George Osborne’s pension reforms will backfire and end up costing the taxpayer billions of pounds more every year as people stop saving for their retirement, the official Treasury watchdog has warned.
The Telegraph reports that the Office for Budget Responsibility said the removal of tax relief on pensions for higher earners – billed as a move to save money – will ultimately end up costing the Exchequer £5 billion a year.
The watchdog warned that higher earners will move their money to tax efficient investments and may even drive up property prices as a result of the ill-thought through policy.
Meanwhile, The Times reports that younger workers could be in line for a boost to their pensions at the expense of older employees under plans being considered by the Treasury.
Tax breaks to encourage people to save for their old age will be reshaped to favour the millennial generation crippled by student debts and runaway house prices, it is understood.
Whitehall officials believe the UK may need to make big payments to the EU to secure preferential trading terms after Brexit, according to BBC Newsnight.
During the EU referendum, Vote Leave claimed leaving the EU could save the UK £350 million a week in contributions. But an unnamed cabinet minister has told Newsnight that the UK may end up ‘paying quite a lot’ of that money to secure access to the single market.
The Government said it would not give a ‘running commentary’ on negotiations.
Banks are trying to claw back PPI compensation paid years ago to victims of the £25 billion mis-selling scandal, according to the Daily Mail.
Customers are receiving shock bills for thousands of pounds because banks wrongly calculated their payment protection insurance payouts. They are demanding customers hand back up to £15,000 as many as four years after the original payout was made.
Stepchange Debt Charity has today released results from a new survey showing that almost two thirds of people seeking its help with overdraft debts have regularly exceeded their limit and faced charges of £45 each time on average.
Commenting on the findings of the survey, Rachel Reeves MP for Leeds West and Member of the Treasury Select Committee, said: ‘Today’s survey from StepChange Debt Charity makes it crystal clear that those who are struggling with debt are having to use their overdrafts to keep up – and their situations are being made worse by having to pay an extra £225 on average for falling into unauthorised overdrafts. These are people who are already in difficulty, trying to manage debt day to day. The banks should help them to manage their finances to get out of the cycle of debt, rather than pushing these people deeper into crisis with extortionate charges.’
More than a million landlords plan to hike their rents next year to beat an imminent tax crackdown, the Daily Mail reports.
From April next year, buy-to-let investors will see the tax relief on their mortgage interest cut from a maximum 45 per cent to just 20 per cent. The changes will be phased in over the next five years and threaten to make buy-to-let properties less profitable for those with a mortgage.
London house prices were down 2.5 per cent in third quarter, Halifax said this morning.
Meanwhile, the Council of Mortgage Lenders reports that August house purchase lending was up 11 per cent compared to a year ago. The CML said that homeowners borrowed £12.2 billion for house purchase, up 14 per cent month-on-month. They took out 66,000 loans, up 13 per cent on July and 9 per cent on August 2015.
There are currently 14.53 million women in work in the UK, the joint highest level since records began in 1971. The growing importance of the female workforce is highlighted in new research from Aegon which finds two in five women are now the main breadwinners in their households.
Aegon’s ‘Protection Matters’ report finds that this is higher still among women in more senior roles, with more than half in senior managerial positions and three in five female directors providing the main source of income for the family. The position of female business owners is not dissimilar with more than a third as the household’s main earner.
One in six families who have applied for a mortgage in the last ten years say they’ve been turned down or offered a lower loan because of their childcare costs, according to uSwitch.com, the price comparison site and switching service.
Following the Mortgage Market Review in April 2014 and the introduction of stricter mortgage eligibility criteria, many lenders now take childcare costs into consideration as part of their affordability assessment. But, as childcare costs have risen 38 per cent in the past five years, more than two thirds of the families affected say they have had to hide the true cost from lenders in an attempt to secure a better deal.
Brexit means the Government will miss its target of a £9 per hour minimum wage by 2020, a think tank has warned.
Low-paid workers are set to lose about 40p per hour from their pay packets as a result of the projected slowdown in economic growth, according to the Resolution Foundation.
The reduction in the planned rise in the national living wage is likely to be seen as soon as next month, when the chancellor, Philip Hammond, announces the increase from April 2017. The Government had intended the wage floor for workers aged 25 and over to rise from £7.20 to £7.60 per hour, but it is now on course to rise only to £7.50, Resolution said.