Money blog: Contactless card payment limit could be scrapped (2025)

Nationwide has warned customers have just weeks before it withdraws its switching incentive.

From 31 March, the bank will pull its market-leading incentive - which pays £175 to those switching their current account.

To qualify for the incentive, customers must complete a full switch using the current account switch service and at least two active direct debits must be transferred to the new account.

Customers must also deposit £1,000 and make at least one direct debit payment within 31 days.

"Our switching incentive is a demonstration of how we are making banking more rewarding for customers," Nationwide's retail director Tom Riley said.

"We would encourage anyone looking to switch their account to do so now to benefit from the offer as it will be withdrawn later this month."

The Bank of England's latest decision on the base rate will be announced on Thursday.

Rates were lowered from4.75% to 4.5% - their lowest level for 18 months - in February, but the Bank said it would take a "gradual and careful" approach to further reductions.

Susannah Streeter, head of money and markets at investment firm Hargreaves Lansdown, says the BoE is set to stay in "wait-and-see mode" as financial markets are hit with trepidation about what's in store for global trade.

She says it's unclear what Donald Trump's tariff trade war will mean for the UK, but given how intertwined we are with the global economy, it will feel the effects of an escalation.

"There are hopes of a trade deal between the US and the UK, but given Trump's capricious policymaking, until any agreement is signed, sealed and delivered, the UK is set to stay vulnerable," she adds.

"Given the precarious growth situation, two more rate cuts are on the cards for this year, but it's likely that we will have to wait until May at the earliest before another cut is delivered."

What got you talking this week?

Our feature by Katie Williams on returning to work after spending a long time on leave with a baby has been the subject of many comments.

You can read the full piece here...

Many of you got in touch and argued that the system isn't working...

What we need is a system where women have real choice, where those who would rather spend more time raising their family are financially supported to do so. The focus has always been on getting women back to work. Economic, social and health benefits are huge if we valued mothers.

Laura Howard

I have a three-year-old and work but trying to find childcare that does evenings is impossible as everyone wants evening work to have a job. When it's literally just yourself trying to juggle everything. I want to work but I’m finding it very difficult even with the 30 hours free.
SSh

The system has always been broken. 2008 I was a single mum on £36,000, I went back to work after nine months maternity, I then paid £700pm childcare. My employers were tough they didn’t like my new responsibility, in 2011 I quit and had to go on benefits for two years. I lost my career.
Single mum

And one reader argued it's not just a problem facing women...

It is not just women who face this issue (I was single parent dad) and over 10-year period until daughter reached secondary, worked part time, with major loss in earnings, financial hardship and pension sum for future.

MJ13

We had a Turkish Airlines passenger get in touch with a Money Problem after she said she was thrown off her flight due to her severe nut allergy.

Despite telling the airline ahead of time, Isla said the airline refused to stop serving nuts on the four-hour flight and was told to disembark.

If you have nut allergy, that's not a good way to tell a passenger to get off the plane and not give her a refund that's total discrepancy and misbehaving.
Gfalak

But our some of our readers weren't exactly as sympathetic...

I've been on flights before with my bag of peanut & only to be told not to open them. So honestly it's nice to hear this story round the other way, why should everyone else have to adapt to your situation.
Adam

Stop flying then, she cant expect everyone else to have to comply just for her.
Sadiq

BySarah Taaffe-Maguire, business and economics reporter

While there was bad news for the UK economy from the OECD (see 10.33 post), it wasn't looking good for the whole world either.

The poor global and US performance provided a silver lining for the UK - the pound was up as the dollar fell on the back of OECD forecasts showing smaller economic growth for the world due to Donald Trump's tariffs.

One pound neared a four-month high at £1.2975. The highs of £1 buying €1.21 early in March seem far away, as sterling hangs around €1.19.

On the stock markets, the UK's benchmark FTSE 100 index rose for the fourth day in a row.

The list of most valuable companies on the London Stock Exchange is up 0.27% while the larger FTSE 250 made up more of UK-based companies is down 0.2%.

It comes as no exemption was made for UK steel and aluminium exports to the US. Hundreds of millions of pounds worth of UK exports are now subject to a 25% tariff in the US.

We're in that brief time of year where New York is just four hours behind rather than the typical five hours. It means we can bring you Wall Street news an hour earlier than usual.

Today, US stocks are recovering from the steep falls of the past weeks as uncertainty over tariffs turned to concern when policies took effect.

The benchmark S&P 500 rose 0.45% with the tech-heavy Nasdaq up 0.28% and the Dow Jones Industrial Average (DJIA) index of 30 major companies listed on US stock exchanges up 0.38%.

The contactless limit for card payments could be scrapped as the Financial Conduct Authority (FCA) considers whether the move would benefit consumers, merchants and economic growth in the UK.

Businesses could be given greater control under the proposals being considered, and could promote innovative payment methods or fraud prevention solutions.

It comes after the FCA first announced it was exploring changes to the contactless limit in a letter to Sir Keir Starmer in January.

Among the options put forward, firms using technology to reinforce fraud control could be allowed to set their own limits, as happens in the US.

"This is the perfect opportunity to explore whether we can improve and increase trust in the UK's payments system," David Geale, executive director of payments and digital assets at the FCA said.

"We've worked fast to progress this work, which is one of around 50 measures we put forward at the start of the year to help support economic growth across the UK and, in turn, improve lives."

One of the main themes this week will be the government's plans to change welfare and benefits as they look to save money from the public purse.

Work and Pensions Secretary Liz Kendall is expected to set out the reforms tomorrow, but details of where those cuts could fall are proving highly divisive within Labour.

You can keep across updates in the Politics Hub as the story develops.

Meanwhile, a study released today feeds into the debate.

Research from PwC suggests economic inactivity will continue to grow, with 10% of workers actively considering leaving work for an extended period.

A further 20% have considered leaving in the past year - which rises to 25% for those aged between 18 and 24 - with concerns about mental health being the most cited factor.

Nine in 10 employers say they are concerned about inactivity, with six in 10 seeing an increase in the number of employees leaving the workplace.

57% of businesses say they are worried about recruiting someone who has been inactive, while over a third of employers associate inactivity with people "gaming the system".

Number of inactive workers a 'fundamental challenge'

The number of inactive workers in the UK has been described as a "fundamental issue" by Marco Amitrano, a senior partner at PwC.

"It's the fact that when you go to work with your employer, you're going to feel like it's a place you belong," he told our presenter Darren McCaffrey on Business Live.

"You want to feel like it's a place you want to stay, you want to feel like it's a place that supports you, and people - particularly young people - are not feeling like that."

Amitrano added that there was a "much more holistic solution" that could be pursued involving businesses and the government working together.

"Every client I speak to... they're all willing to lean in because they're all concerned about it," Amitrano said.

"They all see that it's an important matter for them to unlock their ambitions and growth, that in turn fuels the economy."

One of the fastest-growing bubble tea brands in the world has signed a franchise agreement to open more than 225 stores in the UK over the next few years.

Around 2,000 jobs will be created in the UK as Gong Cha looks to expand to 10,000 sites globally by 2032.

After signing the new agreement, Gong Cha, which operates 13 UK stores, hopes to open at sites in Sidcup, Gravesend, Romford and Hornchurch.

"As a market, the UK has huge potential for us," Paul Reynish, global chief executive of Gong Cha said.

"It's a market that is constantly evolving, ripe with innovation and made up of consumers willing to try new and exciting products."

Gong Cha is one of the largest bubble tea brands in the US, operating more than 250 stores across 20 states.

It's also a hit in Australia, New Zealand, Korea and Japan, while having expanded to France, Belgium and the Netherlands in Europe.

When searching for holidays this year, a strong pound means your money could go further in lots of places.

The Post Office has surveyed 47 destinations to create a handybarometer of costs- in the form of a report looking at prices for food, drinks and other items.

The good news is, these costs are going down in around half the areas surveyed last year.

After nine years, the Algarve takes the top spot as the best value location again thanks to the low cost of meals and drinks.

If you're holidaying in the Portuguese region, a three-course meal for two with wine will cost you just £40.33.

Meanwhile, long-haul destinations like Cape Town, Tokyo and Bali are also offering some of the lowest prices for UK travellers.

Take a look at the top 15 best-value destinations in the table below...

By Sarah Taaffe-Maguire, business and economics reporter

Global economic growth has been downgraded by the Organisation for Economic Co-operation and Development (OECD) - as the impact of US President Donald Trump's tariffs becomes apparent.

Major economies including the UK will have lower rates of GDP - a measure of an economy's value and everything produced - due to the US's imposition of taxes on some goods it imports, the Paris-based OECD club of 38 rich countries said.

The UK economy will grow only 1.4% this year, as opposed to the 1.7% previously anticipated.

Next year, the figure will be 1.2%, lower than the 1.3% forecast before Trump took office in January, according to the OECD interim economic outlook.

In response to the OECD figures, Reeves pointed out the UK was forecast to be "Europe's fastest growing G7 economy over the coming years - second only to the US".

"This report shows the world is changing, and increased global headwinds such as trade uncertainty are being felt across the board."

Plans to freeze some disability benefits have been scrapped after growing concerns about the scale of planned welfare cuts.

Work and Pensions Secretary Liz Kendall was expected to cancel an inflation-linked rise to the Personal Independence Payment (PIP) after pressure to cut the benefits bill.

But our deputy political editor Sam Coates has said the freeze on the payment - up to £9,000 a year for people with long-term physical and mental health conditions - will not be going ahead.

Speaking on the newPolitics at Jack and Anne'spodcast, hesaid: "Those suggestions that have been bubbling around for about a week that Personal Independence Payments (PIP) are going to be frozen - which would give the Treasury immediate billions in savings - that isn't going to happen.

"They are still going to rise. It looked like that would provoke too much of a backlash."

Instead, Coates explained, the government will make it harder for people to get the payments.