Money
How Rising Interest Rates and Credit Costs Impact U.S. Consumers
Rising Interest Rates and Credit Costs: How Higher Borrowing Costs are Impacting U.S. Consumers
The U.S. economy is facing one of its most challenging financial landscapes in recent years, with rising interest rates and increasing credit costs at the forefront. As the Federal Reserve continues to adjust interest rates in an effort to combat inflation, the effects on consumer borrowing and spending are becoming more apparent. Higher interest rates impact everything from mortgages to credit cards, auto loans, and student debt, placing a heavier burden on households nationwide. This trend is altering spending habits, limiting disposable income, and creating financial stress, particularly for families with variable-rate debts.
Understanding the Federal Reserve’s Rate Hikes
The Federal Reserve (Fed) sets the benchmark interest rate, or federal funds rate, which influences the rates at which banks lend to each other. This rate also affects borrowing costs for consumers, as it determines the base rate for a range of consumer loans. When inflation began to rise sharply, driven by supply chain disruptions and increased consumer demand, the Fed responded with a series of rate hikes. The idea behind raising rates is to make borrowing more expensive, which in turn cools spending and helps slow inflation.
While the Fed’s goal is to bring inflation under control, these rate hikes have had unintended consequences for U.S. consumers, increasing the cost of credit and affecting the financial health of many households.
Impact on Mortgages and Housing Affordability
One of the areas most affected by rising interest rates is the housing market. Mortgage rates, which are closely tied to the federal funds rate, have increased significantly over the past year. The average rate for a 30-year fixed mortgage recently reached its highest level in decades, making homeownership less affordable for many prospective buyers.
Higher mortgage rates mean that monthly payments on new loans are considerably more expensive. For instance, a mortgage rate increase from 3% to 6% can add hundreds of dollars to the monthly payment on a typical home loan. This sharp rise has pushed many potential homebuyers out of the market and left others with fewer options, as they can no longer afford the same level of home they could just a few years ago.
For existing homeowners with adjustable-rate mortgages (ARMs), the impact can be even more severe. Unlike fixed-rate mortgages, ARMs have interest rates that adjust over time, typically in line with market rates. As the Fed’s rate hikes push interest rates higher, homeowners with ARMs are seeing their monthly payments increase as well. For many, these adjustments represent a substantial increase in housing costs, stretching budgets thin and forcing some households to reconsider their financial priorities.
Credit Card Debt: Rising Rates and Minimum Payments
Credit cards are another area where rising interest rates are having a significant impact. Most credit cards come with variable interest rates, meaning that the annual percentage rate (APR) can fluctuate based on changes in the federal funds rate. As the Fed raises rates, credit card interest rates tend to increase in response, making it more expensive for consumers to carry balances from month to month.
For consumers who don’t pay off their balance in full each month, rising interest rates mean higher minimum payments and longer payoff times. Even a small increase in the APR can result in a noticeable jump in monthly payments, which can make it harder for consumers to manage their debt effectively. For example, a credit card balance of $5,000 at an interest rate of 15% would take more than 13 years to pay off if only the minimum payment is made each month. If the rate rises to 20%, the payoff period extends further, adding hundreds or even thousands of dollars in interest charges over time.
This increase in credit card interest rates disproportionately affects households with lower incomes, who are more likely to carry balances and rely on credit cards for essential purchases. As monthly payments rise, these households may find it increasingly difficult to manage debt, leading to higher levels of financial stress.
Auto Loans and the Cost of Car Ownership
Auto loans are another area affected by rising interest rates. With the average interest rate on new auto loans increasing, monthly car payments are becoming more expensive, putting pressure on household budgets. For many Americans, owning a car is a necessity rather than a luxury, especially in areas where public transportation options are limited. However, the added cost of higher loan payments, combined with already high vehicle prices, is making car ownership less affordable.
For those with existing auto loans, rising rates may not have an immediate impact. However, for those in the market for a new vehicle or refinancing an existing loan, higher interest rates mean larger monthly payments and higher total interest costs over the life of the loan. This trend has already led to a slowdown in auto sales, as consumers delay or forgo purchases due to affordability concerns.
The impact is particularly challenging for households with lower credit scores, as they often face higher interest rates on auto loans. These consumers may find themselves unable to afford a reliable vehicle, which can limit job opportunities and increase transportation expenses, further straining their financial situation.
Student Loans: Implications of Higher Rates on Education Financing
Student loans represent a major financial burden for many Americans, and rising interest rates have implications for both new and existing borrowers. While federal student loan interest rates are fixed for the life of the loan, new federal loans issued each year carry interest rates that reflect the broader market environment. For private student loans, which often come with variable interest rates, borrowers may see their rates and monthly payments increase in response to the Fed’s actions.
For students and recent graduates, higher interest rates mean that the cost of borrowing for education is rising, adding to the long-term burden of student debt. As graduates enter the workforce, they may find themselves with less disposable income to allocate toward savings, investments, or other financial goals, as a larger portion of their earnings goes toward repaying student loans.
Higher interest rates also impact those looking to refinance existing student loans. While refinancing can be a way to secure a lower interest rate and reduce monthly payments, the current rate environment has made it difficult for borrowers to find favorable terms. As a result, many borrowers are unable to take advantage of refinancing opportunities, which limits their ability to reduce debt more efficiently.
The Ripple Effect: Reduced Consumer Spending and Economic Impacts
As interest rates rise and credit costs increase, the ripple effect on consumer spending is becoming more apparent. With more income allocated toward debt payments, households have less discretionary income to spend on nonessential goods and services. This reduction in spending can have broader economic impacts, particularly for industries that rely on consumer purchases, such as retail, dining, and entertainment.
Reduced consumer spending also affects small businesses, which may experience slower sales growth as customers cut back on discretionary purchases. In response, some businesses may delay hiring or limit expansions, which can have a negative impact on job creation and economic growth.
For the economy as a whole, the combination of higher debt costs and reduced consumer spending creates a cycle that can be challenging to break. As households reduce spending, businesses may see lower revenues, leading to reduced investment and potential job losses. This, in turn, can further reduce consumer spending, creating a feedback loop that can slow economic recovery.
Strategies for Managing Rising Credit Costs
In light of rising interest rates, consumers can take several steps to manage their finances more effectively and reduce the impact of higher credit costs. Some strategies include:
- Paying Down Debt: Reducing outstanding debt balances can help mitigate the effects of rising interest rates. By focusing on paying off high-interest debt, such as credit cards, consumers can reduce their monthly payments and limit the total amount of interest paid over time.
- Refinancing Fixed-Rate Loans: While refinancing may be challenging in a high-interest-rate environment, consumers with good credit may still find opportunities to refinance fixed-rate loans, such as mortgages, to secure a lower rate.
- Building an Emergency Fund: Having a financial cushion can help households avoid relying on high-interest credit cards during times of financial stress. Building an emergency fund can provide a buffer against unexpected expenses and reduce the need for costly borrowing.
- Limiting Variable-Rate Debt: Consumers should consider avoiding new variable-rate loans, which are more likely to increase in cost as interest rates rise. Instead, opting for fixed-rate loans can provide greater stability and predictability in monthly payments.
- Creating a Budget: Tracking expenses and creating a budget can help households identify areas where they can cut back on discretionary spending. By managing cash flow more effectively, consumers can allocate more income toward debt repayment and savings.
Looking Ahead: The Future of Interest Rates and Consumer Credit
The outlook for interest rates remains uncertain, as the Federal Reserve continues to assess economic conditions and inflationary pressures. While some experts predict that rates may stabilize or even decrease in the coming years, others caution that inflation may require sustained rate hikes to bring under control. For consumers, this uncertainty underscores the importance of taking proactive steps to manage debt and build financial resilience.
The rising cost of credit presents a challenge for many American households, impacting their ability to buy homes, cars, and other essential goods. By understanding the factors driving these changes and adopting strategies to mitigate the effects, consumers can better navigate this challenging financial environment. As the economy adjusts to higher interest rates, the resilience and adaptability of American consumers will play a critical role in shaping the path forward.
Money
People urged to check Hot Wheels to see if they have a toy worth £3,200 as rarest and most valuable cars revealed
IF you have a few Hot Wheels cars in your attic from when you were a child, now may be the time to check how much they could be worth.
Rare Hot Wheels models can fetch as much as £3,200 at auction, according to Peter Morris, an avid Hot Wheels collector and auctioneer at Vectis Auctions.
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Hot Wheels are a brand of model cars and race tracks, created my Mattel – the inventor of Barbie – in 1968.
While the majority of toy cars are unlikely to fetch thousands of pounds, you could still walk away with a handsome profit.
How to spot a rare and valuable car
Original Hot Wheels cars from the 1960s and 70s tend to be the most valuable, Mr Morris said.
“The most expensive ones are the original red line cars, which were made in the first ten years of production,” he explained.
“You can spot them because each tire will have a red ring on it.”
The cars should also have a date on the bottom of the base which will tell you when they were made.
Look out for cars that were produced between 1968 and 1977, he said.
These cars can be picked up for about £30 to £50 but can sell for hundreds of pounds at auction.
“The most expensive one we sold was £3,200,” Mr Morris said.
“It was a Mustang Boss Hoss and still had its original card box as if it had come straight from the shop.”
But it does not matter if you still have the box as these cars are still valuable without it.
Focus on the condition of the car as this will dictate how much it is worth, warns Robert Wilkin, an auctioneer at C&T Auctioneers and Valuers.
“The value of a car will depend on whether the paint is chipped and if the wheels go round,” he said.
“The axles on Hot Wheels cars are a lot thinner than on a Matchbox car because that makes them spin quicker, which makes them go faster on the track.
“If the wheels still go round nicely then the car is worth more money than if it’s got bent axles and the wheels are out of shape.”
How to spot an expensive Hot Wheels car
It can be difficult to tell how much your Hot Wheels car is worth.
Here Robert Wilkin, auctioneer at C&T Auctioneers and Valuers, shares how to spot them:
The valuable cars have got red lines around the wheels.
They often look almost like space age or old Cameros and Ford Mustangs.
The more decorated they are and the more fancy graphics they have on them, the more modern they will be.
This won’t necessarily mean that they are worth more.
Look out for the plainer looking, metallic colours rather than graphic details on the cars.
Usually they have a metal base, but more modern ones have a plastic base.
Look out for markings such as a circle with a flame on the packaging as sometimes this will indicate that it is a treasure hunt car.
Do not worry if you cannot get your hands on an original Hot Wheels vehicle as more recent models can still fetch hundreds of pounds.
In 1995 Hot Wheels maker Mattel began to release a limited number of “Treasure Hunt” cars into its regular selection.
In the very first set only 10,000 of each of the 12 treasure hunt vehicles were released.
Early versions can be identified by a horizontal green stripe, with “TREA$URE HUNT SERIES” written on the packaging.
More modern cars have a circle with a flame in it on the packaging or car to indicate that it is a treasure hunt car.
Meanwhile, in 2007 Super Secret Treasure Hunts were introduced as part of a revamp of the Treasure Hunt system.
These were spun off into a “hidden” series in 2012, when Super Secret Treasure Hunts were released with mainline cars.
To spot them, look out for a gold Treasure Hunt flame logo on the packaging.
The value of these cars can vary but some will be worth hundreds of pounds each, Mr Wilkin said.
“Some treasure hunts will be only worth about £10 in the box and some of them are worth up to £200, depending on which treasure hunt car you find,” he said.
“If they’re a more desirable sort of car then they could be worth a couple of hundred pounds each.”
It does not generally matter what year they were released in so look out for cars which were produced in the 1990s and 2000s or more recently.
Some of the modern cars which were produced to coincide with the release of films do hold their value, he adds.
“There’s a lot of Batmobiles out at the moment in the last year which could be worth getting,” he said.
“One is designed to look like a Scooby-Doo van which is quite a nice one.”
How can I sell my Hot Wheels online?
You can sell your Hot Wheels car online through websites such as eBay and Facebook Marketplace.
You will need to set up a listing for your Hot Wheels which must include pictures, a price and key information such as the year the car was released.
To do so you will need to take pictures of your Hot Wheels car.
Make sure to take a photo of any wear and tear on the surface, wheels or base of the car.
Try to find a professional photo from the manufacturer of the car from when it was first released.
This will help anyone interested in buying your car to visualise what it looked like when it was first bought.
Next upload your photos to the website of your choice and begin to build your listing.
You should write a description of the item and include the make and model of the car and the condition it is in.
If you want to buy a Hot Wheels car online then do not worry too much about whether it is genuine or not.
Mr Wilkin said: “Most of the time the car itself will be genuine. If it is in a sealed packet most of the time it will be real.”
If you are planning to buy an expensive car or you think that yours may be worth a lot of money then it may be worth contacting an auction house.
An expert can look at the car to make sure that it is original and can verify that your car is genuine.
Specialist auctioneers such as C&T Auctioneers and Valuers, Sotheby’s and Vectis Auctions can help you to value your item.
You do not need to live near the auctioneer to sell with them. Check the firms’ websites for more information.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
CHRISTMAS is fast approaching and festive ads are appearing on televisions, but John Lewis is always the most anticipated.
More than half a dozen Christmas adverts have already been from retailers including M&S, Sainbsury’s, Asda and Tesco.
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But John Lewis had chosen to keep its audience on tenterhooks, teasing the release of its 2024 ad campaign.
For the first time ever, the retailer is launching a trio of festive ads with two already having been unveiled.
John Lewis unveiled part one in its series of three ads in September, with the clip themed around the retailer’s “Never Knowingly Undersold” pledge.
The ad, directed by Saatchi and Saatchi, first aired on Channel 4 and shows viewers a single John Lewis shop window through the decades, from the roaring 1920s to modern day.
The second clip, which aired earlier this month, is based around the “Give Knowingly” theme.
The ad chronicles the ups and downs of one shopper’s pink jumper bought for her by her mum.
The final teaser is a short 10-second clip featuring a sofa on an ice rink in a dark room with winter clothing-clad skaters circling it.
After around seven seconds, a date emerges from the background saying “14.11.24” before fading away.
This reveals the date that the ad will finally hit our screens.
To make you feel nostalgic ahead of the 2024 John Lewis release, we have rounded up every single John Lewis Christmas advert that’s aired since 2007.
2007 – Shadows
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In John Lewis’ first Christmas advert, people piled gifts together to create shadows that looked like a woman walking her dog through the snow and having a drink at a party.
It featured the tagline “Whoever you’re looking for this Christmas”.
The memorable ad was before the era that John Lewis adverts created a huge buzz as social media was barely even a thing at this point.
The music used was Prokofiev’s morning serenade from Romeo and Juliet.
2008 – From Me To You
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This was probably the most basic John Lewis advert with the retailer trying to work out which direction its adverts would take.
Set to a cover of The Beatles‘ From Me To You, it showed how you can find the perfect present for different characters in your life.
It ended with the message: “If you know the person, you’ll find the present.”
2009 – Sweet Child O’ Mine
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This was the first year that John Lewis used an acoustic cover of a popular song from the charts.
Taken By Trees covered Guns N Roses‘s Sweet Child Of Mine as the song for the advert – and it peaked at No23.
It’s a sweet advert which shows children opening adult presents such as an e-reader and large slippers, and says at the end: “Remember how Christmas used to feel? Give someone that feeling.”
2010 – A Tribute To Givers
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Ellie Goulding recorded a cover version of Elton John‘s Your Song for this advert – the same tune that appeared in the 2018 film.
The advert is about the lengths that people go to to surprise their friends and relatives on Christmas Day.
It ends with the words “For those who care about showing they care”.
2011 – The Long Wait
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This was the first year John Lewis used its advert to tell a whole story, and it made the nation weep.
It told the story of a little boy impatiently waiting for Christmas and all because he wants to give a heartfelt gift to his two sleepy parents on Christmas morning.
It was set to Slow Moving Millie’s cover of Please, Please, Please Let Me Get What I Want by The Smiths. The tagline was “For gifts you can’t wait to give”.
This was the film that cemented the department store’s reputation as the best Christmas advertiser so we think that has to put it at the top of the list.
2012 – The Journey
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John Lewis’s tale of a snowman who travels over mountains and through horrible weather to bring his snow-girlfriend a scarf to keep her warm was very touching.
It was set to a Gabrielle Aplin cover of The Power of Love by Frankie Goes To Hollywood and had many people shedding tears at the time.
It was the first John Lewis ad track that reached No1 in the singles chart after Ellie Goulding’s Your Song peaked at No2 in 2010.
It finished with the line “Get a little more love this Christmas”.
2013 – The Bear And The Hare
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This charming animated tale tells the story of a bear who has never seen Christmas so his animal friends buy him an alarm clock so he can wake up from hibernation just for the day.
Lily Allen sang a cover of Keane’s Somewhere Only We Know – and it became her third No1 UK single. It’s closing line is “Give someone a Christmas they’ll never forget”.
People went wild for the story at the time and a lot of people on Twitter, now called X, call it the best John Lewis ad the department store has ever made.
2014 – Monty The Penguin
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This was the heartwrenching advert about a little boy and his friend Monty The Penguin who wants to find love at Christmas.
He’s revealed to be the boy’s stuffed toy – and under the Christmas tree is a girl penguin toy for Monty to fall in love with.
It featured the tagline “Give someone the Christmas they’ve been dreaming of” and was accompanied by Tom Odell singing John Lennon‘s Real Love.
If people don’t say The Bear And The Hare is their favourite, they often choose 2014’s advert as the John Lewis ad they like the best.
2015 – Man on the Moon
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This advert with the line “Show someone they’re loved this Christmas” really tugged on people’s heartstrings.
It told the story of a little girl who spots a lonely old man living on the moon through her telescope.
She finds a way to float presents over to him on balloons so he can enjoy Christmas Day too as Aurora’s cover of Oasis‘ Half The World Away plays in the background.
It’s one of John Lewis’s most sentimental and emotional Christmas adverts and definitely had people crying across the nation.
2016 – Buster the Boxer
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John Lewis decided to mix it up with Buster The Boxer in 2016 by having a funny advert rather than a gut-wrenching sentimental one.
It told the tale of a dog who was desperate to bounce on his family’s trampoline.
He had to watch foxes, a badger and a hedgehog have fun while his family were asleep.
Then as the little girl runs towards her gift on Christmas Day, Buster gets to it first and starts bouncing. The funny ad ended with “Gifts that everyone will love” and Vaults provided the backing track with a cover of Randy Crawford’s One Day I’ll Fly Away.
Fans loved it, but some people were left a bit disappointed as they didn’t feel like it packed as much of an emotional punch as in previous years.
2017 -Moz the Monster
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The 2017 advert was about a cuddly blue monster called Moz who befriended a little boy called Joe.
They stayed up together all night every night until Moz realises Joe needs to sleep at night so leaves him a present of a night light under the Christmas tree.
People weren’t as fond of Moz as they were of Buster or Monty, but they still found the advert cute.
It featured the tagline “For gifts that brighten their world” and The Beatles‘ song Golden Slumbers performed by Elbow, which reached No29 in the charts.
2018 – The Boy And The Piano
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In the 2018 John Lewis ad Elton John starred in its most showbiz-inspired advert yet.
Viewers were taken through key moments in his life, including stadium tours, travelling on a private jet, playing at his local pub and performing at a school.
But it had a mixed reaction on social media, with not everyone loving the festive ad.
It spanned the veteran singer’s life and showed how a gift of a piano from his grandmother helped make him the international superstar he is today.
And for once it didn’t feature a cover-version of a song, but Elton himself singing his hit Your Song.
The tagline was “Some gifts are more than just a gift”.
2019 – Excitable Edgar
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The 2019 advert is a heart-warming tale of a dragon called Excitable Edgar set in a far-away mythical land.
The ad – the first joint-effort with John Lewis’ sister retailer Waitrose – follows young girl Ava and her friendship with a cute young dragon as his accidental fire-breathing nearly ruins Christmas.
Edgar loves Christmas but every time he gets excited he uncontrollably breathes fire into the medieval-style village causing comical catastrophes.
The two and a half minute John Lewis Christmas advert follows the pair as they join in with seasonal activities.
It’s backing track is a cover by Bastille’s Dan Smith of 80s classic Can’t Fight This Feeling by REO Speedwagon.
The ad, known as Excitable Edgar, ends with the strapline “Show them how much you care”.
2020 – Give A Little Love
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In a nod to the Covid pandemic which ground the country to a standstill, John Lewis’ 2020 Christmas advert was inspired by random acts of kindness during lockdown.
It features different acts of kindness through nine different live action and animation scenes.
Heart-warming shots include a little girl helping a boy get his football down from the tree using a heart umbrella, a group of pigeons taking a sad hedgehog on a ride in a plane, and a young couple delivering a bag of shopping to two pensioners.
The ad was put together mostly via Zoom because of the Covid lockdowns, and features an original song by British soul singer Celeste.
Eight artists helped create the different scenes, including Chris Hopewell, who has created music videos for Radiohead and Franz Ferdinand, and French animator Sylvian Chomet.
2021 – The Unexpected Guest
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In its 2021 Christmas ad called The Unexpected Guest, a teenage boy called Nathan meets an alien named Skye who has crash landed on earth.
Through friendship Nathan shows Skye a series of festive family traditions.
They decorate a tree, eat mince pies, throw snowballs, and watch a Christmas movie.
But the advert has a bittersweet ending, as Skye has fixed her ship and must return home.
In a tear-jerking moment, Nathan gifts Skye his Christmas jumper – the same one he was wearing the day they met.
The soundtrack is performed by Lola Young, a 20-year-old singer-songwriter from South London, with a version of “Together in Electric Dreams”.
2022 – The Beginner
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The John Lewis 2022 advert was released on November 10.
The retailer wanted to use its ad, named The Beginner, to help raise awareness of some of the most vulnerable children in the country.
It follows a middle-aged man as he struggles to master the skill of skateboarding.
He has a few mishaps and tumbles off the skateboard a number of times.
His wife looks bemused at his efforts and concerned when he struggles to put the star on the top of the Christmas tree due to his aching muscles – but he perseveres with the slightly odd hobby.
You’re left wondering why he’s so determined to learn to skate until the final scene, where there’s a knock at their front door.
We see a social worker standing with Ellie, a young teenager, who is waiting anxiously to enter her new foster home, with a skateboard in her hand.
The importance of the skateboard suddenly becomes clear as the man says he likes to skate too.
You realise that he has been looking for a way to find common ground with Ellie.
It ends by saying: “Over 108,000 children in the UK are in the care system.
“We’re making a long-term commitment to support the futures of young people from care.”
It is the heartfelt story of one man’s determination to connect with a child, showing the power that kindness can make to someone else’s life.
The accompanying soundtrack is a cover of Blink 182’s All The Small Things sung by little-known US artist Mike Geier.
2023 – Traditions Grow
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Last year’s John Lewis ad was about a little boy’s quest for the perfect Christmas tree, befriending a playful character along the way.
The advert starts as eight-year-old Alfie picks up a seed to grow a “Christmas tree” at a flea market with his grandma.
As he nurtures the little seed at home, it quickly grows into an energetic and mischievous Venus flytrap named Snapper.
The fast-growing wannabe Christmas tree becomes a life force with its playful personality and gets in on all the festivities, but it eventually comes to an abrupt halt.
When Snapper grows so big that he tears Christmas decorations at the house, he’s cast outside in the cold by the family.
The tearjerking moment leaves Alfie heartbroken, who’s set on not freezing him out.
The advert ends as Snapper is embraced back into family life when Alfie and the family join him in the garden to give Christmas gifts.
The playful plant gobbles up all the wrapped Christmas gifts only to keep the wrapping paper and give back the prezzies to the family.
The music is provided by famous opera artist Andrea Bocelli who performs a song called “Festa”, which means celebration.
MORE than 100 Post Office branches and some 1,000 jobs are at risk under a sweeping overhaul.
The Post Office revealed it is looking to offload 115 directly owned branches within its 11,500 network, which could see them transferred to retail partners or postmasters or potentially closed.
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Around 1,000 workers are employed across the branches, while the Post Office also confirmed that hundreds of further roles are under threat at its headquarters as it looks to streamline back-office operations.
The announcement was made by Post Office chairman Nigel Railton during a meeting at 9am.
The move is part of the Post Office’s strategy to transition to a fully franchised model.
Franchising is a business model where a company (the franchisor) grants permission to an individual or group (the franchisee) to operate a business using its brand, products, and processes in exchange for a fee.
Approximately 99% of Post Office branches are now operated by franchisees, with only 1% of sites being directly managed.
The Post Office has stated that it does not plan to reduce its approximately 8,500 branches, which independent postmasters and local businesses operate.
Additionally, there are 2,000 Post Offices managed by retailers, such as WHSmith and the Co-op, which will remain unaffected.
FULL LIST OF POST OFFICE BRANCHES AT RISK
THE full list of branches at risk of closure include:
Martin Quinn from Campaign for Cash said: “This is another nail in the coffin for communities who rely on the Post Office network for access to cash services.
“The government must immediately demand that this closure programme be stopped and treat the Post Office network as national infrastructure.”
The Post Office has also called for handing ownership of the network to thousands of subpostmasters nationwide.
Mr Railton said: “The Post Office has a 360-year history of public service, and today, we want to secure that service for the future.”
He added the overhaul also “begins a new phase of partnership during which we will strengthen the postmaster voice in the day-to-day running and operations of the business, so they are represented from the frontline to the boardroom”.
The number of Post Offices in operation across the UK has significantly declined since the 1960s, when there were approximately 25,000 branches.
This decline is partly due to more people receiving benefits and pensions directly into their bank accounts, reducing their need for the Post Office’s services.
Post Offices were once the sole providers of postage stamps, but now stamps can be purchased from supermarkets and petrol stations.
Over the past decade, the number of branches has stabilised at around 11,500.
Despite these changes, the 364-year-old institution remains wholly owned by the state and continues to be Britain’s largest retail network.
A spokesman for the Post Office said: “The plan intends to create a new operating model for the business that means ensuring the Post Office has the right organisational design.”
But the Communication Workers Union (CWU) union called on the Post Office to halt the plans and for the Government to intervene.
CWU general secretary Dave Ward said: “For the company to announce the closure of hundreds of Post Offices hot on the heels of the Horizon scandal is as tone deaf as it is immoral.
“CWU members are victims of the Horizon scandal – and for them to now fear for their jobs ahead of Christmas is yet another cruel attack.”
TROUBLED TIMES
It comes after it was revealed that government ministers are exploring plans to transfer ownership to employees, similar to the model used by the John Lewis Partnership.
It is based on the idea that its workers are each part-owners of the company and receive a share of annual profits.
Whitehall insiders admitted that the Post Office is in a lot of trouble and is only financially viable because of an annual subsidy it receives from the government.
Calls for a review of the company’s ownership model have grown amid rising public anger at the wrongful conviction of hundreds of sub-postmasters.
Highlighted by the ITV drama Mr Bates vs The Post Office, it has been labelled Britain’s biggest miscarriage of justice after they were accused of stealing cash from their branches.
Many had their lives destroyed, were imprisoned, and some even passed away or committed suicide before finally being exonerated.
Former sub-postmaster Sir Alan Bates, who tirelessly campaigned for justice, is still waiting to agree on a compensation settlement and has called on the government to consider suing former directors of the company.
Why are retailers closing stores?
RETAILERS have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.
The high street has seen a whole raft of closures over the past year, and more are coming.
The number of jobs lost in British retail dropped last year, but 120,000 people still lost their employment, figures have suggested.
Figures from the Centre for Retail Research revealed that 10,494 shops closed for the last time during 2023, and 119,405 jobs were lost in the sector.
It was fewer shops than had been lost for several years, and a reduction from 151,641 jobs lost in 2022.
The centre’s director, Professor Joshua Bamfield, said the improvement is “less bad” than good.
Although there were some big-name losses from the high street, including Wilko, many large companies had already gone bust before 2022, the centre said, such as Topshop owner Arcadia, Jessops and Debenhams.
“The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend,” Prof Bamfield said.
“Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult.”
Alongside Wilko, which employed around 12,000 people when it collapsed, 2023’s biggest failures included Paperchase, Cath Kidston, Planet Organic and Tile Giant.
The Centre for Retail Research said most stores were closed because companies were trying to reorganise and cut costs rather than the business failing.
However, experts have warned there will likely be more failures this year as consumers keep their belts tight and borrowing costs soar for businesses.
The Body Shop and Ted Baker are the biggest names to have already collapsed into administration this year.
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Nationwide, Santander and HSBC HIKE mortgage rates despite Bank of England cut – see the full list
MORTGAGE borrowers are being hammered with higher costs as major lenders hike rates and pull top deals despite a recent cut to the Bank of England base rate.
In a blow to buyers, HSBC, Barclays, Santander and Nationwide are among the big lenders that have upped prices this week.
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Over the past month around 200 deals have disappeared from the market, in the biggest month-on-month reduction since July 2023, according to analysis from data site moneyfactscompare.co.uk.
In a blizzard of price increases this week, Nationwide has pushed up rates putting an end to its sub 4% products.
HSBC has now hiked rates twice within as many weeks.
At the same time, Santander has also raised for new and existing customers by up to 0.31%.
It comes after the Bank of England last week cut the base rate from 5% to 4.75%.
A reduction in central interest rates usually marks a fall in borrowing costs.
Yet, in an unexpected and unwelcome twist, mortgage borrowers are now seeing costs rise.
The average two-year fixed mortgage rate today is 5.44%, pushed up from 5.39% shortly before the Bank of England base rate reduction, according to data from moneyfactscompare.co.uk.
At the same time, the average five-year fix now sits at 5.17%, up from 5.09%.
Experts said the lenders are pulling back from the market to avoid being overwhelmed by demand in the wake of the cut.
Nicholas Mendes, technical director at broker John Charcol, said: “While many lenders have opted to maintain their existing rates to preserve business volumes and service standards, those offering competitive pricing have been forced to adjust likely due to applications levels.
“These influxes often stretch service levels, prompting rapid rate changes to manage demand effectively.”
Market rates typically used by lenders to price mortgages have also been increasing.
John Fraser-Tucker, head of mortgages at online broker Mojo Mortgages, said: “While the Bank of England’s decision to lower the Bank Rate last week might lead some to expect across-the-board reductions in mortgage rates, it’s important to understand that the mortgage market doesn’t always move in perfect sync with the Bank of England’s base rate decision.
“Fixed-rate mortgages, in particular, are influenced by a complex array of factors beyond just the Bank Rate. These can include the lender’s own funding costs, their view on future economic conditions, competitive positioning in the market, and even their internal goals for new business.”
Here is the full list of major lenders that have hiked rates this week…
BARCLAYS
From tomorrow (November 14) Barclays is increasing rates across purchase, remortgage and reward ranges.
Among other increases, the change will see a two-year 5.15% fee-free fix at 90% loan to value, jump to 5.49%
HSBC
In the second increase to rates in two weeks, HSBC has today raised the cost on selected two, three, five and 10-year deals.
The rise hits first-time buyer, home mover and existing customers switching deals.
COVENTRY BUILDING SOCIETY
The lender is tomorrow (November 14) raising tracker mortgage rates for buy-to-let borrowers, as well as closing applications to new borrowers.
NATIONWIDE
This week’s increases from the lender means that most of its sub-4% rates will also go above 4%.
For example, its five-year fixed rate deal with a £999 fee has jumped from 3.94% to 4.14%.
SANTANDER
Santander has upped rates by 0.29% on residential fixed rates for purchase, remortgage, and green products.
The move is u-turn after reducing some rates earlier this month.
TSB
TSB is upping rates up to 0.3% on selected two- and five-year deals. This includes first-time buyer and homemover deals, as well as remortgage products.
Rates now start from 4.32% for new customers.
It comes after the lender also increased selected rates by 0.10% two weeks ago.
VIRGIN MONEY
The lender has raised selected two and five-year rates by up to 0.15% this week.
Products now start from 4.29%.
RATE CUT
One smaller lender that has bucked the trend and reduced rates is MPowered Mortgages.
All of its two and three-year fixed rate mortgages have fallen by as much 0.28% for new purchase and remortgage customers.
For new purchase customers, the lender’s two-year fixed rates now start at 4.21% for 60% LTV with a £999 fee and three-year fixed rates start at 4.19% at 60% LTV with a £999 fee.
Should borrowers fix now or wait?
The volatile market could be a worry for anyone looking to move home or fix their mortgage in the coming months.
Most mortgage offers have a shelf life of up to six months, meaning that if you apply for a deal now the lender will honour the rate even if you don’t need it until early next year.
This is a good way to lock in rates and avoid added costs if prices keep rising.
If rates happen to fall in the mean time, you can then apply for another deal further down the line.
Nicholas Mendes said: “For clients nearing the end of their fixed-rate terms, it’s essential not to delay in the hope that rates will revert to levels seen weeks ago.
“Securing a deal now provides certainty in an uncertain market. There is always the option to review and adjust if circumstances change but acting promptly minimises exposure to further rate increases.”
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
MILLIONS of consumers with a mental or physical disability feel excluded from products due to accessibility issues from food packaging to clothing design and store layouts.
A poll of 1,000 adults with invisible and visible disabilities revealed over two-thirds (68%) have felt ignored by retailers and manufacturers.
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And 55% believe mainstream brands simply aren’t interested in making products that cater to their individual needs.
With some of the top issues being food packaging, which is hard to open, clothes which have poor sizing or awkward fastenings and stores with high shelves and poor lighting.
As a result, 76% are loyal to companies who offer a good range of accessible option.
While 80% claim brands could be missing out on millions of pounds worth of sales by not considering disabled consumers.
The spending power of disabled people and their households, known as the purple pound, is estimated to be worth a staggering £274 billion a year.
It also emerged that while 32% don’t expect to see a change from those in the fashion or transport sectors anytime soon – technology has made pace.
With the top tech innovations for people with a disability named as virtual assistants, smart home devices and wearable devices for health monitoring.
Katharina Mayer, head of LifeStyle Lab Europe at Samsung, which commissioned the research, said: “This research has highlighted the huge opportunity for brands to better understand the accessibility needs of consumers to provide greater access for people with disabilities in the UK.
“Companies are rarely able to test their ideas with diverse people with different needs, but this is a must”.
It also emerged 72% of those surveyed have had to abandon a purchase due to a product’s lack of accessibility.
But 56% would be willing to pay more for a product or service that fully met their accessibility needs.
When it comes to online shopping, 80% struggle with websites that are not optimised for accessibility.
While 30% battle through a poorly designed checkout process, and 22% bemoan a lack of text descriptions for images.
Samsung’s spokesperson added: “It’s time to re-write this narrative.
“When designers consider varied needs from the beginning, they don’t just serve people with disabilities – they create solutions that benefit everyone and that is the approach we take to inclusive design at Samsung.”
Full list of benefits you can claim if you’re disabled
- Statutory Sick Pay
- Disability Living Allowance
- Personal Independence Payment
- Disability Premiums
- Access to work grant
- Industrial Injuries Disablement Benefit
- Universal Credit
- New-style Employment and Support Allowance
- Council tax Support
- Attendance Allowance
- Disabled Facilities Grant
- Exemption from vehicle tax
- Disabled persons railcard
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
What was the 2020 John Lewis Christmas advert?
At the peak of the pandemic John Lewis encouraged Brits to do something nice for each other in its Christmas advert.
In total there were nine acts of kindness featured, helping to form a chain of joy and happiness.
The two minute advert featured different forms of moving art – from animation and claymation to CGI and cinematography.
Eight artists helped make the different scenes, including Chris Hopewell, who created music videos for Radiohead.
John Lewis said it wanted to support the creative industry, which was one of the hardest hit during the pandemic.
What happens in the Lidl Christmas advert?
THE Lidl Christmas advert tells a heartwarming tale of a little girl who, after helping an elderly woman, makes a wish to share her Lidl woolly hat with a boy she noticed earlier, who looked cold.
This touching gesture embodies Lidl’s message of sharing the magic this Christmas.
It also highlights the return of Lidl Toy Banks, with the aim of collecting and distributing more than 100,000 toys donated by customers to needy children.
Freemans Christmas advert
The Freemans Christmas advert features a catchy tune that will have you singing away after the adverts have finished.
Sophie Ellis Bextor’s catchy song, Freedom Of The Night, is the highlight – with the singer herself making an appearance as part of the Style Squad.
Sophie rocks up on doorsteps delivering Christmas presents for the exclusively online brand.
It’s a simple ad which will appeal to grown-ups.
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