Holiday debt hangover poised to be ‘particularly nasty’ this year, analyst says

Published

1 year ago

December 20, 2023

admin

While retail sales are strong, typically an indication of a healthy consumer, an industry economist is deeply concerned about how consumers will pay it all off when the bill comes.

Bankrate senior industry analyst Ted Rossman’s concerns were heightened, in particular, after noticing an uptick in usage for buy now, pay later (BNPL) services as consumers battle growing debt obligations.

These payment services were up 40% year over year on Black Friday and Cyber Monday, according to data from Adobe.

This uptick suggests that “a lot of people are close to the edge,” and it’s one reason why Rossman believes the “holiday debt hangover could be particularly nasty this year.”

“I think the substantial surge in BNPL usage (on top of already explosive growth in recent years) shows how many people are looking for quick, affordable financing,” he said.

These services like Klarna or Afterpay are advertised as interest-free loans that can be paid in weekly or monthly installments.

And while it can help ease cash-flow issues, financial experts say there are hidden risks when shoppers rely on the services too much.

“While one could use these plans to their advantage, I do worry theyre too easy sometimes, and there isnt enough visibility on credit reports, and sometimes people can trick themselves into spending too much,” Rossman said.

For example, four $50 payments don’t sound like a lot, but Rossman said it “conceals the fact that its really $200, and you may already have multiple similar plans running with different providers.”

Consumers can hit late fees if they don’t have the funds to cover the installments, pushing them deeper into a hole.

Credit cards can be a great tool when they are paid in full and consumers maximize rewards. However, only about 53% of cardholders do so.

For the 47% who carry a balance month to month, credit card debt can be a big problem.

What’s worse, balances and rates “have never been higher,” he said.

Several years of high inflation and high interest rates have “eroded a lot of households savings and buying power.” If families are stacking more debt on top of that during the holiday season, it “poses trouble at least at the household level,” he noted.

Rossman noted that any excess savings from the pandemic are pretty much gone at this point, “so I worry the rising debt trend could catch up to people, especially if the job market takes a turn for the worse.”

Business

John Lewis Partnership profits leap but no bonus for third consecutive year

Published

16 mins ago

March 13, 2025

admin

John Lewis Partnership profits leap but no bonus for third consecutive year

The John Lewis Partnership (JLP) has revealed a 73% rise in annual profits but says staff will receive no bonus for the third year in a row.

The employee-owned business, behind John Lewis department stores and Waitrose supermarkets, said earnings over the 12 months to January came in at £97m – up from the £56m achieved in the previous year.

Group sales rose 3% to £12.8bn, driven by Waitrose, in a year when the department store chain restored its ‘Never Knowingly Undersold’ price promise that was scrapped in 2022.

Money latest: Top chef reveals one thing customers should know about their bill

New chair Jason Tarry signalled a further £600m investment in its operations on the back of the improved profit performance and a focus on regular pay for staff, known as partners, over a one-off reward.

A 7.4% wage rise was revealed earlier this month as the business moved to bolster retention amid the barren spell for annual bonuses that has only seen one paid out over the last five years.

The last financial year marked only the fourth time since 1953 that JLP had not awarded a bonus.

Mr Tarry, who succeeded Dame Sharon White six months ago amid a post pandemic turnaround plan that included the closure of underperforming stores and thousands of job losses, said “careful consideration” had been given to the bonus.

He told the group’s 73,000 partners: “These are solid results, which show that our customers are responding well to our investments in quality products, value and service.

“We have made good progress with much more still to do.

“Looking forward, I see significant opportunity for growth from both our Waitrose and John Lewis brands.

“Our focus will be on enhancing what makes these brands truly special for our customers.

“This will involve considerable catch-up investment in our stores and supply chain.”

Politics

Apple vs Home Office encryption court battle must be held in public, say MPs

Published

16 mins ago

March 13, 2025

admin

Apple vs Home Office encryption court battle must be held in public, say MPs

Any court showdown between Apple and the Home Office over customer data must be held in public, MPs have demanded.

It comes after the tech giant announced last month that it would no longer offer UK customers its most advanced, end-to-end security encryption feature for cloud data storage following a row with the government.

The dispute was sparked when ministers reportedly decided to issue Apple with a Technical Capability Notice (TCN) demanding the right to see the user data.

Legally, neither of the parties can publicly confirm the existence of the order.

Politics latest: Cabinet minister apologises in Commons

However, ComputerWeekly and others have reported that Apple has launched an appeal against the TCN, with an initial hearing set to be heard on Friday before the Investigatory Powers Tribunal at the High Court in London.

A court listing document shows a behind-closed-doors application is due to be held before Lord Justice Singh and Mr Justice Johnson.

Veteran Tory MP and civil rights campaigner Sir David Davis told Sky News: “If the Home Office wants to have effectively unfettered access to the private data of the (innocent) general public, they should explain their case in front of the public.”

Also speaking to Sky News, Liberal Democrat technology spokesperson Victoria Collins said: “The move by the government endangers people here in the UK and sets a dangerous precedent for authoritarian regimes across the globe…

“I’m proud to add my name to the call for the hearing on this crucial issue to be open to the public. People deserve to know what’s happening to their private personal information.”

Reform UK chief whip Lee Anderson said: “If the government wishes to pry on its people, they can make that claim in public. This now puts the security and privacy of the British people at risk.

“The government should have as little involvement in our personal lives as possible. Not in our tweets, not in our text messages, and certainly not with full access to our phones.”

Prior to its removal in the UK, Apple‘s Advanced Data Protection service allowed users the ability to encrypt their data in such a way that no one, not even the tech company, would be able to access it.

Critics fear the use of end-to-end encryption – where third-party access is impossible – could help criminals like paedophiles hide their activity from authorities.

However, providing access to encrypted data, whether to a government or a company, provides potential pathways for third parties such as hackers to access information.

Successive governments have said they want to restrict the use of the function.

Apple has never commented on the TCN, but said in a previous statement: “Enhancing the security of cloud storage with end-to-end encryption is more urgent than ever before.

“Apple remains committed to offering our users the highest level of security for their personal data and are hopeful that we will be able to do so in the future in the United Kingdom.

“As we have said many times before, we have never built a backdoor or master key to any of our products or services and we never will.”

The Home Office declined to comment.

Politics

Ousted Reform MP Rupert Lowe consulting lawyers over libel action, Sky News understands

Published

16 mins ago

March 13, 2025

admin

Ousted Reform MP Rupert Lowe consulting lawyers over libel action, Sky News understands

Rupert Lowe is consulting lawyers about taking possible libel action against Reform UK, Sky News understands.

The Great Yarmouth MP has accused the party of making “untrue and false allegations” about him after he criticised leader Nigel Farage in the media, sparking a bitter public row.

Politics Live: Starmer promises to ‘keep all options on the table’ after UK hit by Trump tariffs on steel

A day after the 67-year-old questioned whether Mr Farage could make it as prime minister, Reform UK announced on Friday it had referred him to police and suspended him, alleging he made “verbal threats” against chairman Zia Yousaf.

The Met has launched an investigation into these claims, which Mr Lowe has vehemently denied.

Reform has also claimed it has received complaints from two female employees about serious bullying in Mr Lowe’s constituency office.

The now independent MP has strenuously denied these claims as well, saying the allegations do not relate to him and were made by staff who themselves faced disciplinary action.

Mr Lowe believes he is the victim of a “witch hunt” after speaking out against the party’s leadership in an interview with the Daily Mail that was published last week, in which he challenged Mr Farage’s “messianic” tendencies.

He has not ruled out joining the Conservatives or another political party, while Mr Farage has said there is “no way back” for the suspended MP and accused him of being “out to cause maximum damage” to Reform UK.

The feud could deepen still with Mr Lowe now mulling legal action over claims made about him during the ongoing war of words, it is understood.

The former Southampton FC chairman has accused Mr Farage of spreading “outright lies” after he told GB News that he “knows for a fact” Mr Lowe was informed of a parliamentary investigation into bullying allegations on 29 Feb and gave an interview with the Mail “shortly after that”.

According to the Mail, the interview was held on 25 February – days before Mr Lowe received a letter from Reform’s chief whip Lee Anderson informing him of concerns over his conduct.

The letter, seen by Sky News, was from Reform rather than parliament and says the parliamentary party has determined an independent investigation is the best course of action.

Mr Lowe has urged Mr Farage to “apologise, retract and correct the record,” posting on X: “To suggest I used the interview to deflect from any investigation is factually untrue. I have heard absolutely nothing from parliament about any of this.”

Mr Lowe also denies claims made by Mr Anderson that he has not co-operated with the independent inquiry into his behaviour.

Last night, seven members of his team put their names on a statement coming to Mr Lowe’s defence, saying he is a “good, decent and honest man”, that they have never witnessed “violent or vicious” behaviour and allegations of bullying are “robustly denied by all of us”.

Sky News has contacted Reform UK for comment.

The row poses danger for a party that has its sights on entering government at the next election after a meteoric rise in the polls.

In his interview with the Mail, Mr Lowe said it was “too early to know” if Mr Farage will become prime minister and warned Reform remains a “protest party led by the Messiah” under the Clacton MP.

He also claimed that he was “barely six months into being an MP” himself and “in the betting to be the next prime minister”.

During Mr Farage’s online falling out with Elon Musk, in which he said Reform needed a new leader, Mr Lowe drew praise from the Space X billionaire.

In a move seen as a hint of a new splinter group, another ousted Reform UK politician, former deputy leader Ben Habib, told The Daily Telegraph that Mr Lowe was a “good friend” and he was “constantly in touch with” him.