’. Government sources insisted, however, that the lock would stay in place until the election, due in 2020, because it was a manifesto promise. Meanwhile, millions of savers with older pension policies are to be included in a new digital initiative which will allow customers to see all their pension savings in one place, the Financial Times reported over the weekend. So-called ‘closed book’ pension providers – those which have stopped accepting new policyholders – are among six firms that recently signed up to a pensions dashboard being developed by the industry. Benefits The BBC reports that a cut in the benefits cap – a limit on the income working age households can receive in certain benefits – has now come into force. The cap has been reduced from £26,000 a year to £20,000 a year in the UK – except in Greater London where the limit is £23,000 a year. This was part of £12 billion in welfare cuts announced in former chancellor George Osborne’s Budget in July last year.