June 2022: IE Hub appoints a Chairman of the Board, BNPL, inflation and more

IE Hub announces new Chairman

Mark Thundercliffe joined IE Hub as Chairman of the Board. With over 34 years of experience in corporate, retail, and business banking, Thundercliffe has built and developed dynamic financial services companies, products, customer propositions, and distribution capabilities in both developed and emerging markets.

Thundercliffe said of his appointment, “I’m delighted to join the talented digital team at IE Hub. Using the power of technology and data to deliver positive societal impact through affordability assessment has never been more important. I recognise the important role money plays in helping people achieve their hopes and ambitions and am inspired by the team's commitment to delivering this.”

Cost of Living?

ONS has confirmed that UK inflation reached 9.1% in May 2022, from 9% in April. This is its fastest rate for 40 years and could go even higher.?

The Bank of England has warned that inflation will reach 11% before the end of 2022. The ONS has provided an?online calculator?to show exactly how inflation is affecting household costs.

Energy prices remain the biggest driver of rising inflationary pressures, with an expected 30% increase in October 2022. Considered together, the two energy caps could add more than two percentage points to inflation this year.?

Increased SFS spending guidelines

The SFS spending guidelines express the spending behaviour of low-income households. With the CPI increase to 9% being 5.5 percentual points (pp) higher than the projected forecasted inflation used in the SFS spending guidelines for 2022/23.

The guidelines were last updated in April 2022 and are typically updated every year. However, this is the first time since the creation of the SFS that there is more than a 5pp difference between actual inflation and the projected inflation used in the calculation of the spending guidelines. An automatic review of the figures was triggered due to the rise in inflation, resulting in many of the SFS guidelines changing.?

Although SFS guidelines are common practice in the creditor industry, it can often be challenging to update the SFS guidelines after every update. With an expected inflation rise in October 2022, it is important to be prepared for even further updates.

Here at?IE Hub, we allow customers to complete their I&E online, in their own time. We reduce operational costs on the collections team end, whilst also automatically updating our system with all SFS guideline updates. Therefore, by utilising IE Hub, creditors do not need to worry about updating their system to accommodate any SFS changes.

Buy Now Pay Later

On 20th June 2022, the UK government released its?official plans?for Buy-Now-Pay-Later companies. Updates included:?

• Mandatory affordability checks for all BNPL transactions
• Lenders are now required to ensure loans are affordable and rules will be amended to ensure advertisements are fair, clear, and not misleading
• Lenders offering the product will need to be approved by the FCA and borrowers will also be able to make a complaint to the Financial Ombudsman Service

Main reasons for people in debt crisis

On the 20th of June 2022, Christians Against Poverty launched their?#OnTheEdge report?at Westminster. After reading the report, IE Hub wanted to better understand the main reasons for people experiencing debt across the UK, and how IE Hub can support in these areas.

Mental ill-health (19%)

• IE Hub offers a holistic approach to affordability assessments by looking at the bigger picture of a consumer’s income and expenditure. They are also able to complete it in their own time without stressful phone calls, which reduces stress and anxiety.?

Low Income (17%)

• IE Hub is a proud partner of VRS, to ensure all customers have an opportunity to declare vulnerability. This means people who have found themselves in vulnerable circumstances are actively made aware of the ongoing free support they can access.

Problems with budgeting (9%)

• IE Hub’s affordability assessment tool is also a great budgeting tool for consumers. Users are provided with a summary of their income and expenditure, automatically updating when they make any changes. This takes the stress out of budgeting manually.

Upcoming in July

• The FCA has announced the new Consumer Duty policy statement, summarising responses and making any new rules by 31 July 2022. So, we can expect to see further guidance for credit firms on how they can better protect their consumers and enforce good practices across the credit sector.?
• The first instalment of the ￡650 cost of living payment will be sent out to most eligible bank accounts from 14 July 2022, continuing to the end of the month.

To find out more about how our products can benefit your customers,?click here.