Charlie Nunn: Great. And then, Martin, thanks for the question on mortgage customers. First thing, we included this slide because we thought and we heard that some of you would be keen just to get a forward look on our mortgage customers, given that we’ve seen a step-up in mortgage payments and the intent of this slide is to give you confidence that we think our mortgage customers can withstand higher payments. One thing which is probably more familiar of the new margin. But just to be clear, I’m not saying it’s easy for our mortgage customers. I’m just saying that we are confident they have the financial decisions and capacity to absorb the kind of difficult uptick in mortgage monthly — mortgage costs that we’re talking about.
Now what’s the reason for that? As you said, overall household income is significantly above the average and you can do the math relatively quickly, although we’re talking about for so many customers GBP3,000 to GBP5,000 post-tax of incremental payments that people are able to make choices to offset other discretionary payments. We’ve done the stress test or the affordability test for our customers over the last 10 years at above 6.5%. So we know they have the capacity to absorb this, and bluntly, our experience and the data you can see over the last nine months, we’ve had elevated mortgage rates post the mini budget has shown that customers can absorb this cost. So not easy for our customers by any means. We also have a very sharp view, as you’d expect from us and given our business model for those customers that have a more significant shock on their interest to income payments.
One of the levels we have looked at historically is about 40% when the mortgage payment goes above 40% of their income. We know that at the moment in time that they sometimes are looking to support. We have a very modest percentage of our portfolio today in that level, and interestingly, when we model that going forward for the next two years, it doesn’t grow very much as a percentage of our portfolio and that’s because a lot of those customers are on standard variable rates. So they’ve already experienced 5% of what we think will be a 5.5% base rate. So not each of those customers, but we think the customers are well placed to make the difficult choices to deal with this. One other thought, and you can see this from the data, which is obviously mortgages, it’s very expensive in the context of U.K. consumers and that’s why the average income is GBP75,000.
We also know that for that end of the market in the U.K., people have broader financial resilience and one of the indicators, as you know, is we’ve talked about the incremental savings that we have in our customers since COVID. We talked during COVID that peaked at about GBP70 billion of growth in savings. We still have over GBP60 billion of those incremental savings and that will tend to be for customers in the higher deciles for the wealth income distribution. So we know these customers have financial resilience and that’s then validated by the spend behavior we’re seeing more broadly. Thanks, Martin.
Martin Leitgeb: Thanks, guys.
Operator: Thank you. Our next question is from Andrew Coombs from Citi. Your line is unmuted. Please go ahead.
