6. Group debt costs and other interest

6 – Group debt costs and other interest

Group debt costs and other interest of £636 million (2008: £379 million) comprise internal and external interest on borrowings, subordinated debt; intra-group loans not allocated to local business operations and the net finance change on the pension scheme. External interest costs increased to £335 million (2008: £286 million) reflecting higher interest on subordinated debt, due to the hybrid debt issued in 2008 and 2009, partly offset by lower commercial paper interest as proceeds from the hybrid issue were used to repay some commercial paper. Internal interest costs increased to £227 million (2008: £197 million) driven by changes to our internal loan balances.

The UK pension scheme net charge represents the difference between the expected return on pension scheme assets and the interest charged on pension scheme liabilities. The net pension charge increased to £74 million (2008: £104 million income) reflecting lower rates of return on lower asset values offset by the unwind of higher discount rates on liabilities.