Experian has today announced a new partnership with The Access Group that will allow even more UK employees to digitally share their payroll information to get better access to financial products and services.

Through Experian’s Work Report™, the UK’s first digital employment and income verification service, employees who are paid using Access Group’s payroll software will now have the option to consent to share their payroll information with another organisation digitally.

This provides an instant and secure alternative for employment and income verification when applying for a range of financial services, including mortgages.

Applicants are given the option to upload evidence manually via a lender’s existing systems or to use Experian’s Work Report™. If they do, the service automatically accesses – with an employee’s consent – the required records from their employer and passes them to the service provider.

By allowing connectivity to an employer’s payroll data, it can provide direct confirmation of a consumer’s gross and net income, as well as employment status and tenure, in a matter of seconds.

Experian’s employment and income verification services now cover 77% of UK employees.

Paul Speirs, Managing Director of Digital Consumer Information at Experian, said: “Accessing financial products and services is stressful enough without the added pressure of gathering crucial documentation to help confirm payroll information. It’s a hassle for the financial provider, the employer and, most importantly, the applicant.

“Experian’s Work Report™ helps to ease this pain by providing a seamless, digital alternative to traditionally cumbersome processes, helping enable a quicker, more efficient turnaround and improved customer outcomes. We are delighted to be working alongside The Access Group to help take this process one step further into the digital age.”

Charles Butterworth, Managing Director, Access People, commented: “Supporting customers with digital transformation is at the heart of our software solutions at Access.  Paying people right ‘first time, every time’ is the standard by which payroll teams are now held to, but it is no longer the only benchmark. With Millennials and Gen Z making up a significant percentage of the workforce, people have come to expect a consumer-grade experience from their work tech, including solutions that facilitate pay. Unlocking digital-first experiences that meet these changing employee expectations is, therefore, increasingly important to our customers and their people.

“By partnering with Experian, we’re able to provide our customers with even greater digitisation of their payroll processes while their employees keep control of their data and personal finances. Experian’s Work Report™ service will enable customers to facilitate a frictionless way for their people to apply for lending, whether that be car finance, a mortgage, or another loan. The solution is an example of intuitive development of HR and pay solutions that add further value for our customers in supporting the wider employee experience.”

Evolution Money, the second-charge lending specialist, has today revealed the latest results from its quarterly data tracker, which reviews borrower types, average mortgage sizes, LTV, and further information to offer advisers insight into the reasons why a second-charge mortgage might be suitable.

Evolution Money analyses data from two different types of second-charge mortgage products, split between those borrowers using the loans for debt consolidation purposes only, and those clients who have prime credit ratings.

This iteration of the tracker shows a slight reversal in previous iterations with both the volume and value of second-charge mortgages increasing for borrowers taking out these products purely for debt consolidation purposes, compared to prime borrowers who are able to use their loans for other purposes, not just debt consolidation.

Total Lending	Debt consolidation borrowers	Prime borrowers
September 2022 – November 2022	68% by volume/ 59% by value	32% by volume/ 41% by value
December 2022 – February 2023	70% by volume/ 61% by value	30% by volume/ 39% by value

Looking at its total lending data for the last three months, up until the end of February 2023, the product split by volume of mortgages is 70% debt consolidation/30% prime, and by value 61% debt consolidation/39% prime.

Evolution Money said this move towards a greater level of activity amongst debt consolidation borrowers was understandable given the increased cost of living pressures but also the need for many borrowers to pay off costlier debts which might have been subject to increased interest rates in recent months.

The lender also said homeowners were increasingly likely to look at second-charge mortgage options, especially if they did not want to disturb their existing first-charge mortgage. Remortgaging right now away from a first-charge was likely to result in far higher monthly payments given the rise in rates over the last six months.

Evolution said existing homeowners were therefore likely to continue to look for short-term alternatives such as second-charge mortgages in order to pay off non-secured debts running at far higher interest rate levels.

	Debt consolidation borrowers	Prime borrowers
Average loan amount	£24,183 (£25,178)	£36,521 (£37,170)
Average term – months	138 (135)	164 (158)
Average LTV	70% (69%)	66% (68%)
Average no. of debts consolidated	6 (6)	5 (5)
Average value of debts consolidated	£17,403 (£18,322)	£23,344 (£24,422)

*Previous figures for September 2022 – November 2022 in brackets.

This iteration of the Tracker bucks the recent trend whereby, for those borrowers specifically using a second-charge mortgage for debt consolidation purposes, the average loan amount had continued to increase, and was over £25,000.

Over this three-month period however the average debt consolidation loan amount has fallen by close to £1,000, while the average term has increased to 138 months and the average LTV has increased to 70%. Borrowers continued to consolidate more debts than their prime borrower counterparts, however the average value of debts consolidated had fallen to £17,403 from £18,322.

Evolution said these drops might reflect a borrower demographic focusing on the debt they wanted to pay off specifically, not taking out loans beyond this amount, while also giving themselves a little extra time in order to pay off their second-charge.

Evolution data also shows the most common uses of a debt consolidation second-charge mortgage. 55% were using the money to pay back a loan provider, followed by over 34% paying a bank – an increase since the last iteration – while 5% were paying off retail credit.

For prime borrowers, the average loan has also fallen to just over £36.5k from over £37k, with the average term also increasing to 164 months, with the average LTV dropping to 66%.

Prime borrowers continue to take out second-charge mortgages for debt consolidation (holding at 68% again this quarter), home improvement (11%) and home improvement with some consolidation (up to 16%).

Steve Brilus, CEO of Evolution Money, commented: “Once again, it’s possible to extrapolate what is happening in the wider economy from our Second-Charge Mortgage Tracker, particularly when it comes to why homeowners are opting for a second-charge mortgage rather than a straight remortgage, and also why we have seen a noticeable uptick in debt consolidation loans, and prime borrowers continuing to use their loans for the same purpose.

“Last year the Tracker reflected an increase in the number of prime borrowers using second-charge mortgages, and while this remains steady, it’s also obvious that we are beginning to see a move back towards debt consolidation right across the piece.

“This is likely to have a lot to do with the direction of travel for interest rates. As they have risen, other forms of debt have become costlier to service, plus of course the attractiveness of remortgaging a first-charge mortgage in order to release equity to potentially pay off these debts becomes less so, given the likelihood borrowers would be moving to a much higher rate.

“For those that can, it therefore makes sense to maintain the existing first-charge and to look at second-charge options in order to pay off those costlier debts.

“It’s also noticeable that we have seen a slight move downwards in terms of average loan amounts and again this might reflect the focus on just opting for a loan amount based on what is required to pay off the debt, rather than potentially taking a large loan, and for prime borrowers at least, using this ‘extra’ money for different purposes not just debt payments.

“Certainly, it has been a busy start to the year and we fully anticipate that seconds will continue to be in demand over the course of 2023 and beyond. Rates look unlikely to come down significantly in the short-term and there is a real possibility they will go up further.

“In that scenario, paying off debts – which are likely to be costing even more – with a second-charge mortgage becomes an even more attractive option and it is certainly a product that advisers should have in their advice kit bag.”

One of the UK’s largest trade credit insurers, Atradius, has reported a 79% increase in claims for late and failed payments in the food sector amid national supply shortages of products like eggs and some vegetables. It’s data shows the agriculture sector also saw claims more than double (119% increase) last year.

Atradius provides trade credit insurance, which helps to protect suppliers against the risk of a retailer becoming insolvent between when they place an order and make payment. Without insurance, suppliers tend to seek more specific payment terms, putting pressure on a retailer’s cash flow.

A rise in claims received in the sector indicates the number of retailers failing to pay their suppliers has risen exponentially over the last 12 months, as firms struggle to return to business as usual.

Georgios Panzaris, Senior Underwriter at Atradius, says: “It’s been a challenging few years for the food industry in the UK, and ongoing supply issues look set to continue as the sector battles with the quadruple threat of rising prices, ongoing fallout from Brexit and the pandemic, and bad weather conditions.

“The empty shelves shoppers are seeing have different root causes. Egg shortages are largely down to farmers being hit by the rising costs of feed, energy and labour, not to mention the largest Avian Flu outbreak we’ve ever seen, with undersupply at risk of persisting for months. Meanwhile vegetable producers are facing similar challenges alongside unfavourable weather conditions, with lower crop yields affecting supply. Put simply, farmers are facing a raft of challenges in an already volatile environment.

“Our data on late and failed payments paints a bleak picture, with the number of claims we received in the sector for late and failed payments up by 79% in the food sector, and a huge 119% in the agriculture sector last year. This follows a relatively subdued period in 2021 where businesses could benefit from ongoing government support put in place during the pandemic. But with no such support in place this year, firms will be bracing themselves for the coming months.

“Companies that have traditionally operated on thin margins will be particularly vulnerable to volatile market conditions, but even the biggest players are being tested. With insolvency a real risk, businesses need to do all they can to ensure they are protecting cash flow so they can mitigate the risk of a large customer failing unexpectedly. We – at Atradius – continue to underwrite agri-food firms on a case-by-case basis, but it’s crucial businesses have robust and updated financial insight and forecasts. To guard against the domino effect that crumbling supply chains can have on firms, a trade credit insurance policy can play a very important role in maintaining a company’s confidence in its trade debtor book.”

Hodge has added interest only to its Professional Mortgage.

It offers those with complex incomes, professional traineeships or in self-employment, such as barristers, dentists, doctors, and more, even greater flexibility when it comes to buying a property.

Hodge will consider up to six times loan to income and up to 75% LTV on interest only, which is a welcome addition to the capital repayment already available on the product up to 90% LTV.

Emma Graham, business development director at Hodge, said: “We first launched the Hodge Professional Mortgage to offer professionals the benefits of a bespoke product hand-in-hand with a quick and smooth mortgage offering to support them through their property journey.

“Now we’ve added interest only to the range, so those who want a little more flexibility in their monthly outgoings can climb the career and property ladder at the same time.”

A team of dedicated underwriters experienced in handling complex incomes will continue to manage the product, which will consider multiple income streams including those from a ‘non-professional’ joint applicant, alongside retained profits and one-year accounts from self-employed applicants too.

Emma continued: “We are delighted to be launching this latest enhancement to deepen our commitment to supporting professionals who could otherwise find themselves excluded by high street lenders not willing to spend the time or expertise on properly assessing or managing the complex income streams associated with the kinds of jobs they do.

“Drawing on our extensive knowledge of specialist products and what Professionals want from a mortgage, the addition of Interest Only is another great example of the way in which Hodge continues listening and responding to the needs of the market.

“We’re really proud of the time and effort we’ve put into launching, and now further developing, our Professional Mortgage portfolio and are always keen to hear from brokers interested in working with us.”

The product offers lending up to a maximum age of 75. Interest only is also available up to 60% LTV for debt consolidation and overpayments of up to 10% per year are accepted penalty free.

‘In theory, today’s Budget argues for a bit more tightening by the Bank of England (BoE) at next week’s meeting. Further support for businesses and households around energy prices, more defence spending and tax breaks for business investment will boost demand this year. However, the Monetary Policy Committee (MPC) is unlikely to be too concerned about the inflationary impact of these commitments. Lower energy bills will help headline inflation fall and extra defence spending is unlikely to boost demand in the broader economy.

‘By far the biggest issue at next week’s MPC meeting will be inflation vs financial stability. We had already thought the chances of a rate hike next week were probably at 50%, but the flare up of risks around Credit Suisse today and associated moves in financial market makes that probability even smaller. It now looks like the MPC will press pause on meeting earlier than we previously expected.

‘In the medium term, the measures announced today should boost the supply side of the economy. Getting more inactive people back into work will be crucial to bringing down wage growth, and by association services inflation, and reducing the need for further rate hikes. And any boost to business investment should improve productivity and reduce inflationary pressures.

‘The risk is that with a razor thin margin against his headroom, any underperformance against the OBR forecasts means the chancellor will have to row back on some of these measures in the next Budget.’

Thomas Pugh, economist at RSM UK