Paul Lewis: September money news
Help is proposed for those waiting for state pensions, plus income tax, grandchild cash and new Buy Now Pay Later rules.
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Help is proposed for those waiting for state pensions, plus income tax, grandchild cash and new Buy Now Pay Later rules.
A committee of MPs believes action is needed to help people in their sixties on low incomes who face a delay of up to a year before they can claim a state pension. As the pension age rises over the next two years from 66 to 67, Parliament’s Work and Pensions Committee fears thousands will face poverty.
More than half in their mid-sixties are not in paid work and almost a quarter who are employed are in ill health. The committee wants Universal Credit (now £425 a month) to rise towards the level of pension credit, £1,031 a month, for 66-year-olds.
More babies are born in September than any other month – I blame Christmas! – so it’s a good time to point out that any grandchildren who reach 18 will have an average £2,200 sitting in a Child Trust Fund, if they have not already collected it.
The government has set up a task force to reunite 750,000 people aged 18-plus with £1.6 billion in these state-backed funds, which were started for every baby born between 1 September 2002 and 2 January 2011. Go to sharefound.org to track them down.
The amount you can earn before paying income tax has been frozen at £12,570 since 2021. If it had risen with inflation it should be around £16,000 this tax year. If it had tracked the state pension, it would be closer to £17,000. Unless that allowance rises next year, those only receiving the standard new state pension will have to pay some tax.
The new government says it will follow the former Chancellor's plan to exempt people from tax if their only income is that standard new state pension. It will be at least £12,862 a year from April. But it is not clear how it will be exempted if the tax allowance stays frozen. The new state pension will be at least £12,862 from April.
A growing number of older people use Buy Now Pay Later (BNPL) offers to pay for things over three or four months interest-free. In the middle of July, however, the rules changed and retailers must now assess a customer’s ability to pay before letting them ‘pay in three’.
That might make it harder to get. But for the first time, BNPL now has the same protection as a credit card – the lender must refund you if something goes wrong with the purchase.
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