Spectator money

Grieving families face unexpected tax bills

Little-known rules regarding ‘death-in-service’ payouts from workplace pension schemes could see grieving families hit by shock five-figure tax bills. That’s according to Royal London which says millions of employees are at risk of exceeding the pension lifetime allowance because of their death-in-service benefits. As a result, it’s calling for a change in the rules. Many company pension schemes offer workers’ families a lump sum ‘death-in-service’ payment of up to four times the employee’s annual salary if they die while employed by the firm. But a little-known caveat of this payment is that it can count against the £1 million lifetime allowance limit for tax-relieved pension contributions. For example, say you

Dwindling pension funds plugged by workers’ wages

A decade ago, while working for a national newspaper, I forced the then Labour government to release documents under the Freedom of Information Act. The papers showed that Gordon Brown defied repeated warnings from his own officials about the potentially devastating impact of this £5 billion-a-year raid on pension funds and went ahead with it regardless. Brown announced the scrapping of tax relief on dividends paid into pension funds in his first Budget in 1997 at a time when many funds were in surplus. It was the single biggest change to the system in a generation. By the time my story was published, the country’s savers had been deprived of

Have you planned your digital legacy?

Going through a loved one’s photos, books, music collection and possessions after they’ve passed away can be an emotional process. But with any luck, the deceased will have left a will detailing what should happen to smaller possessions such as childhood toys and their record collection, as well as major assets like property or investments. But not many people think about what will happen to their digital assets when they die. We live our lives online these days and future generations won’t remember a time when this wasn’t the case. As well as using social media sites such as Facebook, Twitter and Instagram, we also buy digital music and video

The sun shines on retail sales

When the sun shineth…go shopping. That’s what we did in our droves during April, boosting retail sales by 4 per cent compared to the same month last year. According to the Office for National Statistics (ONS), anecdotal evidence from retailers suggests that good weather contributed to growth in sales, which increased by 2.3 per cent in the three months to April compared to a 1.4 per cent decline in the first quarter. And there’s the fact that Easter also fell in April this year, prompting sales of furniture, golf equipment and motorbike accessories. Analysts were cheered by the data, which was beyond their expectations, but said the real test lies ahead. Michael Baxter, economics commentator

Four ways to protect your finances on holiday

British families are forecast to spend £1,284.54 per person on this year’s summer holiday. That’s up more than £200 on what they forked out last year, says charitable shopping website Give as you Live. And with inflation gathering momentum and the pound still weak, many of us will feel we’re not getting a lot of bang for our buck when we finally get to our destinations. So it would be sensible to consider the simple steps you can take now to protect any money you’ve already spent on your trip – as well as what you’ll spend when you get there – to ensure you don’t end up paying out

Over-45s fear for retirement if the Tories reduce the state pension

With the news dominated by the political parties’ respective manifestos, there’s a lot of information to digest. At the time of writing, the Conservatives are attempting to demolish Labour’s economic pledges, the Lib Dems have pledged a second EU referendum, and the UK Independence Party is, well, who cares what UKIP is doing. At the heart of party policies for pensioners is the triple lock. This pension guarantee stipulates that the state pension will increase every year by the higher of inflation, average earnings or a minimum of 2.5 per cent. It’s an important element of pensions, and effectively protects pensioners from meaningless increases, such as the much-derided 75p a week

Families under further pressure as earnings growth slows

There’s more doom and gloom for households today as new figures reveal the first decline in real earnings since September 2014. According to the Office for National Statistics (ONS), earnings growth slowed in the three months to March, at 2.1 per cent, compared to previous data which showed wages, excluding bonuses, grew at 2.2 per cent. This compares to inflation which jumped to 2.7 per cent in April. Meanwhile, the unemployment rate dropped to 4.6 per cent in the three months to March, and is now at its lowest rate since 1975. It was previously 4.7 per cent. It means that 1.54 million people are currently unemployed. While some analysts say that the

There’s a shed-load of valuables in your garden, but are you insured?

Ah, Chelsea. Or in my case, ah, Tatton. It’s that time of year again when the Royal Horticultural Society revs up for its slew of annual flower shows, allowing us green-fingered enthusiasts the chance to seek out the lesser-spotted Titchmarsh and the perennially pleasing Monty Don. It’s also a good time to do an inventory of our own gardens, not least the garden shed. You might not know it, but that building at the bottom of the lawn could be harbouring a shed-load of uninsured valuables. While a fair few sheds are home to nothing more than old pots, bits of string and rusty shovels, many are full of items that thieves

Inflation at highest level since 2013

There’s bad news for households this morning following the news that inflation has soared to its highest level since September 2013. According to the Office for National Statistics (ONS), inflation is now at 2.7 per cent, up from 2.3 per cent in March. This is some way above the Bank of England’s stated 2 per cent goal. A number of factors contributed to the rise, but the main driver was higher air fares. This was largely because the timing of Easter pushed up the price of flights. In addition, tax changes in the Budget added to inflation as did rising costs of energy and clothing. Meanwhile, the retail price index (RPI)

House prices boosted by tram routes

In the wake of Friday’s international cyber attack, it was logical to assume that yesterday’s complete shutdown of the Manchester tram system was another casualty of malicious ransomware. But bosses at Metrolink say the closure was due to a technical fault in the control network and has now been resolved. For a city that has come to rely on its trams, any glitch is incredibly disruptive, not least because the bus network – to the north of Manchester at least – is a shambles. However, when the Met is working, it’s a convenient and efficient means of getting around, if a little pricey. And the multi-billion pound extension of what was

The Bank of Mum and Dad: should parents lend money to their adult children?

I don’t normally glean insights for my personal finance columns from police dramas on TV, honest. Recently, though, I caught up with series one of Line of Duty. One of the plotlines explored the middle-class money dilemma of our time: how much a good parent should shell out for their kids. A decent officer was corrupted, not through drink, drugs or gambling, but because he needed money for his daughters’ ruinous private school fees. This is not the kind of thing you can imagine happening to DCI Gene Hunt or Dirty Harry. But then, back in the Life on Mars 1970s, parenting wasn’t even a verb, let alone a competitive

Got a grievance? Then make sure you complain online

All publicity is good publicity, right? Wrong. The United Airlines controversy last month showed just how quickly poor crisis management can decimate company shares. And we financial journalists know as soon as we mention our job titles when making a customer complaint, we usually receive a positive outcome, such is the corporate terror triggered by a whiff of bad press. But now the internet is making it possible for anyone to kick up a stink in a most public fashion. Recent research from comparison site Gocompare found that UK companies have paid out £65 million in compensation to customers who took to social media to complain about services and products.

Record fine for one of Britain’s worst cold callers

I am immensely cheered by the news that one of the worst perpetrators of cold calling has been fined a record amount for making almost 100 million nuisance calls. The Information Commissioner’s Office (ICO) has issued its highest ever penalty of £400,000 to Keurboom Communications after more than 1,000 people complained about recorded – also known as automated – calls. The calls, made over an 18 month period, related to a wide range of subjects, including all the old chestnuts of road traffic accident claims and PPI compensation. Some people received repeat calls, sometimes on the same day and during unsociable hours. The company also hid its identity, making it harder

Budgeting will save you money and might even make you happier

How much money do you have in your current account right now? What date do you pay your electricity bill? What was your most recent purchase? Can you remember exactly how much you spent? What do you spend more on each month – food or drink? Not many people can answer these questions correctly without first dissecting their latest bank statement. In fact, almost a fifth of us (17 per cent) admit to having no idea or only a rough idea about the state of our finances, according to research from insurance company SunLife. And younger people put the older generations to shame, with those aged 18 to 24 some

Water, water everywhere: we spend £707 million a year fixing damage caused by our neighbours

As I watched the water creep across the kitchen floor, powerless to prevent a mini tsunami, I had an inkling of how it must feel to be the victim of flooding or burst pipes. By the third time the water invaded my kitchen, I was at the end of my tether. It later transpired that the base of my washing machine had broken in two (apparently not an uncommon occurrence) hence the folly of replacing the washers and hoping for the best. While this was a problem fixable with a mop, a packet of kitchen roll and a new appliance, it brought to mind the multitude of horror stories told

Make your spending money go further when travelling abroad

Anyone with a trip on the horizon is likely to make a checklist of essentials to pack, but what about spending money? Holiday cash is often last on the list even though leaving it to the last minute can be a costly mistake. Not only could you miss out on a decent exchange rate, but taking only a little cash abroad may mean having to resort to a debit or credit card when funds dry up – with all the fees that entails. Less cash to spend abroad due to exchange rates Holidaymakers could be in for a shock when they realise their travel cash will not go as far as

Can money buy happiness? The internet trolls think so

Aaron Lennon. Prince Harry. Jayne-Anne Gadhia, chief executive of Virgin Money. Each of these high profile people’s mental health has been in the spotlight in recent weeks and, thankfully, most of the public response has been sympathetic. But each has also faced a dark undercurrent of criticism that they’re not entitled to struggle with their mental health because they’re rich. The most prominent example was the coverage of footballer Aaron Lennon’s detention under the Mental Health Act. Some newspapers thought it fair to headline on his £55,000-a-week income, as if this ought to have made him immune to mental illness. But it wasn’t just the news media who told this

How do you solve a problem like the pensions system? Spectator Money has a solution

What should be done to our muddled and over-complicated pensions system? We (our politicians, that is) have created a pensions monstrosity that even hardened actuaries now fear and struggle to comprehend. The question I raise is one all the main political parties will provide their thoughts on as we painstakingly move towards June 8 when, barring a miracle, Theresa May and her Conservative Party will triumph spectacularly. The manifestoes have yet to be published – not that their contents are to be trusted – but it is quite obvious that both Labour and the Conservatives are keen to meddle even more with our pensions. Not for our greater benefit, mind

How to avoid being duped by investment scammers

For every hard-working individual who has built up a pension pot to fund their retirement, there is a criminal trying to scam their way into stealing some of it for themselves. Pension funds are often the second largest source of wealth behind home purchases and, as a result, are a tempting target. Sadly, scams are not new to pensions. These are two of the most common forms. Pension liberation The victim is under the minimum age at which benefits can be drawn legitimately (age 55) and is promised access to their funds early, albeit subject to hefty charges. Investment scam The unsuspecting target is persuaded that current, legitimate, regulated pensions

Do we trust politicians to solve our financial problems? Of course not

Do we trust politicians? Is that the same as asking if we trust estate agents, door-to-door salesmen or, er, journalists? According to new research by Comparethemarket.com, consumers overwhelmingly believe that the main political parties and their leaders do not understand the financial anxieties of ordinary people and that the next government will not have the ability to introduce measures to improve their financial situation. The research, based on a poll of more than 6,000 UK adults, found that more than a third of people feel worse off compared to the last election in May 2015. Almost nine in ten respondents believe that this is the fault of policies implemented by