Theresa May’s Benefit Challenge

Monday marked yet another historical day for Britain, as Angela Leadsom stepped down, leaving a proud Theresa may as current PM David Cameron’s successor. Today, David Cameron moves out, and Theresa May moves into the infamous Number 10, as she attempts to pick up where he left off, guiding Britain slowly but surely out of the EU, whether we like it or not. Becoming Prime minister at such a tumultuous time for Britain will certainly be no easy feat, and Theresa May already has a to-do list from hell as she gets her feet snugly under the Downing Street table. With a new Prime minister in our midst, how will the change of hands affect the day to day lives of those living off pension and benefit payments? Will the change be for the better? Or will harsh cuts continue to leave people financially unstable?

Universal Credit

Unfortunately for low-paid  working families, there are plans for the cuts to tax credits that had seemingly been abandoned by Iain Duncan Smith, to be re-started. The re-introduction of the controversial cuts is said to hit those that need financial support most, with a loss of £3000 a year by 2020. Furthermore, it could be said that the Universal Credit programme has been nothing but hassle since it was initially introduced. The transition from other benefits included Job Seeker’s Allowance to Universal Credit has been complicated and not exactly greeted with open arms as a positive change. As a result, the procedure has been massively delayed and is thought to become one of the biggest challenged for Theresa May to put straight. Parliament have in the past, attempted to discover why there have been delays with Universal Credit and have even accused the DWP of being evasive with their responses. It has been announced that Universal Credit will not be implemented fully until 2021, 4 years after its starting date. The lack of transparency the DWP has provided into the progress of Universal Credit has been seen as unacceptable by many MP’s.

Admittedly, the new system is a lengthy process, with all six existing benefits received by claimants being rolled into one. This calls for complicated IT system and change in the financial routine of 500, 000 people. The Universal Credit system does ultimately account for lower in-work benefits for working families and so when Theresa May attempts to get the enforcement in order, she is likely to be met with backlash, particularly from less than happy claimants. There has been much concern over the sudden and steep withdrawal of benefits, that no doubt May will have to address.

Pension Cuts

Theresa May, will also face an extremely tough decision with her new position of power, dealing with votes for pension cuts after years of annual rises for pensioners. Now she is leading Britain out of the EU, it is likely Theresa may will have the backing of Britain’s older generation. However, with a decision to cut pensions looming, will the support remain amicable? Reports have shown that rates from annuity firms fell by 2% after Brexit was announced, showing a possible glimpse into the future negative effects Brexit may have on pensions and those saving for retirement. With Priti Patel, a female work and pensions minister, set to be appointed by May into the cabinet, could things be about to change?

Reports that have looked into the falling annuity rates have suggested that it could continue, as a post-Brexit recession means that the funding is simply not there, and pressure will be placed on tax revenues, which are needed to pay state pensions. It has been suggested that the changes will affect those that are not already retired, meaning that Theresa May will have to work hard to support the financial futures of those still in work, saving for their future. The promised ‘triple-lock’ on pensions (increasing the payment with price and wage inflation) may now not be possible in the wake of a Brexit. This promise was also made by the now-resigned David Cameron.

As the Prime minister attends his last parliamentary meeting and bids goodbye to the country, we wait with baited breath to see what Theresa may has in store.

How To Avoid HMRC Scams

HMRC scamsUK police are warning members of the public this week over scam emails which intend to steal money. The emails, claiming to be from HMRC, include links to websites that look very similar to the HMRC website. There have been hundreds of reports nationally this week about fake emails from HMRC. The emails tell victims that they’re owed money from the Government agency, and ask for personal details, along with bank details and even password information. Both the police and HMRC want to raise awareness to these types of scams.

Action Fraud, a UK scam busting agency, has received hundreds of reports so far this year, and believe that fraudsters are trying to take advantage of the new tax year changes. A spokesperson for HMRC has said that the agency will never contact people by email or text to ask for personal details. Customers will also never be asked to pay for a visa via cash payments or a money transfer. HMRC have also said that they shut down more than 14 000 sites last year, sites which they said are looking “more and more legitimate”. Action Fraud are also on board with the campaign to raise awareness of money-stealing scams.

Scam emails, claiming to be from HMRC, can link to any service they provide, which you can usually get for free or cheaper than how the scammers are marketing it for. For example, some scammers are trying to sell passports and European Health Insurance cards at a heightened price.

HMRC scamsThis all comes after the arrest of 8 men who have been sentenced following a £1m telephone scam. The men targeted pensioners across the UK, and used the money they obtained to fund people travelling to Syria, some of which have cropped up as ISIS members. One woman, Elizabeth Curtis, 73, lost just over £130 000 of her savings. The men used the guise of ringing her up pretending to be a member of the police. They asked Elizabeth to transfer funds to other accounts, as they believed she was under threat from her bank, who could be stealing her money. A spokesperson for HMRC has said that they believe over half a million pensioners have been affected by the scam, and that the vast majority of victims will be unable to receive their money back. Angela Brooks, the Chairman of Pension Life, noted that the scamming situation in the UK is “out of control” and that she has made complaints to the pensions ombudsman before about the issue.

How To Avoid HMRC Scams

  • Type in website addresses yourself. If you’re wary of any links in emails, type them into google and see what kind of results you get. You may find forums of people asking for information on them as well.
  • Avoid clicking links in emails sent to you by people claiming to work for HMRC. They will never send emails or texts asking for money.
  • If in doubt, message the HMRC twitter account, who can tell you straight away if the email or text is legitimate or not.
  • Think before you click. If you see that the individual sending you the email is a jumble of letters or numbers, the email will usually be fake. Try googling the email address, you’ll find that there might be a few people talking about fake emails relating to that email address.

HMRC warn against using shared computers, for example those found in internet cafes or work computers. This is because some passwords may be automatically saved by the browser you’re using. The government agency have also issued a statement saying they plan on tightening security with their 2 factor Authentication system, which is meant to reduce fraud risk. If you have any doubts about any emails or texts you have received, you should contact HMRC.


HMRC Overcharging Grieving Relatives With ‘Death Tax’


Upset relatives grieving the loss of a relative who has died in the last month have been wrongly taxed on inherited pensions due to an error by HMRC. An error within the HMRC systems has led to the families of people younger than 75, who died since April 6th, having their ‘death benefits’ taxed at the wrong rate, overcharging them by thousands of pounds. This is despite the tax that no tax is actually due, as new rules were previously introduced under the pension reform, which allow anyone who dies under the age of 75 to pass on their retirement fund tax free.

Several pension companies including LV= and MGM Advantage said that relatives of customers who were deceased had received letters from HMRC saying that they were being taxed- the letters were incorrect and luckily, the companies had managed to act quickly enough to prevent any tax being deducted wrongly from payments.

However, one pension company said that hundreds of relatives of deceased customers’ had been taxed by mistake. This led industry experts to claim that this discovery could be the ‘tip of the iceberg’. Last week, some of the biggest pension companies’ such as Legal & General and Prudential said that they would not be disclosing whether some families had paid too much tax. In a bid to stop the issue before it goes any further, pension providers have been told to stop reporting death benefits to HMRC until the system error has been fixed. However, some providers issue the information automatically and are unable to stop it.

A spokesperson for the pensions provider Hargreaves Lansdown said that it is ‘critical’ to get the tax right, but it is unlikely to be just one provider who has been affected by the error. Similarly, the Chief Operating Officer for LV= said that they had heard from customers who had received an incorrect tax code from HMRC, but they were able to ensure that they weren’t affected by the error. Lastly, he said that the customers were already dealing with the loss of a loved one, so did not need to be dealing with tax issues too.

A representative from the Association of British Insurers said that they had informed HMRC it may be impossible for some providers to stop providing the information. He said that they had been working alongside HMRC to find a solution to the problem.

A spokesman from HMRC denied that anyone had been affected by incorrect tax. They said that individual pension providers are responsible for operating a PAYE system and are required to treat such payments as tax free.

For more information on inheritance tax, contact HMRC.

How the Social Fund Can Help You through the Cold Weather

The Social Fund UK

The Social fund can help those on a low income with certain expenses. During the winter months, it is no secret that heating in the British home is somewhat of a necessity, but that doesn’t stop it from costing an arm and a leg to fund. This is where the Social Fund helps. If you are entitled, funding will be provided for your heating that does not require repayment and will be paid into the same account that receives your benefit payments. The scheme was put in place on the 1st November 2015 and continued until the 31st March, where people were given £25 per week to help with their heating bills. The scheme is due to start again on the 1 November 2016, and plans to run for the same period of time.

How does it work?

It’s all very technical, but in a nutshell, it has to be cold, hence The Cold Weather Payment. Those that are entitled will have their postcode area linked to a weather station and payments are then made when there is going to be periods of cold weather. The requirements for the payment are when the weather station forecasts seven consecutive days with an average daily temp of 0 degrees Celsius (or less). This more than likely means that during the winter months, there are certainly people that will be entitled to the payment. There has, however, been some criticism of the scheme, because some areas of Britain may be cold enough to receive a payment that week, while others may not. For example, in some areas of Kent, it may be at or below zero for seven days, requiring payment, where in close by Sussex, there might be a day during the week that takes the average temperature to above zero, meaning that it is ‘too warm’ to require a payment. Just the luck of the draw.

Who is entitled?

If you currently claim income, universal credit or income based Jobseeker’s Allowance then it is likely that you will be entitled to the Cold Weather Payment, in the next winter. Before we go any further, it is worth noting that the payments are not to be confused with Winter Fuel Payments. These are also a type of funding but are made to people above state pension age – whatever the weather. Another thing worth noting is that the Cold Weather Payment is based purely on income, and not savings, and you don’t need to go through the hassle of putting in a claim.

Other weather based entitlements

It doesn’t just stop at funds for heating, and there are other schemes available to keep your house cosy. Financial assistance is also provided through something called the Warm Front Scheme. With this, the government have aimed to tackle fuel poverty by providing grants for loft insulation, draught-proofing, wall insulation, gas heaters, central heating and hot water tanks. This might be offered to those living in poorly insulated properties, with no central heating system.

If your energy bills are becoming unmanageable, or have left you struggling after the cold winter, there is also another aptly named programme in place; the Warm home Discount. This is where rebates are provided on already paid energy bills. 2014-15 saw homes that qualified receive a bill rebate of £140. Instead of just receiving this in cash, the rebate comes in the form of a discount and should contribute towards settling any existing bills.

Female Victims Of Pension Reform Could Turn To JSA

Women who are expected to lose out on thousands of pounds as a result of the Government’s changes to the pension age are being told to think about claiming Jobseeker’s Allowance instead, by a Conservative minister.

Shailesh Vara is a work and pensions minister. He suggested unemployment benefits as a possible source of income for the millions of women who will have to wait 18 months longer to receive pension entitlements, because the state pension age is increasing from 60 to 65 by 2018. The comments came shortly before a debate took place in Westminster, influenced by a petition of over 140,000. The Government made the pension reforms in 2011 and campaigners are saying that they are too rushed, failing to give working women enough time to plan for their retirement.

Research conducted on behalf of the Labour party found that over 2.5 million women who were born during the 1950’s will be affected by the reform. However, any form of compensation for these women has been ruled out. Mr Vara said the reform needs to be viewed ‘in a broader context’. He said to MPs that there were ‘a whole lot’ of other benefits available to women who are affected, such as Jobseeker’s Allowance, Employment and Support Allowance, Carer’s Allowance and Personal Independence Payments. He said that we should not forget that pensions will be uprated and that the new simplified State Pension starts from April. He also cited an increase in cold weather payments and protected winter fuel payments as a good thing for pensioners. All of these options contributed to the ‘broader context’ that Mr. Vara spoke of. shutterstock_326906771

The former work and pensions secretary said that Mr. Vara’s comments were ‘outrageous’, adding that women do not want unemployment benefits, they want the pension that they are entitled to. The shadow work and pensions minister Angela Rayner said that it was ‘shocking’ to suggest Job Seeker’s Allowance as an alternative. She added that by accelerating the rise in the female state pension age and not communicating the changes effectively, ‘millions of families’ feel as if their plans for their later life have been ‘ruined’. She said that the petition was a ‘testament of strength’ to the campaign.

The debate in Westminster Hall was led by the Labour MP Helen Jones who said that she was also of an age which would be affected by the pension reforms. However, a number of Conservative MPs also voiced their concerns and called for transitional relief for the women who were going to be affected.