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Thousands of fraud victims complained to the Financial Ombudsman last year

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Thousands of fraud victims still had to complain to the Financial Ombudsman Service last year to try and get their money back from banks, despite the introduction of a new anti-fraud code last May which said they ‘should’ be refunded.

The Ombudsman said it received nearly 11,000 complaints from people who fell victim to banking fraud and scams in 2019-20.

This is fractionally down on 2018-19, when it saw 12,195 complaints, but that was a 40 per cent rise on the year before and was a time when consumers were not subject to supposedly increased protections from scams.

The Financial Ombudsman Service received 10,923 complaints about bank fraud last year

Although some of the complaints would have been submitted before the new code came into force last May, the FOS said: ‘We recognise the difficulties of balancing security with maintaining convenience, but are continuing to see that some businesses aren’t going far enough to prevent fraud, or are relying too heavily on generic warnings about it.

‘We want to see businesses commit to ongoing learning and improvement for the future.’

According to its figures, 11,383 complaints were resolved in 2019-20, 58 per cent of which were upheld in favour of consumers, suggesting nearly three in five are wrongly being turned away for refunds. 

Customers have six months to complain to the Financial Ombudsman Service after it is dismissed by their bank or another financial firm.

That success rate is higher than the 41 per cent of fraud losses handed back to victims whose cases were assessed under the new authorised push payment scam code in the second half of last year.

Nine UK banks are signed up to the code, including the UK’s biggest high street names as well as the Co-op Bank, Metro Bank and Starling.

The code states victims of APP scams, which take place when customers transfer money directly to fraudsters who are impersonate someone the victim trusts, ‘should’ be reimbursed, unless they ignore warnings from their bank or were grossly negligent.

But despite the supposed additional protections and the code requiring banks to up their game, losses to APP fraud actually increased by 29 per cent last year to £455.8million. 

And victims were still not getting money back nearly three-fifths of the time.

The ombudsman’s latest announcement comes just two months after it released a review which blasted banks’ handling of the new code.

It said code signatories were ‘inappropriately declining reimbursement’, ‘applying generic reasoning to individual complaints’, ‘making decisions based on assertion, rather than on the evidence’, ‘not taking into account the full circumstances of the scam’, and ‘not giving reasons for their conclusions’.

Banks were also often offering victims 50 per cent of what they’d lost when they should have offered all of the money back. 

The FOS said in some of the cases it had seen the way banks had interpreted the code meant the ‘presumption in favour of reimbursement is in practice effectively reversed.’

The review was released alongside a report from the UK’s Payment Systems Regulator, which also found Britain’s banks had wildly differing reimbursement rates, with one bank handing victims all their money back in just 1 per cent of cases.

Another bank handed some money back in 96 per cent of cases, but rarely reimbursed all a victim’s losses.

Scam victims were receiving very different responses to their cases depending on their bank

Scam victims were receiving very different responses to their cases depending on their bank 

Trade body UK Finance, which represents the banks, previously told This is Money in response to the findings: ‘The banking and payments industry is wholly committed to defending its customers from authorised push payment fraud and stopping stolen money going to criminals.

‘The APP Code, developed on a voluntary basis by the larger firms together with consumer groups, has established stronger customer protection standards and meant more victims are receiving compensation.

‘However, as we have previously said a voluntary agreement alone is not enough and issues of liability and reimbursement would best be addressed by new legislation.’

£38.3bn had been paid out in compensation to victims of PPI mis-selling by the end of 2019

£38.3bn had been paid out in compensation to victims of PPI mis-selling by the end of 2019  

PPI surge in before August deadline… 

The FOS also revealed it received 122,153 complaints about Payment Protection Insurance in 2019-20, which included a spike in complaints following the Financial Conduct Authority’s 29 August deadline for consumers to complain about Britain’s most mis-sold financial product.

However, this was 60,000 fewer complaints than the FOS received last year.

According to the FCA, £38.3billion has now been paid out in PPI compensation between January 2011 and December 2019.

But the FOS said some complainants might have to wait until this summer to hear back from their bank about their claim, due to the millions of enquiries and complaints made.

Chief ombudsman Caroline Wayman said: ‘This year the Financial Ombudsman Service resolved well over a quarter of a million complaints. 

‘Each one of those involved a question of fairness, and someone whose life had been disrupted because of a financial dispute.

‘The fundamentals of good customer service, and good complaint handling, are constant, and the majority of financial businesses know this. 

‘However, some businesses still need to put fairness first in how they handle customer complaints. 

‘A key part of our work in the future will be to proactively prevent complaints, to stop unfairness arising in the first place.’

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Cash made up just 23% of transactions in 2019 as contactless boomed

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Cash was used for less than a quarter of all payments last year for the first time ever, new figures show, as people frequently choose debit cards and contactless to make payments instead.

The percentage of all payments made using banknotes and coins fell to 23 per cent in 2019, according to trade body UK Finance, down from 48 per cent as recently as 2014.

Instead, consumers were increasingly paying using contactless credit and debit cards, with card payments being used to make more than half of all payments for the first time ever last year.

Last year saw further decline in the use of cash, as debit cards and contactless payments in particular continued to gain at its expense

Debit cards became more popular than cash payments three years ago, and UK Finance last year forecast that cash would make up just 9 per cent of all transactions by 2028, with even direct debits accounting for more.

While UK Finance shelved any future predictions this year due to the uncertainty caused by the coronavirus pandemic, there are fears the virus could lead to a steeper decline in the use of cash than previously expected.

Already 14 per cent of people in 2019, an estimated 7.4million Britons, said they made one or no cash payments a month, up from 2.9million people in 2016.

Although the trade body rejected the idea of a ‘cashless society’, finding an estimated 2.1million people still mainly used cash, a figure down just 600,000 people on 2016, contactless usage has boomed during the coronavirus pandemic and government guidelines mean some businesses have already begun rejecting cash payments.

Natalie Ceeney, who chaired the Access to Cash review, said: ‘This UK Finance data was taken before the impact of coronavirus, which has accelerated the shift to digital payments and further challenged the viability of the cash infrastructure.

‘It’s essential that we ensure that everyone is included in our economy, and until digital payments work for everyone, we need to maintain people’s ability to access and pay with cash.’

Cash made up less than a quarter of all payments for the first time ever in 2019

Cash made up less than a quarter of all payments for the first time ever in 2019

Fears over banknotes and coins spreading the virus have forced those already worried about disappearing access to cash onto the defensive, as cash machine withdrawals fell during Britain’s coronavirus lockdown.

Last week This is Money reported that NoteMachine, one of Britain’s largest ATM providers, was launching a ‘Cash is Safest’ campaign aimed at the public and retailers, with its chief executive Peter McNamara telling us the idea cash was a dirtier payment method was ‘the greatest piece of fake news floating around at the moment.’

Nonetheless, cash usage is falling – even before Covid-19 – with younger generations particularly unlikely to use physical money to pay for things. 

A quarter of 25 18-24-year-olds and 24 per cent of those aged 25-34 used cash once a month or less last year, UK Finance said.

Research has frequently revealed Britons are using less cash because they are worried about the possible health risks of it, something which could endure after the pandemic ends

Research has frequently revealed Britons are using less cash because they are worried about the possible health risks of it, something which could endure after the pandemic ends

John Howells, chief executive of Link, which runs Britain’s cash machine network, called for legislation to maintain cash for ‘as long as it is needed.’

He said: ‘Less than ten years ago, cash was used for more than half all of payments. Yet, over the past five months we have seen reductions in ATM volumes that were expected over five years – we think it could be as low as one in 10 payments now.

‘During the lockdown we have seen a large drop in ATM volumes, down by 55 per cent and while these numbers have begun to come back up Link research shows because of coronavirus, 54 per cent of consumers say they will use cards more and a third say they will use ATMs less.

‘There is still almost £1.5billion being withdrawn from ATMs a week and millions of people aren’t yet ready to go cashless. What’s needed now is legislation to maintain cash for as long as it is needed.’

Contactless has boomed in popularity over the last few years. Nearly four in five people in the UK made a contactless payment last year

Contactless has boomed in popularity over the last few years. Nearly four in five people in the UK made a contactless payment last year

With cash declining in importance, contactless payments appear to be the biggest beneficiary. 

Even before the limit was upped to £45 in April, more than a fifth of all payments were made using contactless last year, up from 15 per cent in 2017.

Close to four in five people made a contactless purchase in 2019, up from 69 per cent the year before. 

Mobile payment methods like Apple Pay are most popular among millennials

Mobile payment methods like Apple Pay are most popular among millennials

At least 68 per cent of all age groups used contactless last year, with even nearly seven in 10 of those aged 65 and over doing so.

However, the use of eWallet payments like Apple, Google or Samsung Pay was still predominantly among younger generations. 

Nearly two in five of those aged 25-34 were registered for mobile payments last year, compared to 5 per cent of over-65s.

UK Finance chief executive Stephen Jones said: ‘An increase in ways to pay coupled with the change in people’s payment habits may have inadvertently gone some way to prepare the nation for the impact of coronavirus on their daily lives.

‘With consumers already using contactless payments and remote banking more than in previous years, these technological advances have allowed many people to shop and make payments safely from home or in store.

‘The impact of coronavirus may accelerate these habits for many customers.

‘However, we are fully aware that not all customers are digitally-enabled which is why we are working flat out to ensure people have access to cash and everyday banking services remain available to help the country through these difficult times.’

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Reports of a buyer for Neil Woodford’s biotech holdings emerge

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Fresh hope for Woodford investors? US firm reportedly closing in on a deal to snap-up his stricken fund’s biotech holdings as one-year anniversary of its closure passes

  • US-based Acacia Research Corporation is reportedly close to snapping up Neil Woodford’s biotech portfolio for just over $300m, according to Sky News
  • Today marks one year since the Woodford Equity Income fund was suspended
  • It still owes £550m to investors but hasn’t said when they might expect it back
  • Acacia invests in intellectual property and patented technologies 

By Jayna Rana For Thisismoney.co.uk

Published: | Updated:

Investors trapped in the Woodford Equity Income fund could see some money sooner than they thought as the sale of its biotech portfolio is reportedly on the brink of closing.

Acacia Research Corporation is set to buy a portion of the remaining holdings in the fund, which was suspended one year ago today, for just over $300million, according to Sky News.

The US-based company, which invests in intellectual property and patented technologies, is part-owned by well-known activist fund Starboard Value. 

Woodford’s biotech portfolio includes Oxford Nanopore and Rutherford Cancer Centres

The deal, which has not yet been confirmed, would see the transfer of shares in a number of up-and-coming British biotech names such as Theravance Biopharma, Oxford Nanopore and Rutherford Cancer Centres. 

Talks between Acacia and Link Financial, which has been managing the sale of assets under Woodford Investment Management, reportedly took place in April.   

Last year Acacia struck a deal with Starboard to provide it with with up to $400m for ‘strategic investments and acquisitions’. 

Other companies have explored making an offer for the fund’s remaining assets over the past year, such as Abu Dhabi-based sovereign wealth fund Mubadala and specialist life sciences investment bank WG Partners.    

Commenting on the reports, Adrian Lowcock, head of personal investing at Willis Owen, said: ‘If true, this news of a US specialist buying stakes in Woodford’s biotech holdings could be the miracle investors have been waiting for.

‘Trapped savers who put billions into Woodford’s flagship fund have seen their money locked up for a year now, so hopefully this news – on the anniversary of the fund’s suspension – comes to fruition and enables them to get some more of their money back.

‘Of course there will be questions about what value should be put on those companies, but at this stage, something would be better than nothing for investors, many of whom were concerned costs were eroding the remaining value of the fund.’

Fallen from grace

Neil Woodford was forced to suspend his Equity Income fund on 3 June 2019, just five years after it was launched, after a deluge of withdrawal requests and an extended period of poor performance. 

While investors have seen two payments worth £2.3billion made back to them, there is still some £558million to be returned. 

Fallen star manager Neil Woodford in better times before his fund hit the skids

Fallen star manager Neil Woodford in better times before his fund hit the skids

The remaining holdings are in unquoted companies, which are known for delivering high returns but are extremely high-risk and their illiquid nature is arguably what led to the manager’s downfall. For these reasons they are usually also difficult to offload. 

Lowcock added: ‘What was always going to be more problematic was selling unlisted private equity investments, which were the reason Woodford got investors into this mess in the first place.’ 

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.



Car makers face an uphill recover post-Covid with April sales in Europe falling 78%

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The toll the coronavirus has taken on car makers has been unveiled by industry figures, with a 78 per cent collapse in registrations in Europe in April. 

In a month where UK vehicle sales plunged 97 per cent, the volume of new cars bought across the continent fell from 1.34million in April 2019 to 292,600 cars in April 2020 – the lowest monthly level since the 1970s, and the worst result among the big three markets, which include China and the US. 

However, early market figures for May suggest some European nations are already showing signs of recovery as the opening of showrooms and demand for new car begins to return…

Car sale slip on the continent: New figures have revealed the huge impact Covid-19 has had on the automotive industry, with every European nation posting a dramatic decline in registrations in April

UK posted a bigger decline in car registrations in April than all other European nations bar Italy 

Only India saw a bigger decline new car sales in April than Europe, with a 100 per cent nosedive in registrations that month, according to vehicle data analysts JATO Dynamics.

The worst hit car markets in Europe were Ireland and Spain – down 96 per cent – and Italy and the UK – plunging 97 per cent. 

Felipe Munoz, global analyst at JATO Dynamics commented: ‘Lockdown across the globe contributed significantly to the huge drop in registrations. 

Car registrations plunged by 78% in Europe in April, official figures have revealed Tuesday

Car registrations plunged by 78% in Europe in April, official figures have revealed Tuesday

‘Not a single manufacturer was prepared for this scenario or expecting a crisis on such a large scale. 

‘The only silver-lining from this turbulence is that it has created an opportunity for automotive players to reassess their operations and become more agile.’ 

As quarantine was not enforced across all countries, registrations fell at different times and different levels. 

For instance, in Scandinavia, citizens were granted more freedom of movement, thus registrations fell by 37 per cent.

Norway, Denmark, Sweden and Finland were the best performers, all posting declines in the region of 34 to 39 per cent in April. 

Analysis of each market in Europe revealed that the global pandemic impacted the sales performance of 419 (out of 433) models that were available in both April 2019 and April 2020. 

Only 13 models on sale a year ago saw an increase in registrations.

This included the Mercedes-Benz electric EQC (42 units to 409), Porsche Cayenne Coupe (68 to 210), Skoda Scala (713 to 1,673), BMW X7 (202 to 341), Audi’s electric E-Tron (963 to 1,307), Mercedes-Benz GLE (1,047 to 1,272), BMW X6 (405 to 471), and Mercedes GLS (174 to 195).  

In contrast, the British-built Nissan Qashqai, Fiat Panda, Volkswagen Polo, Opel Mokka and Peugeot 3008 recorded the largest declines in market share on the continent. 

These were the best-selling cars across Europe in April, with vehicle registrations hitting the lowest level on the continent in around 50 years

These were the best-selling cars across Europe in April, with vehicle registrations hitting the lowest level on the continent in around 50 years

'Not a single manufacturer was prepared for this scenario or expecting a crisis on such a large scale,' said Felipe Munoz, global analyst at JATO Dynamics

‘Not a single manufacturer was prepared for this scenario or expecting a crisis on such a large scale,’ said Felipe Munoz, global analyst at JATO Dynamics

The fall in car registrations in April saw electrified cars - pure electric and hybrids - improve their market share to almost 1 in 5 new motors bought in the month

The fall in car registrations in April saw electrified cars – pure electric and hybrids – improve their market share to almost 1 in 5 new motors bought in the month

Manufacturers already invested in EVs are best-placed to recover as almost 1 in 5 cars sold in Europe in April were electrified

There was positive news for electric car manufacturers, with electric and hybrid cars making up 17 per cent of all sales in Europe in April. 

Some 50,400 plug-in cars were registered in the month, with demand for plug-in hybrid increasing by 7 per cent to 14,000 models.

Pure electric car sales dropped by just 29 per cent with 16,700 vehicles registered and hybrid cars declined 66 per cent to 18,900 units.

Munoz explained: ‘EVs were already driving part of the small growth that remained in 2019. This year, as governments have acted quickly to protect their people and economies, EVs have gained even more traction and visibility due to incentives.

‘These cars are likely to become the top choice for consumers seeking private transportation. Manufacturer who have invested heavily in EVs are best placed to navigate the tough months ahead.’

As showrooms reopen across the continent, analysts say there are already signs of recovery for the motor trade

As showrooms reopen across the continent, analysts say there are already signs of recovery for the motor trade

Early registration figures for May suggest steps towards recovery

With UK car dealerships allowed to open their doors to customers again from 1 June, other nations gave the motor showroom operators the green light the month before.

As a result, early figures released for May suggest markets are showing signs of recovery. 

In Italy, which saw a 96 per cent slump in April, registrations declined 53 per cent year-on-year last month.

France was the best market performer, exceeding expectation with a 47 per cent decline in May compared to a 89 per cent fall the month previous.

Spain, another nation to endure a terrible month of car sales in April, was down 71 per cent in May, which was an improvement on April stats.

Even Ireland posted an improvement, despite the fact all dealerships were closed during the month.

Registrations of 1,750 new cars in May was down 72 per cent year-on-year but will be seen as a step in the right direction following the 96 per cent plummet in April. 

And some car makers are reported an uplift in demand in May, with Volvo stating that it sold 44,830 cars globally last month, down just 25.5 per cent compared with May 2019.

The Swedish brand – now owned by Chinese megafirm Geely – said the May improvement was due to sales and showroom traffic trends in Europe improving and sales in China continuing to grow.

In the US, sales of Volvo cars recovered quicker than expected as more states loosened restrictions put in place due to the coronavirus pandemic. 

Dealerships in the UK were allowed to welcome back customers at the start of this week, though with a a raft of new social-distancing and hygiene rules in place

Dealerships in the UK were allowed to welcome back customers at the start of this week, though with a a raft of new social-distancing and hygiene rules in place

Commenting on the early registration reports for May, Calum MacRae, automotive analyst at GlobalData, said: ‘After the seized up and locked down markets of March and April, this is a welcome sign of life in markets that were the first in Europe to be engulfed by the Covid-19 outbreak. 

‘It’s early days, but May’s performance could see GlobalData’s forecast for the market revised upwards. 

‘The reporting markets accounted for 36.5 per cent of European light vehicle sales in 2019, so it would be brave to make too many inferences from the sample, but it’s a broadly encouraging set of results. 

‘Currently, we forecast a 25.1 per cent fall in European light vehicle sales in 2020 to 15.4million.’

The news will offer a modicum of relief to Europe’s car makers, which have been restarting production lines across the continent, with VW, Mercedes and Volvo manufacturing vehicles from as early as 20 April.

A buyer seen visiting a Volkswagen dealership in South London on Monday 1 June - the first day UK car showrooms were allowed to open since the nation went into lockdown on 23 March

A buyer seen visiting a Volkswagen dealership in South London on Monday 1 June – the first day UK car showrooms were allowed to open since the nation went into lockdown on 23 March 

The first UK car brand to start production was Rolls-Royce on 4 May, with other including Jaguar Land Rover assembling cars since then.

Around half of the country’s car and engine plants were operational by the end of May, the UK’s motor trade body confirmed.

Official figures for UK car registrations are due to be revealed by the Society of Motor Manufacturers and Traders tomorrow.

Expectations are relatively low, given showrooms were shut for the entirety of the month – though dealers were given the go-ahead to sell motors online and deliver them with ‘click and collect’ services throughout April.

Commenting on the chances of recovery for the European new car market, MacRae added: ‘Much depends on how markets settle down in the coming weeks as the initial wave of pent-up demand is met and we start to get a feel for how economies are really performing in the wake of this unprecedented crisis. 

‘We are still a long way off pre-crisis norms, but the automotive market is at least getting up off the floor.’

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Don’t wait to file your tax return to HMRC

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Don’t wait to send your tax return: Filing now could give you eight months to save

By Money Mail Reporter For The Daily Mail

Published: | Updated:

Those who need to complete a self-assessment tax return should have received a P60 form

Send off your tax return now to avoid a tricky last-minute bill.

Those who need to complete a self-assessment tax return should have had a P60 form showing the tax and national insurance paid in the last tax year.

About 11.1 million people submitted a tax return online last tax year – more than 700,000 of whom did so on the January 31 deadline. 

If you owe more tax, you will still have until January 31 to pay the bill.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says filing now could give you eight months to save. 

You must complete a return if you are self-employed, a partner in a business, or have an income from renting out a property or savings and investments.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Frankie & Benny’s permanently shutting sites, report says

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Frankie & Benny’s understood to be permanently closing swathes of its restaurants and axing staff as the casual dining sector buckles under lockdown

  • Owner The Restaurant Group reportedly sending email to affected staff at sites
  • Email tells staff sites are ‘no longer viable to trade’, BBC report suggests 
  • Over 22,000 staff at The Restaurant Group have been furloughed to date 

By Jane Denton For Thisismoney

Published: | Updated:

The company behind Frankie & Benny’s and Wagamama restaurants is gearing up to tell staff that a large number of its sites will not reopen after lockdown, it has been reported.

In an email sent to staff, The Restaurant Group will tell its workforce that many sites are ‘no longer viable to trade and will remain closed permanently’, according to the BBC.

While it remains unclear exactly which or how many restaurants and staff will be affected, the email is being sent to mangers in the company’s Leisure Division, which comprises over 200 Frankie & Benny’s restaurants.

At risk? A number of sites in The Restaurant Group’s portfolio may not reopen

The email being sent to managers reportedly says: ‘The Covid-19 crisis has significantly impacted our ability to trade profitably, so we’ve taken the tough decision to close these restaurants now.’

Staff working in affected restaurants now due to stay permanently closed are look set to be told: ‘Unfortunately, unless there are any suitable alternative roles identified, it’s likely your role will be made redundant.’

Imminent Frankie & Benny’s closures were already announced by The Restaurant Group back in February, with the group saying it planned to shut up to 90 restaurant sites by the end of next year. 

This is Money has contacted The Restaurant Group for comment. 

The Restaurant Group, which has around 22,000 staff on furlough at the moment, was forced to shut the bulk of its Chiquito Mexican-style sites as well as its Food & Fuel chain of pubs in London this year after collapsing into the hands of administrators. 

While Frankie & Benny’s and Chiquito sales fell 2.8 per cent last year, other brands in The Restaurant Group’s portfolio, like Wagamama, have fared better.

Over the last year, the group saw total sales climb over 56 per cent to £1.07billion after being buoyed by its £559million acquisition of Wagamama in October 2018. 

In February, The Restaurant Group’s boss Andy Hornby said: ‘Our three growth businesses of Wagamama, concessions and pubs are all outperforming their respective markets and have clear potential for further growth.

‘I am also acutely aware of the challenges facing our leisure business and the wider casual dining sector.’

Tough times: The Restaurant Group has already shut the bulk of its Chiquito restaurants

Tough times: The Restaurant Group has already shut the bulk of its Chiquito restaurants

Stronger sales: The company's Wagamama sites are faring better in terms of sales

Stronger sales: The company’s Wagamama sites are faring better in terms of sales

Closures: Jamie Oliver's 'Jamie's Italian' restaurant group collapsed last year

Closures: Jamie Oliver’s ‘Jamie’s Italian’ restaurant group collapsed last year 

The restaurant sector has been seriously hit during the pandemic, with outlets forced to closed up and down the country. 

The sector looks set to be among the last to given the green light by the Government to get back into gear again.

While many sites like shops are reopening on 15 June, restaurants and pubs, where the concept of social distancing goes against the very essence of the nature of the businesses involved, will have a tougher time implementing appropriate measures to ensure staff and consumers stay safe.

The Casual Dining Group, which owns Bella Italia and Cafe Rouge, said this week it had received interest from buyers who would snap up its entire portfolio of restaurants. 

The Bella Italia owner filed a notice of intention to appoint an administrator last month ‘as a protective measure’, in a move which could have put around 6,000 jobs at risk.

Even before the pandemic, the challenges faced by the casual dining sector were stark, with high-profile names like Jamie’s Italian collapsing into the hands of administrators in May last year.

In its last set of accounts, Jamie’s Italian reported a £31.1million loss before tax in 2017, citing ‘a marked deterioration in UK consumer confidence” and “increased competition from new entrants.’ 

Following a lengthy spell of financial trouble, Carluccio’s has recently been bought out of administration by Boparan Restaurant Group, the owner of restaurant Giraffe and is now set to reopen in line with the current Government guidelines.  

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Sale of the century: UK’s beleaguered shops prepare to open their doors

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Sale of the century: Prices fall at record pace as UK’s beleaguered shops prepare to open their doors

  • Prices in May fell at the fastest rate since records began in 2006 
  • Desperate stores are rushing to flog mountains of excess stock 
  • The likes of M&S, Boden and Phase Eight are all offering discounts now 

By Daily Mail City & Finance Reporter

Published: | Updated:

Drastic price cuts caused by the coronavirus crisis have begun even before shops open their doors, according to figures released today.

Prices in May fell at the fastest rate since records began in 2006, according to the monthly data from Nielsen and the British Retail Consortium.

The widespread discounting, at a time when shops would normally be selling at full price, has been dubbed ‘sale of the century’ by experts.

Prices in May fell at the fastest rate since records began in 2006, according to the monthly data from Nielsen and the British Retail Consortium

Desperate stores are competing to shift mountains of stock that have built up since the lockdown was imposed on March 23, to bring in cash to survive the crisis.

The price of non-food items such as homeware, toys and books, fell sharply by 4.6 per cent in May, compared to a decline of 3.7 per cent in April.

Clothing and furniture saw the biggest drops as retailers ‘ran promotions to encourage consumer spending and mitigate recent losses’, the BRC said.

Overall shop prices fell by 2.4 per cent in May, the highest rate of decline for at least 14 years, following a 1.7 per cent decline in April.

It means the pace of price deflation has increased substantially compared to the 0.7 per cent average over the last 12 months.

Food prices are rising steadily at a rate of 1.5 per cent due to higher business costs, the implementation of social distancing measures and labour shortages, although price rises will now be tempered as home-grown produce comes into season.

The collapse in non-food prices comes as retailers struggling to pay their bills desperately seek to tempt shoppers to part with their cash.

They are benefiting from business rates relief and the Government’s wage subsidy scheme but most still have to pay for rent, overheads such as utility bills, and committed stock orders.

Helen Dickinson, chief executive of the British Retail Consortium, said: ‘Even as non-essential shops begin to reopen from June 15, consumer demand is expected to remain weak and many retailers will have to fight to survive, especially with the added costs of social distancing measures.

‘Retailers face an uphill battle to continue to provide their customers with high-quality and great-value products despite mounting costs.

‘Government support remains essential, both to rebuild consumer confidence and to support the thousands of firms and millions of jobs that rely on it.’ The crisis on the High Street has already led to Cath Kidston, Debenhams and Laura Ashley going bust.

Shut: Retailers up and down the country have been forced to shut their doors

Shut: Retailers up and down the country have been forced to shut their doors

Retailers saw their share prices hammered as the lockdown came into force, with stores closing and shoppers stopping spending.

High street success story Next, which has a successful online business, saw its share price fell 52 per cent from 7128p to 3390p, but has now recovered to 5402p on the news shops can reopen. 

Marks & Spencer’s share price collapsed from 163p at the start of March to an all-time low of 85p, despite its food business remaining open.

The desperate bid to sell clothes and retain cash reflects the decision by dozens of shopping chains to slash dividends. 

M&S and Primark’s owner, AB Foods, have both slashed dividends, while Frasers Group, which owns House of Fraser and Sports Direct, suspended its share buyback.

Dozens of major names in retail are expected to remain shut when the lockdown is lifted on June 15, including some Topshop, Clarks and John Lewis stores.

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UK’s accidental savers: Poll shows many are better off in lockdown 

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Thousands of us have picked up a surprise savings habit in lockdown, a Money Mail survey reveals today.

The coronavirus crisis has inflicted job losses and pay cuts – and still threatens to kill off many struggling businesses.

But despite the doom and gloom, many Mail readers have found they are saving hundreds of pounds thanks to lockdown, and becoming more financially secure as a result.

Spending cuts: Despite the doom and gloom, many readers have found themselves saving hundreds of pounds thanks to lockdown and becoming more financially secure as a result 

Large expenses such as holidays, commuting costs and entertainment have vanished following unprecedented social-distancing restrictions – giving households the chance to set aside money during an economically uncertain time.

Exclusive research for Money Mail by Consumer Intelligence today suggests 16 per cent of people now feel financially better off. Almost half are spending less since social-distancing restrictions were introduced, with 38 per cent saving more.

Nearly four in five families say they have more money to spend since lockdown, with a quarter having between £200 and £500 more in disposable income each month.

The findings come as figures from the Bank of England yesterday showed the nation saved £16.2 billion in April. In the six months to February households saved an average of £5 billion every month.

What is more, households cleared an astonishing £5 billion of credit-card debt, which was more than double the previous record of £2.4 billion paid off in March. In a standard month the nation would usually clear £300 million of credit-card debt.

Becky O’Connor, personal finance specialist at insurer Royal London, says: ‘A financial divide has opened up during lockdown.

‘While some are really struggling on reduced incomes, there’s another group whose experience has been almost the exact opposite.

‘If you are in a position to do so, there might never be a better time to ‘build back better’ and save.’

Here, Money Mail meets some of the nation’s new ‘accidental savers’.

At last, I’ve managed to build a little nest egg 

By HENRY DEEDES 

All my life I’ve been a spender rather than a saver. Whatever I’ve earned during my career, my bank account has always puffed and wheezed its way through to pay day.

I’ve tried to be sensible. I’ve opened saving accounts, dabbled in Isas. I even bought Premium Bonds once. Much good it’s done me.

You see, any disposable cash I’ve ever had has this annoying habit of winking at me through the computer glass, urging me to go out and enjoy it.

Terrible, I know, but there’s something innately therapeutic about rewarding yourself after a busy week with a little something. 

A case of wine, something new to hang in the flat. Perhaps another ill-advised addition to the summer wardrobe from a tempting online emporium.

Invariably, no sooner have I clicked the purchase button and the boiler will suddenly crank to halt and there’ll be nothing in the cookie jar to pay for a repair. I never learn.

Lockdown has changed all that. Like a lot of people, I imagine, being trapped inside an apartment for the best part of three months has brought about a vast reduction in expenses.

No need now for expensive Travelcards, pricey gym memberships or all those overpriced cups of coffee every day.

And that’s before you’ve taken into account what I used to spend going out to see friends. 

Remember socialising? Drinks rounds, restaurant bills. I dread to think how much I used to splurge on late-night Uber journeys during normal times. But it was a lot.

And so with all these weighty charges lifted from my balance sheet, I’ve started to experience a novelty.

When I check my balance at the end of the month, there’s now actually something left in the kitty. In the past I’d have been tempted to do something extravagant. ‘Why not?’ would have been my attitude.

But in these times of enforced isolation, that thinking has been replaced with what’s the point?

Instead, I’ve been putting it in an online investment Isa with savings app Moneybox. I pay a set amount in each month, as well as any additional funds I might have left over. 

It also has a nifty feature which rounds up all my debit card transactions to the nearest pound and automatically squirrels away the extra cash.

H ow satisfying it has been, how oddly empowering. Each time I check to see how my savings are accruing I now get that same whoosh of excitement I used to get when an Amazon parcel would plonk through my letterbox.

It would be nice to think that when this is all over, when the High Street tills begin to ring again and when the beer pumps start flowing, I will be able to maintain this spirit of restraint. 

If nothing else, this pandemic has taught us how quickly life can go south. In bleak times it pays to be prudent.

Doubtless this is the last thing Chancellor Rishi Sunak wants to hear. As we re-emerge from lockdown, he needs as many idiots like me as possible flashing their plastic around with reckless abandon to get our ravaged economy moving.

But if this crisis does make some a little more financially responsible, surely that’s no bad thing in the long term.  

I have cleared my credit card 

 

Olivia McCulla, who works in PR, has saved by moving back in with her parents

Olivia McCulla, who works in PR, has saved by moving back in with her parents

By moving back in with her parents, Olivia McCulla, who works in PR, has saved enough to pay off her £1,000 credit card debt.

She still pays £775 a month in rent for her flat in North-West London but gets £100 back that would usually go on bills because she isn’t there.

Her £120-a-month travel costs and £150-a-week work lunch habit have also disappeared while she works from her parents’ home near Leeds.

She has also saved thousands after the two hen-dos and four weddings she was supposed to attend this summer were postponed.

However, she now has eight weddings in the diary next year to budget for.

Olivia, 29, who wants to buy a property in the next few years, has opened a new savings account.

She says: ‘It feels more important than ever to have a rainy-day fund with things being so uncertain.

‘In London I was paying £9.50 for a gin and tonic and through the nose for a very small flat I dread going back to.

‘Lockdown has made me question if I even want to buy in London.’

Before the coronavirus crisis, Olivia was saving about £100 a month.

Her father Bernard, 65, and his wife Susan, 66, have seen their household costs rise slightly since their daughter moved home but are also saving money each month. 

They previously spent £100 eating out each week, so their bank balance is boosted by £400 a month. And instead of paying a tradesman £2,000 to replace his patio with a flower garden, Bernard did it himself and slashed the cost in half.

Before social-distancing regulations were relaxed, Bernard was also saving £180 a month on his golf and walking-football memberships.

He says: ‘We are very fortunate. Lockdown has made me think we should live more for today and enjoy our pensions more.’

I feel guilty I’m better off 

Quids in: Ashleigh Meale is saving between £500 and £700 a month

Quids in: Ashleigh Meale is saving between £500 and £700 a month

Ashleigh Meale says her ‘stripped-back life’ means she is now saving between £500 and £700 a month.

This is despite her grocery bill doubling to £400 a month and signing up to a TV and film- streaming service costing £60 a year.

Before lockdown, the 27-year-old recruitment consultant, who is currently working from home, was putting away between £250 and £500 but would spend hundreds of pounds a month socialising with friends at expensive bars and restaurants. 

Now, she and her boyfriend Rob, 38, cook their meals from scratch at home.

Ashleigh, who lives in Sheffield, is also saving £70 a month by working from home and not having to pay to commute by bus.

She has also been unable to spend money on holidays since the Government warned against non-essential travel.

Ashleigh admits that, while she is not a natural saver, she has now realised how much she spends unnecessarily and hopes to remain mindful about what expenses she reintroduces when restrictions are finally lifted.

She says: ‘Feeling better off financially during this time is a strange position to be in and it does make me feel guilty when so many people are struggling. But it has given me time to re-evaluate things, and I have no intention of blowing what I’ve saved.

‘I don’t need to be out all the time spending money on eating out and drinks when I could be just as happy with a barbecue in someone’s garden. What I have missed the most is my friends — not the expensive socialising.’

Pay cut but £400-a-month saving 

Sally Walsh is saving an extra £400 a month on top of £200 she was already setting aside in a help-to-buy Isa

Sally Walsh is saving an extra £400 a month on top of £200 she was already setting aside in a help-to-buy Isa

Sally Walsh was worried when she was told she would have to take a 10 per cent pay cut in March.

But despite the shock announcement, the 24-year-old engineer has found her finances have improved during lockdown.

She is now saving an extra £400 a month on top of £200 she was already setting aside in a help-to-buy Isa.

Since working from home, Sally has saved around £200 a month by not having to commute to central London, and a further £200 by not eating or drinking out after work.

The only bill to go up is her food cost now she cooks almost every meal at home.

Sally, who has lived with her parents in Bromley, South-East London since graduating, is determined to continue saving even after lockdown lifts.

She says: ‘My goal is to move out as soon as possible. I feel like I am closer to it now.

‘I don’t have to spend so much on going out. I hope I will soon be able to have people over and cook for them.’

Childcare cut by thousands 

Claire Jarrett and her partner Jon Howell are saving £50 a day in train fares alone

Claire Jarrett and her partner Jon Howell are saving £50 a day in train fares alone

Claire Jarrett and her partner Jon Howell have saved enough since lockdown to pay for renovations on their home.

The couple need to fix the roof on their house in West Malling, Kent, and want to make the garden more child-friendly for their one-year-old daughter, Eleanor, to play.

Claire, 31, had only been back at work for two days after returning from maternity leave before staff were told they had to work from home.

With Jon, also 31, working from home too, they are saving £50 a day in train fares alone by not having to commute to the insurance firm where they both work in Bromley, South-East London.

They are also saving around £5 a day on lunches at work, £80 a month on petrol and £200 a month by not eating out.

But their biggest saving has been on childcare.

It usually costs £800 a month to send Eleanor to nursery — but the couple have not had to pay since March.

It has helped the couple to replenish their savings after Claire’s maternity leave and move their renovation plans a bit further forward.

However Claire says their financial gain is likely to be short-lived.

She says: ‘Lockdown has made us realise we do not need to go out as much but lots of the costs will be re-introduced when life goes back to normal, unfortunately.’

Not relying on investments 

Retired Gerry Short is making savings by not playing golf, employing a cleaner or taking weekend theatre trips

Retired Gerry Short is making savings by not playing golf, employing a cleaner or taking weekend theatre trips

Retired Gerry Short has seen such a drop in his spending that he has decided to stop withdrawing income from his investments for the next couple of years.

Gerry, 61, a former college principal, has two pensions that pay £20,000 a year. He gets a further £16,000 a year from investments. 

After the pandemic hit the stock market, his investments plummeted. While they have recovered slightly, he wants to give them time to recover.

His reduced outgoings mean he can do this as he is making savings on weekend theatre trips which can cost up to £100 a time. 

He was refunded £60 of his golf-club membership. He also stopped spending £20 on drinks three or four times a week after games. 

The father-of-one, who lives in Leicestershire, also no longer employs a cleaner, which cost £100 a month.

He says: ‘I was aware I was spending a lot as a distraction after my wife died and knew it couldn’t continue. Lockdown has given me time to plan further in the future.’

Windfall from lost holiday 

Dannielle Phillips has had to put expensive holiday plans on halt

Dannielle Phillips has had to put expensive holiday plans on halt

Dannielle Phillips, 32, spends most of her spare cash on trips away.

But since lockdown kicked in, expensive holiday plans have ground to a halt. She has already got an £870 refund for a trip to Mexico that was supposed to take place in April.

And she has received a £500 voucher she can use to re-book her holiday to Portugal in June for next year.

Dannielle, a senior marketing consultant, had always put £250 a month into Premium Bonds, but has since increased this to £750 a month.

Since lockdown began, she has saved around £2,500 in total, which she says would have been impossible for her before.

She has always checked her banking apps frequently, but is definitely more aware of incoming and outgoing transactions now.

Dannielle, who lives in Croydon, South London, says she also feels very lucky it worked out like this because she had originally handed in her notice in February and was planning to leave after finishing a project six weeks later.

But the new job she had been offered fell through so her company agreed to rehire her.

Dannielle says: ‘I am looking forward to lockdown ending but also dreading it because I will need to rebalance old habits.

‘I’m going to try to budget more at the weekends because I want to keep saving to buy a house.

‘Building up my savings has become more important to me because the future feels so uncertain.’

[email protected]

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New images of Dyson’s £500M failed electric car revealed

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New images of British billionaire Sir James Dyson’s failed electric car project have been revealed, showing the seven-seat plug-in SUV in greater detail.  

The protoype, which has a claimed range of 600 miles on a single charge, is the only car built before the plans for an electric vehicle range were axed last October after Sir James – who has a net worth of £16.2billion and is the country’s richest man – ploughed £500million of his own money into its development.

Dyson has admitted that the car, tasked with taking on Elon Musk’s Tesla brand would have need to have cost around £150,000 to break even. 

In an exclusive interview with Autocar magazine, the entrepreneur declared that the cancelled electric car project is not the end to the company’s ‘interest in mobility’.

The Dyson electric car that never was: More images have been revealed of Sir Jame Dyson’s axed EV project, which was scrapped last October after being deemed ‘not commercially viable’ 

The new pictures show the 5-metre-long SUV with Dyson branding clearly on the rear, as it was revealed that the one-off prototype had been developed to a point where it was almost production-ready

The new pictures show the 5-metre-long SUV with Dyson branding clearly on the rear, as it was revealed that the one-off prototype had been developed to a point where it was almost production-ready

The Dyson electric SUV – dubbed project ‘N526’ – measured in at five metres long on huge 24-inch wheels and was designed to offer better ground clearance than rival plug-in models on the market.

Dyson told Autocar that this was his proudest achievement on the vehicle, which would have ‘given [the] car an advantage’ over its competition, such as the Tesla Model X, Jaguar I-Pace and Mercedes-Benz EQC.

He explained that the sheer size of the car was on purpose, as it was designed with the Chinese market in mind, which tends to prefer longer models, because well-heeled buyers are usually driven – rather than driving – and want a more spacious cabin.

The enormous length of the Dyson car also means it could be fitted with three rows of seats and have a potent 150kWh lithium-ion battery installed across the floor, which the vacuum-cleaner magnate still claims today would provide enough capacity for the vehicle to be driven 600 miles on a single charge.

The battery pack, with quick-charging cells, would have taken a shorter period to boost up to maximum capacity that other EVs, though contributed immensely to the car’s 2.6-tonne overall weight.

The prototype features an aluminum body designed to add the least amount of bulk to the already heavy vehicle, while special quiet-running tyres would have masked the magnitude of the Dyson SUV and reduced rolling resistance to extend the car’s zero-emission range.

In an exclusive interview with Autocar magazine, Sir James Dyson - Britain's richest man with a reported wealth of £16.2bn -  declared that the cancelled electric car project is not the end to the company¿s 'interest in mobility'

In an exclusive interview with Autocar magazine, Sir James Dyson – Britain’s richest man with a reported wealth of £16.2bn –  declared that the cancelled electric car project is not the end to the company’s ‘interest in mobility’

The sleek design and long body was aimed predominantly at the Chinese market. This is because most well-heeled customers prefer a spacious interior because they're often driven rather than taking to the controls themselves

The sleek design and long body was aimed predominantly at the Chinese market. This is because most well-heeled customers prefer a spacious interior because they’re often driven rather than taking to the controls themselves

The enormous length of the Dyson car also means it could be fitted with three rows of seats and have a potent 150kWh lithium-ion battery (pictured) installed across the floor to provide a range of 600 miles on a single charge

The enormous length of the Dyson car also means it could be fitted with three rows of seats and have a potent 150kWh lithium-ion battery (pictured) installed across the floor to provide a range of 600 miles on a single charge

With no buyers in sight for the project, Sir James Dyson admits the prototypes and assets will now 'go into a museum'

With no buyers in sight for the project, Sir James Dyson admits the prototypes and assets will now ‘go into a museum’

Sir James Dyson gave Autocar exclusive access to the one-and-only vehicle the manufacturer had finished, with images showing that it had reached near final-production readiness both inside and out. 

The car, which would have simply been badged ‘Dyson’, was supposed to go on sale next year before the project was binned some seven months ago.

Sir James said it would have needed to be sold from 2021 for at least £150,000 per car for the company to break even.  

Inside, the dashboard was built purposefully low to the line of sight and all the controls are mounted on a centre boss in the steering wheel for a ‘hands on the wheel, eyes on the road, mind on the drive’ philosophy, the billionaire explained to the car magazine. 

Information is delivered via a head-up display with plans for a hologram-like projection in the driver’s eye-view that hovers in the air. 

The dashboard was built purposefully low to the line of sight and all the controls are mounted on a centre boss in the steering wheel for a 'hands on the wheel, eyes on the road, mind on the drive' philosophy

The dashboard was built purposefully low to the line of sight and all the controls are mounted on a centre boss in the steering wheel for a ‘hands on the wheel, eyes on the road, mind on the drive’ philosophy

Dyaon planned to equip the car with a head-up display that showed holograms of information to the driver and passengers

Dyaon planned to equip the car with a head-up display that showed holograms of information to the driver and passengers

The electric SUV was designed to have radically different seats. Sir James Dyson said conventional car seats had become 'a kind of pastiche of the 1930s armchair'

The electric SUV was designed to have radically different seats. Sir James Dyson said conventional car seats had become ‘a kind of pastiche of the 1930s armchair’

The inclusion of a multi-function screen in the middle of the dashboard was only included due to legislation. Dyson admitted in the interview that he dislikes it.

A closer look at the prototype reveals that the car would have also featured radically different seats that passengers could fully recline.

Sir James Dyson said this was because conventional car seats ‘…have become, a kind of pastiche of the 1930s armchair’. 

He added: ‘Our seats are the antithesis of that. We tried to express in visual terms the ergonomic qualities a good car seat should have, especially effective lumbar support.’

Dyson ultimately had to pull the plug on his electric vehicle project after it was deemed ‘not commercially viable’, against a backdrop of traditional automotive players quickly pivoting to electric cars in response to the Dieselgate scandal, with many key brands willing to make a loss on their electric models.

The break-even £150,000 asking price for the Dyson would be beyond reach for most buyers, in an increasingly competitive market. 

The Dyson electric SUV - dubbed project 'N526' - measures in at five metres long and, fitted with 24-inch wheels, was designed to offer better ground clearance than rival plug-in models on the market

The Dyson electric SUV – dubbed project ‘N526’ – measures in at five metres long and, fitted with 24-inch wheels, was designed to offer better ground clearance than rival plug-in models on the market

Dyson said he continues to be interested in transport and added that it won't be the end of Dyson's shift into the automotive sector

Dyson said he continues to be interested in transport and added that it won’t be the end of Dyson’s shift into the automotive sector

Autocar was also provided with images of one of the powerful electric motors that would have powered the pricey electric SUV

Autocar was also provided with images of one of the powerful electric motors that would have powered the pricey electric SUV

The prototype model, finished in a white paint with a Dyson badge on the boot door, currently sits under dust sheets at the company’s centre in Hullavington, Wiltshire.

With no buyers in sight to continue the failed project, Dyson also admitted to Autocar that both the prototypes and assets created up until the plug was pulled will now ‘go into a museum’.

However, he told Autocar that this won’t be the end of his electric car projects. 

In the interview, he says: ‘We only go into markets if we’re convinced we have a good idea. But if we thought we had the idea and the technology to make a difference, we’d do it. Or certainly consider it. 

‘Transport interests me: this is not an end to Dyson’s interest in mobility.’  

The prototype model, finished in a white paint with a Dyson badge on the boot door, currently sits under dust sheets at the company¿s centre in Hullavington, Wiltshire

The prototype model, finished in a white paint with a Dyson badge on the boot door, currently sits under dust sheets at the company’s centre in Hullavington, Wiltshire 

The prototype features an aluminum body designed to add the least amount of bulk to the already heavy vehicle, while special quiet-running tyres would have masked the magnitude of the Dyson SUV and reduced rolling resistance to extend the car's zero-emission range

The prototype features an aluminum body designed to add the least amount of bulk to the already heavy vehicle, while special quiet-running tyres would have masked the magnitude of the Dyson SUV and reduced rolling resistance to extend the car’s zero-emission range

The car, for which blueprints were revealed last year, was due to be produced at the newly-acquired UK facility, which was a formerly an RAF base.

It had been the subject of a £250 million renovation as a development and test site for the car.

The car project received funding from the UK government, as it was believed the new R&D base would boost jobs in the town.

The £7.8million grant was handed to the British manufacturer in 2016. However, with the electric vehicle project officially scrapped in October, the grant was recouped by the government at the beginning of this year.

In an interview with the Times last month, Dyson said he believed a government plan to ban sales of all fossil-fuel cars by 2035 ‘is absolutely doable’, adding that he ‘hates diesel’ engines. 

A prominent Brexit supporter, Dyson sparked controversy in 2018 when he revealed that production of the electric cars would be in Singapore, along with the firm’s headquarters.

Dyson still backs the decision on the basis that Asia is the fastest-growing market in the world and already accounts for half of the company’s sales.

‘Asians love new technology, that latest thing, and absolutely get design. If you are designing things for people in Asia, you should be in Asia,’ he said.

What we knew about the Dyson electric car before plans were ditched…

The design showed a sloping windscreen, a low roof height and plenty of space in the floor for batteries to be installed

The design showed a sloping windscreen, a low roof height and plenty of space in the floor for batteries to be installed

No pictures of Dyson’s electric car prototypes had been seen and the vehicle’s details remain a closely guarded secret, even after the plans were scrapped.

The patents of the first model planned showed a seven-seat crossover vehicle with plenty of ground clearance, a sleek bonnet and slab-backed rear end.

The drawings showed a space under the cabin floor, presumably to be filled with the batteries used to power the electrified vehicle. 

Descriptions said it would be between 1.6 and 1.8 metres high and 4.7 metres to 5 metres long – around the same dimensions as the current Range Rover. 

The patents showed a crossover vehicle with a raised platform and massive wheels

The patents showed a crossover vehicle with a raised platform and massive wheels

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One in twenty of our residents has died, care home chief warns

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Jeremy Richardson, who runs one of the UK’s biggest care home chains, is at the heart of the Covid-19 crisis.

As chief executive of Four Seasons Health Care, he has seen more than one in 20 of the elderly residents in his homes die in the pandemic.

Already under heavy financial pressure, the virus has plunged the sector deeper into difficulty, and he says that many small care home groups are at risk of going bust without Government intervention.

Already under heavy financial pressure, Covid-19 has plunged the care home sector deeper into difficulty

The 49-year-old, who previously ran hotel groups and caravan parks, is angry, lashing out at ‘disingenuous’ ministers for their handling of the coronavirus outbreak.

Care homes were not prioritised at the start of the pandemic, he says, despite the fact that ministers knew Covid-19 was particularly harmful to the elderly.

Since then, more than 490 of his residents have lost their lives to the disease, which has been rife across Four Seasons’ 187 homes, at its peak affecting residents in more than 60 per cent of the estate.

The group is having to pay more for personal protection equipment (PPE). It spent £2.5million on products between March and April, compared with £200,000 in a ‘normal year’.

The Mail is helping to address this issue along with its partners through the Mail Force Campaign, raising millions of pounds to import PPE for frontline workers.

Richardson says: ‘At the beginning of the pandemic, there was an enormous scrabble for PPE. That drove the price of items up.’

He saw a lot of what he calls ‘extreme entrepreneurial activity’ – a polite term for rip-offs and exorbitant pricing – which he says is ‘deeply frustrating’.

In some cases, Four Seasons was paying up to four times the usual price for basic items of protective equipment, though he felt he had no choice but to buy.

‘At that point, what I’m not going to do is let my opinion on other people’s moral judgments impact whether I buy or don’t buy. Ultimately I have to make sure my teams are safe,’ he says.

He argues the Government should be stepping in to provide more money to care homes to help pay these costs.

Without this, smaller operators will be at real risk of going bust. A report from healthcare data firm Laing Buisson last month found that care homes in England, even before the added costs of PPE, need to charge between £696 and £849 per week to survive.

But last year, councils in England on average paid only £596 per week for residents under their care. In other words, there’s a hefty shortfall.

Richardson is now calling on the Government to funnel more money to the frontline.

Small operators are particularly vulnerable, Richardson says, as they tend to have less financial firepower.

‘A very large percentage of the care home market remains with single sites or owners of just one or two sites. 

‘It wouldn’t surprise me at all if you saw a number closing because of the pressures that they’re under and the difficulties they’ve had to encounter,’ he adds. ‘It could well be the straw that breaks the camel’s back.’

Four Seasons is one of the country’s largest care home chains, housing around 8,600 vulnerable residents.

Four Seasons boss Jeremy Richardson claims billions of pounds of extra Government money for social care is not getting through to homes but instead is going to pay council overdrafts

Four Seasons boss Jeremy Richardson claims billions of pounds of extra Government money for social care is not getting through to homes but instead is going to pay council overdrafts

Though it is managing to turn a profit, after bumping its weekly resident fees up to an average of £792 per person in the first three months of this year from £767 a year ago, Richardson says that the industry desperately needs more help.

He claims billions of pounds of extra Government money for social care is not getting through to homes but instead is going to whittle down council overdrafts.

‘The Government will say that they’ve invested £3.2billion in social care over the last 12-24 months, and they’ve now made a further announcement of £600million. That’s factually correct.

‘The problem is the scale of overdrafts in local authorities’ social care budgets is in excess of £10billion.

‘So that £3.2billion doesn’t plug what is a very large gap. What local authorities are doing is reducing the size of their collective overdrafts.

‘Money which is coming from the Government is not flowing through to care home operators, which is where it needs to get to because we’re the people incurring the additional costs.’

In the longer term, he is calling for a cross- Parliamentary working group to be established to rethink how social care is funded.

But his immediate problems include inadequate testing. Richardson does not know exactly how many residents have contracted the disease.

‘We just weren’t able to test at the beginning of the outbreak.’

More than 490 Four Seasons residents have died of known or suspected coronavirus infection so far, and the disease is still affecting residents in around half its care homes.

Its death rate has been around twice the seasonal average since March, and during the group’s worst week in early March it recorded 217 deaths, which is around three times the same week in a normal year.

Richardson wants increased testing but he says that, in order to be useful, the tests need to be regular to ensure staff do not pick up the virus and pass it on.

This would mean hugely ramping up capacity. If Four Seasons’ carers were tested weekly, they would use 12,000 tests per week, or almost 10 per cent of the country’s target capacity.

Though Richardson has some hope that the Boris Johnson and his Cabinet are listening to the plight of operators, he believes that was not always the case.

‘I think it’s disingenuous of the Government to say that they were focused on care homes right at the beginning of this crisis and that they threw a ring around care homes from the start. That was plainly not the case,’ he says.

‘I don’t expect anybody, least of all the Government, to get everything right.

‘But the bit I find incredibly depressing is that we move towards finger-pointing and trying to apportion blame before we’re out of the crisis.

‘The Government are blaming the scientific advisers, the scientific advisers are saying it’s the politicians’ fault, the Opposition are pointing the finger at the Government, the Government are trying to defend their record.

‘The reality is we’re still in the midst of the crisis, and the more energy that gets expended on defending things and pretending that you’ve got everything right, the less energy you’ve got for actually addressing the issue in front of you.’

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