Annuities, unemployment, property and fraud

The Treasury’s decision to abandon plans to let pensioners raise money by selling their annuities has been welcomed by the pensions industry.

The controversial idea was first aired in March 2015 by the then Chancellor George Osborne as part of his plan for ‘pension freedoms’. Despite deciding last December that the plan would go ahead next April, the Government has now changed its mind. The Government admitted that too many pensioners might be lured into selling their annuities – an income for life – in exchange for a lump sum. The Association of British Insurers (ABI) said it was the ‘right decision’. Meanwhile, Paul Green, director of communications at Saga, said: ‘This is a surprising announcement. The development of this kind of market was always going to be complex, and we await more detail about the consumer protections that the Government felt this market was unable to provide.’ In other news, changes to the state pension, rising inflation and concerns about meeting care costs top the list of income worries for people in the UK approaching and in retirement. According to the latest findings of the ‘The Golden Age of Retirement’ report by Aegon, these threats to income carry different weight depending on the age of the person.  Employment Employment rose by 106,000 in the three months to the end of August to almost 32 million, the highest since records began in 1971. The Office for National Statistic said the number of unemployment benefit claimants rose by 700 to 776,400 in September. Economists had expected the number of benefit claimants – which is considered to be a potential early warning sign of an economic downturn – to rise by 3,000. Total UK unemployment was 1.66 million between June and August. That is a rise of 10,000 in the three months to the end of August. However, ONS said that measuring regular pay against inflation showed that earnings rose at their slowest pace since February 2015. Average earnings are up 2.3 per year to August, 0.1 per cent down from previous month. Property Foxtons’ property sales have plunged by a third in just three months as London homeowners shy away from transactions in the wake of higher stamp duty rates and fears over the Brexit vote, The Telegraph reports. The estate agency, which blamed a profit warning in June on the EU referendum, said revenue from property sales dropped 34 per cent in the three months to September 30 to £12.2 million as it contended with lower transactions in the capital. Higher rates of stamp duty, announced by the former Chancellor George Osborne last year, took effect in April, adding a 3 per cent surcharge on second-home buyers and buy-to-let investors. Energy

Energy suppliers are hitting customers with price hikes of up to 30 per cent — just in time for winter, the Daily Mail reports.

GB Energy Supply is increasing its variable gas and electricity deal to £1,060 a year, up from £820 with effect from November 13. It’s the firm’s second price hike since the deal launched in January at a cost of £765 a year. The supplier has written to existing customers to give them 30 days’ notice. During this time you can switch to a new deal without paying any exit fee.

Pay Britain is on course for another pay squeeze next year, economists have warned after inflation jumped to a two-year high, according to The Times. Consumer prices grew by 1 per cent in September, up from 0.6 per cent a month earlier, hitting their highest level since November 2014, even before any impact from the falling pound is considered. ‘The figures suggest that the historically low inflation that has supported living standards over the last two years may not last much longer,’ Matt Whittaker, chief economist at the Resolution Foundation, said. Fraud

A quarter of current account holders have been victims of fraudulent activity, with the average scam stealing £828, according to research from uSwitch.com, the price comparison site.

Of those falling victim to current account fraud, one in five remain out of pocket following the bank’s investigation into the scam. And one in five believe the blame lies with their banks for failing to prevent the incident or not offering enough advice for customers to stop the attack themselves.

Contactless payments

A major investigation today exposes the alarming security flaws in contactless cards, according to the Daily Mail.

In controlled tests with experts, Money Mail discovered that criminals can swipe money off these cards as you’re walking down the street, sitting in a restaurant or browsing in shops. It discovered that crooks using card reading equipment can also steal information from your card that they can then use to steal your identity.

Fraud on these new bank cards — which you can use without entering your PIN — is currently rare. And if you do fall victim, your bank will typically refund you the full amount.

Funeral costs

The latest Royal London National Funeral Cost Index reveals funeral debt in the UK has risen to £147 million as people borrow from friends and family or the bank to fund the last wishes of loved ones.

Royal London’s research highlights that the average cost of a funeral in the UK is now £3,675, with 93,359 adults taking on funeral debt. The average debt being taken on to cover funeral costs is £1,601.

One in seven said they struggled with funeral costs. Among those who struggled, one in four said they borrowed money from family and friends or went into debt by taking out a loan or going into their overdraft to pay funeral costs.