BRITAIN’S top banks added over £5billion in market value yesterday after it was revealed the car finance compensation scheme will be cheaper than expected.
Watchdog the Financial Conduct Authority said on Tuesday that the redress costs would total £8.2billion — far below an initial £9-18billion forecast.
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Close Brothers saw its shares surge by as much as 10.3 per cent.
Lloyds Banking Group, the UK’s largest car finance lender, gained over £1billion in market value during early trading.
Barclays shares also rose 1.13 per cent, out- pacing the FTSE 100, which climbed 0.69 per cent.
Around 14million unfair car finance deals could qualify for compensation, with drivers receiving an average of £700.
Over 17 years, dealers often failed to disclose commissions and charged illegally high interest rates.
The FCA expects 85 per cent of eligible consumers to participate, and costs could rise to £9.7billion if all are compensated.
Worried banks had set aside billions for claims, including £290million at Santander, £1.15billion at Lloyds, £95million at Barclays, and £165million at Close Brothers.
Analysts say Lloyds may face further costs of up to £1.5billion.
The FCA’s consultation on the scheme ends on November 18, with payouts expected to begin next year.
WAGE MISERY
THREE in five low-paid workers are skipping meals, struggling to heat their homes, or getting pay-day loans to cover essentials, the Living Wage Foundation says.
Its survey of 2,000 workers found more than two in five have relied on food banks.
Many workers earning below the real living wage — £12.60 an hour outside London and £13.85 in the capital — are left with less than £10 a week after covering basic costs.
TURKEY WARS
ALDI has promised to be the cheapest for turkey, gammon, and other Christmas dinner centrepieces this year.
The firm will price-match rivals like Tesco and Sainsbury’s, and check daily.
Salmon, beef and pork are also included, with prices to be revealed.
The scheme runs from December 19 to 23, allowing shoppers to claim price matches with proof of cheaper alternatives.