Money digest: today’s need-to-know financial news | 21 March 2016

It’s been a turbulent few days for the Tory Party following a bitter row over £4 billion of cuts to benefits for the disabled, announced in the Budget last Wednesday, and the resignation of the work and pensions secretary. Today Iain Duncan Smith’s replacement will tell the Commons that the proposed changes to disability benefits – known as Personal Independence Payments (PIP) – have been abandoned. Opponents of the move said it could have affected up to 640,000 people, with recipients losing up to £100 a week. And there has been widespread criticism of the Chancellor’s decision to cut benefits to the vulnerable at the same time as announcing a rise in the higher rate tax threshold. The weekend press digested the raft of measures laid out in the Budget with many focusing on George Osborne’s unveiling of the Lifetime ISA – or LISA. Under the terms of the new product, anyone aged between 18 and 40 can open one, and any savings deposited into it before age 50 will receive a 25 per cent bonus from the government. The annual limit is £4,000 and the cash can be used towards a deposit on a first home worth up to £450,000 or to save for old age. From age 60 onwards, the savings are tax-free. Some experts have called it the ‘death of pensions’ while others say it is a ‘no-brainer’ for younger workers. Others believe it may encourage some young savers to opt of their employer’s workplace pension and miss out on free money. Meanwhile, a think tank has warned that more than 1.7 million self-employed workers will earn below the new National Living Wage when it comes into force in April. According to the Social Market Foundation’s research, the number will rise to 1.9 million by 2020. At present, the government’s national minimum wage is £6.70 per hour, but the National Living Wage for over-25s of £7.20 comes into effect in April. A new report from AXA Insurance suggests that more than 12 million nuisance calls are made in Britain every day as ‘ambulance-chasing lawyers’ tout for business. The insurer warned that premiums were rising because the calls encourage people to make false claims. The Times reported that about £90 of the cost of each car insurance policy goes towards paying compensation for whiplash, which hit a record figure last year. As a result, the government is considering banning cash payments and only allowing insurers to pay for physiotherapy instead.

Homeowners on the South Coast can pat themselves on the back following new figures showing that house prices have soared by nearly 500 per cent in Brighton and Hove in the past two decades. Average prices in the seaside city jumped from £50,000 in 1995 to £295,000 in 2015, according to the Office for National Statistics. Mortgage broker Andrew Montlake, of Coreco, put the desirability of Brighton down to improved commuter links to London, good schools and green spaces which have attracted families priced out of the capital.

If you’re considering tweeting Spectator Money Digest this morning, you may be interested to learn that the first ever tweet was sent ten years ago today. Jack Dorsey published the first Twitter message saying ‘just setting up my twttr’. The service launched in July of that year.