Weekly Money: the news stories that we noticed 1 to 5 February

The personal finance stories you may have missed this week

Jamie Vardy scored a thundering goal this week, but saving should be your aim (GETTY IMAGES)

5 February

Thousands of vulnerable people are being left to struggle with debt problems alone, warns PayPlan. It’s calling on creditors to offer greater protection to those who are classed as being vulnerable.

The debt adviser says there should be more help for those with mental health issues, physical disabilities, poor literacy skills, victims of domestic violence and people who have been recently bereaved.

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There’s help available to households struggling with fuel poverty but many are not aware of the help, while organisations often struggle to track down those who need it.

A Facebook community project called Fuelling Connections hopes to change that by offering support for those who are finding it difficult to pay their heating bills. The charity Hubbub is launching groups in three fuel poverty hotspots: Tower Hamlets, Doncaster and Truro and Falmouth.

Labour MP Caroline Flint said: “Every week families are struggling to meet fuel bills. This Facebook community should be a melting pot of great ideas, connections and advice to help cut those bills.”

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George Osborne is thought to be considering replacing pension tax relief with a pensions Isa. But such a move could be disastrous, says former Pensions Minister Steve Webb. now director of policy for Royal London.

“It would raise large sums for the Chancellor, but the damage done to pension saving would be incalculable, as pensions are once again seen as a convenient pot for cash-strapped Chancellors,” Mr Webb said.

Yvonne Braun of the Association of British Insurers, also slammed the proposal. “A Pensions Isa would be a big mistake which risks putting people off saving,” she said.

4 February

Age UK is being investigated by energy watchdog Ofgem over claims that it promoted unfavourable energy deals to the elderly for cash.

The Sun alleged that the charity accepted £6m a year from E.On to "push expensive targets to the elderly". It claimed that the E.on rate promoted by Age UK saw pensioners pay £1,049 for a year's fuel - £245 more than on E.on's cheapest rate.

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Water companies have been told to make sure that hard-up customers are given the help they need. The Consumer Council for Water said firms must improve the way they deal with people struggling to pay bills.

Yesterday Water UK revealed that the average water and sewerage bill in England and Wales will rise by £2 to £389 in 2016/17. That may be a small increase but it will still hit low-income households struggling to afford bills, said Tony Smith, chief executive of CCWater.

“Our research shows that one in eight customers in England and Wales are already finding it difficult to afford their water bill,” he said. The Watchdog wants water companies to do more to ensure that customers who are struggling or unable to pay their bill get the help they need, such as by raising awareness of social tariffs and other assistance schemes.

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House prices in the UK are nearly 10 per cent higher than they were a year ago, according to Halifax.

Prices in the three months to January were 9.7 per cent higher than a year earlier. Average house prices have increased 1.7 percent since December to £212,430.

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Planning to retire this year? You’re likely to leave work with £3,000 less debt than last year’s retirees, reckons Prudential. But one in five people are still likely to be in the red when they retire, a figure that’s remained constant for five years.

They’ll owe £18,800 on average, compared to last year’s typical debt of £21,800. Debtors expect to take three-and-a-half years to pay off the money they owe – and debt repayments cost them on average £224 a month.

Just over half of 2016 retirees in debt owe money on credit cards while a third still has a mortgage.

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The TUC will today call for a better pensions deal for women. TUC assistant general secretary Kay Carberry will tell its annual pensions conference: “We need urgent reform to ensure that pensions are for all people – not merely the preserve of men in traditional full-time work.”

3 February

Scottish Power has become the latest of the Big Six energy companies to announce a cut its standard domestic gas prices. It will reduce costs by 5.4 per cent from 15 March, to cut £32 off an average bill.

Last week SSE said it will lower gas tariffs by 5.3 per cent at the end of March, while E.on’s 5.1 per cent came into effect on Monday 1 February. A similar reduction from British gas took effect last summer.

“Even after these cuts the vast majority of households in the UK will be massively overpaying for their energy,” warned Martin Lewis of MoneySavingExpert.

Anyone on a standard tariff will be paying at least £1,050 a year after the cuts, while the market’s cheapest tariffs are now less than £770.

In fact last week GB Energy Supply cut its variable and fixed dual fuel energy tariffs to £765 a year, which is currently the lowest rate on the market.

In other changes this week First Utility launched a new one-year fixed tariff at £783 per year for a typical usage dual fuel household. Meanwhile Flow Energy launched a new fixed rate Connect5 tariff at £871 a year aimed at customer with single rate or Economy 7 electricity.

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People struggling with debt should be given a ‘breathing space’, so they can still afford to heat their homes and feed their families. Debt charity StepChange said people who seek advice for debt problems should have interest and charges frozen for up to a year to give them time to get advice and sort out their finances. Debt collection should also be put on hold.

“Struggling people deserve help and support to allow them and their families to get back on their feet,” said Mike O’Connor of StepChange.

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When do you expect to be debt-free? It’s probably going to be later than you think. People expect to be clear of debts by 57, reckons the Centre for Economics and Business Research. In reality, they are likely to be 69.

2 February

High cost lenders will face a new levy to fund a crackdown on illegal loan sharks, the Chancellor has announced. The City Watchdog will be given powers to impose the levy and will consult on which consumer credit companies will be hit, but it is likely to include payday lenders and credit card companies.

The revenue raised will fund the work of UK illegal money lending enforcement teams from 2017/18. Last year its work was funded by government and resulted in 108 arrests and charges against 43 people.

“I am absolutely determined to protect customers from abuse and sharp practice in the consumer credit market,” Chancellor George Osborne said last night.

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The number of people defaulting on debt will rise by 17 per cent by 2020, says Arrow Global. It predicts 700,000 will default in the next four years as borrowing and interest rates rise.

Joanna Elson of the Money Advice Trust, said: “The analysis confirms the significant rise in debt problems that we are expecting to see over the next few years. Rising consumer credit is to be expected in a recovering economy, and a future rise in interest rates will compound these problems.”

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More than a quarter of people “live for the day” when it comes to their finances and half sometimes run out of money at the end of the month.

The figures are published in a new report today by Citizens Advice. It warns that, crucially, people don’t seek money advice until they reach a crisis point, such as being unable to afford debt repayments.

The charity says money advice should be “preventative” and target people going through major changes in their lives to help them avoid rather than respond to financial difficulties.

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Some 870,000 people failed to file their tax returns by Sunday's deadline. It means HMRC will pocket an extra £87m in fines at £100 a head. Meanwhile 9.24 million people completed their self-assessment forms online, a record.

1 February

A third of older people are worried about the cost of heating their homes this winter, a charity has warned. One older person dies every seven minutes from the cold every winter in the UK, said Age UK.

Last winter, 40,800 older people in England and Wales died unnecessarily from cold-related conditions such as heart attacks and strokes. But the charity said many of the deaths would have been prevented if the UK’s housing stock had been properly insulated.

“The Government must be far more ambitious about tackling fuel poverty by introducing a comprehensive energy efficiency programme to help those who are most at risk,” said Age UK’s, Caroline Abrahams.

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Do you use mobile phone company Three? Check your tariff: it’s doubling the price of some customers’ monthly bills. Those on the £17 All You Can Eat tariff have been told they will be automatically switched to deals priced at £30. Angry customers have been given 30 days to choose another deal or cancel the contract.

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Did you miss the tax return deadline yesterday? Consider an appeal if you had a reasonable excuse for not filing on time, say tax campaigners.

The Low Incomes Tax Reform Group said people may feel panicked by penalty notices from HMRC and just pay fines without realising that they may have reasons that may make them eligible for special treatment.

Reasonable excuses for filing a tax return late include flooding or severe weather problems, or life events such as serious illness or bereavement, and other causes beyond the taxpayer’s control. However it’s crucial that even if a reasonable excuse is established, a taxpayer files without delay once the excuse has ceased to avoid penalties.