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Cost of living – latest: Wilko enters administration; rents head for ‘tipping point’ as more hikes forecast
Property experts are more certain of an upcoming rent hike than at any other point in the past 20 years. Meanwhile, about 12,000 jobs are at risk after home retailer Wilko collapsed into administration. Listen to a Sky News Daily podcast special on interest rates as you scroll.
Thursday 10 August 2023 17:30, UK
Cost Of Living
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Wilko has collapsed into administration View post
Rents headed for ‘affordability tipping point’ as more hikes forecast View post
More major lenders poised to reduce mortgage rates View post
Ozzy Osbourne gaming ad banned View post
Analysis: Could deflation in China bring UK prices down? View post
Heading school uniform shopping? Here are some deals to look out for View post
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Live reporting by Brad Young
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7 Aug
05:29
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18m ago
12:30
Fears young people are limiting their university choices because of cost pressures
One in five school leavers plans to live at home while studying at university, amid fears cost pressures are limiting young people’s educational choices.
Students from disadvantaged backgrounds are more likely to plan to study locally than their peers – and “cost concerns” may be a driver of the decision for a number of young people, a report has found.
Among those who plan to live at home, only 19% said the main reason was because their preferred university was near their home, according to the study by the UCL Centre for Education Policy and Equalising Opportunities, the UCL Centre for Longitudinal Studies, and the Sutton Trust.
Nearly a fifth (18%) said the main reason was because they could not afford to live away from home, while 46% said they wanted to be near their families.
The study suggests that young people who plan to live at home are disproportionately more likely to be those from families facing financial challenges amid the rising cost of living.
And those from working-class families were less likely to have applied, or were planning to apply, to university compared to those with parents in managerial or professional occupations (57% v 77%).
Researchers have called on the Government to reintroduce maintenance grants for disadvantaged young people who want to study at university.
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1h ago
11:30
Online bookshop launched to fight back against Amazon raises £3m for independent sellers
An online bookshop has reached its target of raising £3m for independent booksellers, in a bid to fight online giants, including Amazon.
Bookshop.org bills itself as an “ethical book-buying alternative” to Amazon, with a mission to financially support local and independent bookshops, and is now setting a new goal: to increase online sales for sellers five times by 2028.
Around 60% of books are bought online, according to Nicole Vanderbilt, the managing director of Bookshop.org UK.
She has urged publishers, authors, bookshops and readers to “embrace” its mission to allow independent bookshops to thrive in an age of e-commerce.
She said: “We believe the online book market has many more opportunities to offer to independent booksellers – in a way, we’ve only helped them scratch the surface so far.”
Martin Higgins, UK retail director at Penguin Random House, said: “The development of Bookshop.org over the past two and half years in the UK has been remarkable.
“They have complemented and amplified the growing UK independent bookshop market with an original business model, and have succeeded in ensuring many high street booksellers establish a strong online trading presence.”
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2h ago
10:30
Are period pants cheaper than disposable alternatives?
By Megan Baynes, cost of living specialist
Period pants are often touted as a cheaper alternative to their disposable counterparts – but is this actually the case?
Well, a lot of it depends on how long your period lasts, how frequently you have one and which period products you use.
When it comes to period pants, buying in bulk is often the cheapest way to do it. M&S, who are part of a campaign to remove the VAT from the pants, currently sell a five-pack for £35, which means a single pair of pants sets you back £7.
These are at the lower end of the scale too – a five-pack from ModiBodi, who was one of the first companies to sell period pants, will cost you upwards of £56.
For an average period, you would probably expect to use two to three pairs in a 24-hour period (depending on the absorbency – Wuka’s medium absorbency pants are said to hold up to three tampons worth).
This means to get through an average seven-day period (and worth noting that no woman experiences an “average period”) and without wanting to be doing excessive amounts of washing, you would probably want around to buy two multipacks (so ten pairs of pants) with an initial outlay of £70.
A survey done before the pandemic – and crucially before inflation hit record highs – found women spend at least £10 a month on disposable products. That figure is likely to be significantly higher now and means women are spending more than £120 a year on period products.
And yes, some people on Twitter may point out you can get a box of basic tampons or pads for a pound from a lot of discount retailers. But anyone who has used the cheaper products knows that you get what you pay for, and there is a level of discomfort (and leaking) that comes with the basics range.
So this means, if you can afford the initial outlay, period products could be a cheaper and easier alternative to disposable products – and that is without taking into account the environmental benefits, with less plastic being sent to landfill.
This picture is from 2020, so prices may not reflect what is currently available
This picture is from 2020, so prices may not reflect what is currently available
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3h ago
09:45
Government urged to remove VAT from period pants
More than 50 MPs, retailers and charities have written to the government, urging it to remove the 20% VAT on period pants – reusable underwear designed as an alternative to tampons and sanitary towels.
Other period products, including pads, tamps and menstrual cups, are exempt from VAT but consumers still pay a 20% tax on period pants as they are classified as garments.
The chancellor has now been asked to reclassify the pants as period products in his autumn statement later this year.
M&S has launched the new Say Pants to the Tax campaign with the period underwear brand Wuka, promising to pass on 100% of any cost savings to shoppers if it is successful.
A five-pack bundle of period pants at M&S costs £35, but would be £28 without VAT, while a pack of three – currently £20 – would drop to £16.
M&S, which said it sells more than 6,000 packs of the pants each week, and Wuka calculated that their customers combined had paid more than £3m in VAT on period pants.
A survey of 268 women aged 18 to 54, conducted last month, found that 23% of respondents cited cost as a reason for not using period pants, with 83% in favour of dropping VAT from the products.
Period pants can be washed and worn again for months, which means they can save consumers money and help reduce plastic waste.
Wuka estimates that one pair of period pants can save 200 single-use plastic disposables from going to landfill.
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3h ago
09:00
The latest mortgage rates on the market
While mortgage rates have increased substantially in the last two years, there has been little movement today.
The latest data from Moneyfacts shows the average two-year fix remains unchanged at 6.84%.
The average two-year tracker mortgage also stayed the same, at 6.22%.
Five-year fixed mortgages are down 0.01% to 6.33% from yesterday.
The number of mortgage products is also at a standstill, declining by just one to 5,111.
Savings
When it comes to savings, the picture is fairly similar.
One-year cash ISA rates are stuck at 5.05%, as are easy access ISAs at 2.9%.
The average one-year fixed savings rate is down from 5.26% to 5.25%.
And the average easy access savings rate is up 0.01% to 2.88%.
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4h ago
08:29
Wilko continuing to trade ‘without immediate redundancies’ – for now
Wilko is continuing to trade from all stores, its administrators said after they were appointed today.
PwC said there will be no “immediate redundancies”.
Jane Steer, Zelf Hussain and Edward Williams from the corporate finance firm have been appointed to oversee the process.
Zelf Hussain said: “It is incredibly sad that a well-loved, family business that has been on the high street for over 90 years has had to go into administration today.”
PwC said the retailer has suffered “increasing cashflow pressure and a deterioration in trading” after sales were impacted by the pandemic and cost-of-living crisis.
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4h ago
08:15
Home repossessions expected to rise as mortgage payments up 20%
With a growing number of homeowners falling into arrears, repossessions are expected to rise, according to trade association UK Finance.
The average monthly mortgage payment has increased by £148 to £866 between December 2021 and July this year, the Office for National Statistics said today.
UK Finance said there were 81,900 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023 – 7% higher than in the previous quarter.
More than 28,000 of those homeowners had arrears in the most severe band – more than 10% of the mortgage balance.
But a UK Finance spokesperson said: “Although any rise in arrears can be worrying, overall numbers remain low with less than 1% of homeowners and less than half a per cent of landlords behind on their payments.”
They added: “The number of homeowner and buy-to-let repossessions in [the second quarter] remain close to historic lows but are expected to continue to rise in line with our mortgage market forecast given the ongoing cost-of-living challenges.”
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5h ago
07:44
Wilko collapse was ‘completely avoidable’, claims union
GMB union has accused Wilko of chasing “mythical” customers rather than taking advantage of an expanding discount market.
National secretary Andy Prendergast said he was “angry” those running the company did not invest further in online features while “taking out big dividends”.
Members of the union who work for Wilko have been left “devastated” and looking at a “very difficult future”, he told Sky News.
“We’re extremely disappointed. We really sympathise with all of our members who are facing losing their jobs and quite frankly, we’re angry about what was completely avoidable,” said Mr Prendergast.
He said Wilko was dominating an expanding market and should have been concentrating on the customers they had rather than “chasing mythical ones that didn’t exist”.
B&M and Poundland are flourishing because more people are turning to bargain retailers which “should have been a good opportunity for Wilko”, he said.
“This is a company who should not be in this position, and it’s completely mismanagement that’s left it where it is.”
This morning Wilko boss Mark Jackson said “no stone was left unturned” in their efforts to save the company and they had “fought hard” to keep the business intact.
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5h ago
07:23
Wilko beaten by fierce competition
Wilko appears to have been outcompeted by other budget stores, according to business correspondent Paul Kelso.
As a discount retailer, it was expected to do well during a cost of living crisis, but it has lost market share to “fierce competition” from B&M and Poundland, he said.
“If this is the end, that will leave a big hole in the high street,” said Kelso, pointing to the 400 stores across the country.
How those stores, and Wilko’s 12,000 employees, will fare is yet to be made clear, with administrators PwC unable to make a comment at this time.
“If not caught unawares, they certainly weren’t ready to communicate to the media and indeed those employees what the next step will be. One imagines they will try and pursue a sale.”
It is an open question whether that sale would mean any of those jobs could be saved, said Kelso.
“It appears Wilko is a victim of its own management decisions and competition, which in that retail space has been very fierce.”
