20 financial facts that tell the story 2020
Craig Johnson uses 20 financial facts and figures to tell the story of 2020, a year quite unlike any other.
The Office for Budget Responsibility, the independent watchdog that keeps an eye on how much Chancellor Rishi Sunak is spending, has predicted that public sector borrowing could hit £372.2 billion in the current financial year as the UK government tackles the pandemic. So far, the Treasury has borrowed £208.5bn.
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More than 100 million meals were served during August under the UK government’s “Eat Out to Help Out” scheme, at a cost of £522 million to the taxpayer. A total of 130,000 claims were received from 84,700 restaurants, cafés and other businesses, with the Treasury estimating two million jobs were supported.
The limit for contactless payments was raised to £45 on 1 April to cut the length of time shoppers would need to spend at the till. When contactless was introduced in 2007, the limit stood at £10, before rising to £15 in 2010, £20 in 2012, and £30 in 2015.
Chancellor Rishi Sunak’s flagship furlough schemes – the coronavirus job retention scheme for employees, and the self-employed income support scheme – have so far cost taxpayers £47bn. The UK government has met the cost of these schemes by selling “gilts” or government bonds, which, in effect, are “I owe you” notes with added interest.
Research by credit card provider Visa found that 89 per cent of Britons shopped online during the initial national lockdown. The survey found 31 per cent of shoppers were buying items over the internet for the first time, with two-fifths shopping online more frequently and 74 per cent expecting to continue doing so.
Jim Harra, head of HM Revenue & Customs (HMRC), told MPs on the House of Commons’ Public Accounts Committee that up to £3.5bn may have been paid out in fraudulent or mistaken furlough claims. He said that HMRC was pursuing around 27,000 “high-risk” cases but won’t issue fines for mistaken claims.
Figures from trade body UK Finance showed that 992,000 credit card payment deferrals were agreed between the start of April and the end of June. Three-month credit card payment deferrals were introduced at the beginning of April to help households struggling to balance their finances during the pandemic.
Companies have voluntarily paid back £215m of furlough money to the Treasury. More than 80,000 businesses decided that they didn’t need the cash after all and handed it back to the public purse. Firms that repaid furlough money included furniture chain Ikea, housebuilder Taylor Wimpey, and fashion website Asos.
Online sales peaked at 31.8 per cent of total retail sales in June, before declining slightly in July and August, according to the latest data from the Office for National Statistics. They are still 53 per cent higher than a year ago, with internet food shopping up 91.5 per cent year-on-year.
A total of 1.33 million businesses have been supported by UK government-backed coronavirus lending schemes, according to Treasury figures. More than 1.26 million bounce back loans have been issued, along with 66,600 companies taking out £15.5bn through the coronavirus business interruption loan scheme, and a further £3.8bn going to 566 firms under the coronavirus large business interruption loan scheme.
Borrowing on credit cards dropped by 40 per cent year-on-year between April and June, according to statistics from trade body UK Finance, following a 12 per cent fall in the first three months of the year. While still at low levels, spending on credit cards increased by 45 per cent in June compared with April as lockdown measures eased.
Charity shops are expected to have benefited from a £543m bonanza as donors gave away some of their lockdown purchases, according to a survey by transaction processing firm Barclaycard Payments. On average, people planned to take items worth £65.90 each to charity shops this year after splurging during the earlier period of the pandemic.
Retired people have cut their spending by 5 per cent over the past year due to the coronavirus pandemic. A survey by consumer group Which? found that spending on leisure and recreation is down by 13 per cent for couples and 14 per cent for singles – but spending on groceries and utilities bills has remained constant.
Unable to go out to spend money in shops, bars and restaurants, many people used the lockdown to pay off parts of their overdraft, with current account borrowing dropping to £5.2bn in June, according to UK Finance, which represents banks and building societies. Overdraft borrowing has been falling steadily from a peak of around £10bn between 2005 and 2009.
Britons spent £40.6bn on disposable or non-essential items during the national lockdown, with takeaways, summer clothes, gardening items, and baking ingredients topping the shopping list, according to transaction processing company Barclaycard Payments. More unusual purchases unearthed by the research included an inflatable pub, a Tom Jones jigsaw puzzle, and a stuffed crocodile.
A survey by the Bank of England found that 57 per cent of households cut their spending during lockdown, with 24 per cent leaving their spending unchanged and 19 per cent increasing their spending. The result came despite 28 per centof households reporting a drop in their income, with 65 per cent seeing their income unchanged and 8 per cent reporting an increase.
The Department for Transport spent £3.5bn between March and September to subsidise train services during the pandemic, before scrapping the entire railway franchise system in September. Ministers could end up spending £12bn to keep trains moving, according to some estimates.
In June, 55.6 per cent of all payments made in the UK using debit and credit cards were contactless, according to banking body UK Finance, up 15.5 per cent month-on-month to £6.5bn. Contactless’ share of transactions had risen from 42 per cent in
June 2019 and is only just behind this March’s record figure of
56.6 per cent.
In September, the UK government unveiled a £119m aid package to tackle the combined threat of coronavirus and famines overseas. The Foreign Office said the cash would help alleviate extreme hunger for more than six million people in Yemen, the Democratic Republic of Congo, Somalia, the Central African Republic, South Sudan, and Sudan.
Britons spent £12.2bn on their credit cards during June, up by 22.9 per cent from May and driven by large one-off purchases, such as household goods, in response to increasing amounts of time being spent at home, trade body UK Finance reported. But the number of credit and debit card transactions dipped by 2.7 per cent month-on-month to 933 million, despite lockdown measures easing.
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