Is Britain ready for a rate rise? TSB research finds many British homeowners are unprepared.
- Nearly three quarters (72%) of homeowners are likely to see their mortgage payments increase if base rate changes.
- One in five (20%) have "no idea" how a rate rise will affect them.
- More than half (56%) of mortgage holders already struggle financially with bills.
- A quarter (26%) would have real difficulty if their monthly mortgage repayment increased by £99.
The Bank of England base rate hasn't budged from 0.5 per cent for almost seven years, and during that time, more than two million Brits have become new homeowners.
Tomorrow, the Bank of England's Monetary Policy Committee will meet for the final time this year to decide if the base rate should increase, but are UK homeowners prepared for an increase next month, or even next year?
Bearing this in mind, TSB has spoken to thousands of homeowners across the country to fully understand how prepared Britain is for a rate rise and what can be done to support them. Today, TSB has released a report which reveals the nation's concerns about the impact a rate rise will have on their mortgage payments.
'Getting Britain #ReadyForRateRise'
, has found that nearly three quarters (72%) of homeowners are likely to see their mortgage payments increase if the base rate rises, with one in five (20%) having "no idea" how even a small change could have an impact on their monthly mortgage repayments. That's worrying news for more than half of the home-owning population (56%) who say they are already struggling with household bills.
Ian Ramsden, Director of Mortgages at TSB, says: "The statistics included in TSB's report are fairly shocking and clearly there's a lot of work to be done to help Britain's homeowners understand how they can accommodate a rate rise. But there is no need to panic; a little bit of planning now can make a big difference in the future.
"Our report includes practical hints and tips to help people get to grips with the potential base rate changes that could occur over the next few months.
"We don't know when the Bank of England will change the base rate, but we do know preparing early and helping homeowners understand their options is the first step in helping Britain get #ReadyForRateRise."
TSB recommends homeowners speak to their lender early, draw up a monthly budget and get any existing debt under control. Today's report also features a handy top 10 tips on how to be #ReadyForRateRise with practical steps to help homeowners take control today. People can also search the hashtag #ReadyForRateRise for more support over the next few weeks and months.
TSB's research also looked at how people would react to a base rate increase and found that many would need to make some big changes to meet any increased monthly mortgage repayments:
- 74 per cent would budget and make spending cutbacks.
- 43 per cent would try to switch to a cheaper loan / mortgage.
- 33 per cent would prioritise debt repayments and pay the most important ones first.
- 14 per cent would seek help from debt advice organisations.
- 12 per cent would try to borrow from friends or relatives.
- 9 per cent would check their social security entitlements.
Reducing their supermarket shopping bill is top of the list for almost seven out of 10 (69%) people closely followed by eating out less (62%), limiting non-essential spending (62%) and taking cheaper holidays or not going away at all (61%). Three in 10 (30%) would work overtime or take on an additional job, closely followed by just over a quarter (28%) who would turn the heating down to save on energy bills.
Follow us on Twitter:
Notes to editors
The data included within the report is gathered from an online survey conducted from 15-25 September 2015 of 2,000 UK adults who have a mortgage. The research was commissioned by TSB and data gathered by Onepoll. The full report can be read at:
TSB was created to bring more competition to British banking - to be a real challenger to the big banks and to deliver the kind of banking the people of Britain want. TSB only serves local customers and local businesses, to help fuel local economies, because communities thriving across Britain is a good thing for all of us.
We have a simple, straightforward and transparent banking model and make clear on our website how we operate and make money. We offer the products and services people tell us they want, with none of the funny stuff people normally associate with traditional banks.
Our 4.7 million customers, award winning mobile and digital banking, nationwide network of branches and 8,600 Partners mean we are big enough to make a difference, but small enough to be an agile challenger to the entire market.
For further information about TSB Bank plc, please visit our website