Friday, 5 December 2014


A million low income pensioners will get a rise in their state pension benefits of just 87p a week in April 2015. That is less than a third of the £2.85 a week increase in the basic state pension. Six hundred thousand pensioners who are married or live as a couple will do even worse, typically with an increase of just 60p each.

The increase for these poorer pensioners in their state pension benefits is 0.68%. Lower than the 2.5% increase in the basic state pension. Lower than the 1.2% increase in most disability benefits. And lower than the 1% rise in working age benefits and child benefit.

So they will be getting the lowest percentage rise and one of the lowest cash rises of any of the benefit changes which begin in the week of 6 April 2015.

Who gets the 87p rise?
The 1.6 million pensioners who will get the very small rise in their pensions have a low income. They get that topped up by a benefit called pension credit. That comes in two parts. The guarantee credit which tops up income to £148.35 a week for a single person. And a savings credit which adds a bit more this year for any single person aged 65 or more who has an income between £120.35 and £190.35. It is that middle group on savings credit who will get this low rise usually of 87p. For couples the income figures are higher – £192 and £278.25 – and the typical rise is £1.20 between them, 60p each.

The arithmetic
Mary is 68. She worked all her life and gets a full state pension of £113.10. She also gets another £40 a week from an annuity she bought with a small pension pot she paid into. So this year her income is £153.10. That is topped up by £14.90 pension credit savings credit making a total of £168.00 a week.

From April her basic state pension will rise by £2.85 to £115.95. Her annuity will remain at £40. And her savings credit will be cut by £1.98 to just £12.82. So her total income will be £168.87. An increase of 87p and a rise in her total income of just 0.52%.

In summary, this group will get a rise in the basic state pension of £2.85 but their pension credit will be cut by £1.98, leaving them with a net rise of just 87p, an increase of around 0.5% in their income.

The 87p rise will apply to everyone with a full basic state pension and a fixed income on top of it from £10.55 to £72.30. In other words those with incomes before pension credit of between £126.50 and £188.25. Others with incomes slightly lower and slightly higher than that will get a bit more. And those with an income below £123.20 and above £190.35 will get the full £2.85 rise. So the very poorest and those who are better off – including the very well off – will get the full £2.85 rise in their state pension. It is just the 1.6 million in this band of income who will get the restricted rise as the left hand of the DWP pays them another £2.85 and the right hand takes away £1.98. Leaving the small change of 87p. They are poor but not the poorest.

Why is it happening?
It is happening because the Government is cutting savings credit. It will not be paid at all to anyone who reaches state pension age from 6 April 2016. And for those currently getting it the amount they are paid is being squeezed down year by year. This year the maximum savings credit that can be paid is £16.80. From April that maximum will be cut to £14.82. It was £20.52 in April 2010. Since then the basic state pension has risen 19% from £97.65 to £115.95 while the maximum savings credit has fallen by 28%.

What about the triple lock?
The Government is committed to the so-called ‘triple lock’ for rises in the basic state pension. This means it will rise each year in line with earnings, prices, or 2.5% whichever is the highest. Earnings are rising by less than 1%, prices by 1.2%, so the 2.5% rise is applied raising the basic state pension of £113.10 a week to £115.95 from April. But this triple lock only applies to the basic pension. It does not apply to other parts of the state pension which will rise with prices by 1.2%. And it does not apply to pension credit at all. Both the Conservatives and the Liberal Democrats have promised to keep the triple lock for the next Parliament if they are in power.

Didn’t Labour get into trouble over a small pension rise?
In April 2000 the basic state pension went up by just 75p – from £66.75 to £67.50. That rise was announced in November 1999 and made bad headlines across the press. The pension increase was in line with the rules, rising by 1.1% which was the inflation rate in September 1999. However, the political damage was so great that an early version of the triple lock was put in place by Gordon Brown, guaranteeing that the state pension would rise by at least 2.5% even if prices rose by less than that.

Government defends
The Government justifies this shift as protecting the poorest by ensuring they get the full £2.85 a week rise in the guarantee credit which other wealthier pensioners get. But to pay for that policy the nearly poorest band pensioners are being squeezed. This year the squeeze is particularly hard because under the standard formula for pension credit the guarantee credit would only rise in line with earnings by 0.6% or 89p. In order to raise it by £2.85 the savings credit is being cut by £1.98.

When presenting the pension rise in the House of Commons on 4 December 2014, Pension Minister Steve Webb glossed over the change in these words. 

"resources needed to pay the above-earnings increase to the standard minimum guarantee will be found by increasing the savings credit threshold, meaning that those with higher levels of income may see less of an increase than they would otherwise have done."

Nowhere does he mention the 87p rise. But in a hostage to fortune he does say 

"we will not repeat the mistakes of the past such as the 75p rise in 2000."

Departmental comment
The Department for Work and Pensions responded to this story by saying “Your analysis is correct” and then gave this statement

“In order to protect the poorest pensioners, the Government has again taken the decision to raise the standard minimum guarantee for Pension Credit in line with the cash rise in the basic State Pension.

“The cost of this measure is being offset by an increase in the Savings Credit threshold. In the current economic climate the Government believes it is right to target resources to protect the income of our poorest pensioners.”

Because all circumstances are different the rise for any particular pensioner or couple will be individually worked out and may be different from the amounts quoted here. They are typical amounts and will apply to most of those affected.

version 1.01
19 December 2014


Tuesday, 25 November 2014


If you pay for goods or services by credit or debit card or by a prepaid card you have clear rights to get your money back if anything goes wrong. So it is always safer to pay by plastic and you should always do so if you can. With a credit card you have two separate rights.

Legal right
If you pay by credit card for an item which costs more than £100 and up to £30,000 then the credit card provider has a joint legal liability with the retailer for the goods or services you buy. If the product or service goes wrong you can claim the full cost back from the credit card provider. 

For example, you pay for a holiday or flight and the firm goes bust. Or you buy clothes online and they do not arrive. Or you purchase an electronic device which stops working after a week. Or you pay for an online service which is a fraud. In all those cases you can use your legal right to get your money back from your credit card provider. 

The legal right covers purchases made anywhere in the world – whether you are buying in person abroad, or you pay online or by phone. Note the price limit applies to each item not the total amount of the bill. So two items of £80 each bought at the same time are not covered but one item of £160 is.

It is called your ‘section 75’ (or s.75) right because it comes from that section of the Consumer Credit Act 1974.

Of course, it is usually best to go first to the retailer or supplier to get your money back. But if they refuse or have disappeared or gone bust then the credit card provider must refund the whole cost.

Even if you just pay for part of the purchase on a credit card and the rest in some other way s.75 covers you for the whole purchase price if that falls within the limits. So if you buy a £750 sofa and pay a 10% deposit of £75 on a credit card and then you pay the balance in cash, you can claim a refund of the whole amount from your credit card provider if the sofa doesn’t arrive or is faulty.

There is no time limit on making a s.75 claim but it is always best to make a claim as soon as possible. If the purchase was more than six years ago you may find it more difficult as that is the normal limit on legal claims.

Section 75 rights apply to every credit card – Visa, MasterCard, or American Express (credit cards but not its charge cards).

Contract right
If you pay by debit card, credit card, or prepaid card you have a separate right to get your money back called chargeback. It is part of the contract between Visa, MasterCard, or American Express and the bank or firm that provides the card. Chargeback generally has no upper or lower limits, but MasterCard won’t consider claims for items that cost less than £10. Chargeback is most useful for plastic card purchases not covered by s.75. It does not apply to American Express charge cards but American Express credit cards are covered by it (and, of course, they are covered by s.75).

Chargeback covers the same problems as s.75 – goods that are defective, do not arrive, are fraudulent, or where the firm goes bust.

There are time limits for claiming which are quite complex. Normally you have to claim within 120 days – about four months – of realising something has gone wrong. But there is also an absolute time limit of 540 days which is about 18 months. So claim as soon as you know something has gone wrong.

The chargeback procedure involves your bank going to the bank of the supplier and trying to recover money from them. But even if the supplier’s bank refuses that does not affect your right to be repaid by your bank or card provider. Some guides suggest it depends on the firm you paid agreeing to refund the bank or card provider. That is not true. Although it is not a right under a legal provision, it is an absolute right guaranteed by Visa, MasterCard, or American Express and their contracts with the card providers.

Many banks and card providers misunderstand chargeback and frontline staff may well say that you cannot recover your money or they must wait for the provider to refund them. If the product has failed or not arrived they are wrong.

How to claim
Write to your bank or card provider setting out the details of what has happened and say you are claiming a full refund under s.75 of the Consumer Credit Act or under the chargeback procedure. In your initial letter always say that if you do not get a satisfactory response within eight weeks you will take the claim to the Financial Ombudsman Service. That tends to concentrate the mind. If the claim is refused or not resolved within eight weeks then do take it to the FinancialOmbudsman Service. Normally a claim to the Ombudsman costs the financial firm £550. It is free to you. The Ombudsman upholds most of the claims that reach it. You must go to the Ombudsman within six months after receiving a final refusal from the card provider.

Not covered
Section 75 and chargeback apply when the item you purchased is faulty, goes wrong, doesn’t turn up, or was fraudulent. They do not apply if you change your mind. However, if you buy online or over the phone you have an absolute right to reject the item as long as you tell the supplier within 14 days.

Sunday, 23 November 2014


More than 3000 charities distribute £288 million pounds in grants to individuals in financial hardship every year. And yet these grants are little known and hard to find.

Some give money nationally, others just to people in particular parts of the country. Some concentrate on those in a particular job - or retired from it - others to those with a particular medical need.

The charity Elizabeth Finn Care has held a database of them for some years and this week launched its improved Turn2us Grants Search to help people find the right charity to apply to.

For example a 45 year old woman with a Glasgow postcode can access 88 separate charities which will help with living costs, electricity or gas bills, career training, meeting an emergency, education costs and many other needs.

A 70 year old man living in Somerset can access grants from 73 different charities. And if he had worked in insurance another five pop up. Adding conditions such as occupation, health, religion, or family situation brings up more charities as many operate nationally to cover particular categories of people.

A whole range of disability and illnesses are catered for as well as twenty religions and family circumstances such as adopted, estranged, orphaned or pregnant.

Just about every occupation is covered in the national database, from accountants to writers, farmers to teachers, pawnbrokers to librarians. Among the 3000 charities there is a possibility for anyone in financial hardship to apply.

Turn2us says that people who have used the search have gained £2400 a year in income or more than £550 in one off grants. It also said that two out of three of those visiting Turn2us had not known about charitable help before and a third had been struggling financial for more than a year before finding help.

Apart from the grant search Turn2us also offers information about state benefits and a calculator to work out entitlement. And there are other resources to help people in need and those who work with them on the Turn2us website.

Wednesday, 19 November 2014



A payment of £200 appeared in my bank account last week. I'm a freelance journalist so in itself that is not so unusual. But this payment wasn't a fee for work. Nor was it a payment for something I'd sold. Nor a gift from a kind friend. Unless you count Secretary of State Damian Green MP as a friend. Because Damian's Department for Work and Pensions sent me £200 tax free this week just because I was born before 6 May 1953.

The Winter Fuel Payment was introduced by Gordon Brown in 1997. It was £20 then and was increased in successive years by Gordon and then Alistair Darling to reach £250 in winter 2008. The final £50 – technically an addition to the £200 payment – was taken away for winter 2011 by the Coalition Government. That was one of its first austerity measures and one of the very few that have affected pensioners. Since then the Winter Fuel Payment has been (ahem) frozen at £200 per household and £300 if one person in the home is at least 80 (technically born before 26 September 1936). Its purpose is to help old folk with the cost of keeping warm in the winter.

Although free money is always nice, I don't need it. I haven't been worried, as many people are, about the cost of heating my home when it gets cold. And because it is tax (and NI) free and I am lucky enough to earn enough to pay higher rate tax it is worth the same to me as earning £344.83. So thank you Gordon for inventing it and Damian for continuing to pay it.

I am not sending it back. Nor am I giving it to Age UK or any other charity which helps people over a certain age cope with their heating bills. I prefer to concentrate what charitable giving I do on homeless people, especially young ones. By gift-aiding this tax free payment it will be worth £250 when it reaches the charity after Chancellor Philip Hammond kindly adds £50. In fact I will give £267 so the charity will get £334 and when I settle my self-assessment tax bill and claim higher rate tax relief it will have cost me just 25p.

So thank you Damian and Philip for giving me a bit more money to help the growing number of people left destitute by your sanctions (taking their benefit away if they fail to jump through all the JobCentre hoops). Left unhoused by councils whose government grants you have cut. Left paying a growing amount of their council tax even though their income is at poverty levels. Left paying a bigger and bigger share of their rent however low their income. Freezing their benefits last April, next April all the way through to 2020. And left with nothing by employers who want them to turn up as and when there is a bit of minimum wage work to do and go away unpaid if there is none, because your Government - like the last - has not legislated to end zero hours contracts.

Happy Christmas

4 December 2016

Saturday, 1 November 2014


UPDATED 29 May 2017

If you were on a flight that arrived at least three hours late any time in the last six years you may be able to claim compensation of between €250 (£220) and €600 (£525) for each person affected. These amounts are fixed in euros and the fall in the  value of Sterling after the vote to leave the EU means they are worth considerably more than a year ago. These prices are as at 11 October 2016.

Similar rules apply to cancellations at the airport or within seven days before the flight was due to leave If you are given a replacement flight you will normally still be entitled to compensation if that arrives more than two hours later than the original flight - or departs earlier more than one hour earlier than the original flight.

These rules will continue to apply until the date the UK actually leaves the EU which is not expected until sometime in March 2019. The Government has promised a Bill to re-enact all EU law as UK law but that may or may not include flight compensation rights. We will not see the Bill until May 2017. If this EU Directive and case law ceases to apply in the UK the rules will still apply to flights from the EU to the UK on any airline and to flights from the UK to the EU on an EU based airline. 

The rules now
Three years ago the Supreme Court cleared the way for hundreds of thousands of compensation claims for delayed flights. On Friday 31 October 2014 it refused to hear further appeals by two airlines against earlier judgments saying they had no arguable case or that the law was already settled. 

Some airlines still tried to evade their responsibilities but on 17 September 2015 the European Court of Justice closed a loophole some had been trying to use.

Those judgments mean the law is now clear. 

Technical issues
First, airlines can no longer use technical issues including mechanical failure as an excuse for not paying compensation. The European Regulation EC 261/2004, which makes the compensation rules, gives airlines a get out clause for what are called ‘extraordinary circumstances’. In other words if the delay is absolutely not the airline's fault then compensation is not due. See 'Exceptions' below.

Many airlines have been calling technical issues with their aeroplanes extraordinary circumstances and refusing to pay compensation for the delays they cause.

But in June 2014 in a clear and unanimous judgment the Court of Appeal decided in a case against budget airline Jet2 that technical issues were part and parcel of running an airline and that the delays they caused could in no sense be ‘extraordinary’.

Jet2 tried to get the Supreme Court to look at that decision. But it refused to do so. The judgement releases tens of thousands of claims against many different airlines which have been held pending the court case. And any fresh claims for delay compensation because of technical issues such as mechanical failure should be successful. One law firm estimates more than two million passengers a year are delayed due to technical issues.

Some airlines tried to claim that unexpected or hidden technical defects were extraordinary circumstances. But in its landmark case in September 2015, van der Lans v KLM, the European Court of Justice ruled that such unforeseen defects could only be allowed as exceptional if they were, for example, a defect the manufacturer or a regulatory body discovered and announced. Anything else was just a normal part of running a complex system like an airline.

Back six years
The second important decision by the Court of Appeal was in a case against Thomson Airways. It ruled that cases for compensation for delay could go back six years rather than two. Thomson had been refusing claims which were more than two years old on the grounds that the Montreal Convention only allowed claims for that period. But the Court of Appeal decided unanimously that local law prevails so claims can go back for six years in England and Wales. The six year limit applies in Northern Ireland but it is only five years in Scotland. See section Jurisdiction below.

Thomson also tried to get the Supreme Court to revisit that decision. And again the Court refused saying the airline had no arguable case. So all airlines must now allow compensation claims for delays that occurred up to six years ago.

A further case Goel & Trivedi v Ryanair was tried in Manchester in August 2015. Ryanair claims that a provision in its own terms and conditions limits claims to two years which overrides the EU Directive. Ryanair lost the case but is appealing. It is possible that Ryanair and other airlines may try to delay claims for delays between two and six years ago until this case is finally settled. However, in a statement in September 2015 Ryanair said it did allow claims up to six year, though there is a lot of evidence that it does not.

The EU Directive on compensation applies to flights 
  • which leave UK airports (or any EU airport) with any airline 
  • which arrive at a UK (or an EU) airport on an EU carrier. 
So all flights from UK airports are covered and so are most flights to UK airports. For example, a Qantas flight from Heathrow to Sydney would be covered; a Quantas flight arriving at Heathrow from Australia would not, but a BA flight from Sydney to Heathrow would be covered. 

The delay must be at least three hours and that is measured at the arrival airport. So a flight that leaves more than three hours late but makes up the time and arrives 2h59m late would not be covered. The arrival time was recently defined by the European Court of Justice as the moment when at least one of the aircraft doors is opened at the arrival airport.

The Directive covers cancellation. But the courts have interpreted the law so a delay of at least three hours is considered to be the same as a cancellation and give rights to compensation.

How much
Compensation for delay is on a sliding scale depending on distance and the length of the delay – a qualifying delay on a UK to Alicante flight for example would pay €400 (£360) per passenger. 

Flight distance
Length of delay
Up to 1500km
3 hours or more
€ 250
more than 1500km up to 3500km
3 hours or more
€ 400
More than 1500km between two EU states
3 hours or more
€ 400
More than 3500km - one airport outside the EU
{3 hours but less than {4 hours
€ 300
{4 hours or more
€ 600

*Compensation is specified in euros. Sterling amount is approximate and will vary; rates at 29 May 2017

Remember, these amounts are per paying passenger. So for a family of four they are four times as much. In many cases the compensation is more than the fare for the flight.

Compensation for cancellation is more complex but similar. If your flight has been cancelled within seven days before the original flight time - for example once you are at the airport - compensation will almost always be paid. If you are not offered an alternative flight it will be paid at similar rates to those above. If you are offered an alternative flight but it arrives two hours later - or departs one hour earlier earlier - than the original flight then similar compensation will be paid. The rules are complex but always claim if a flight is cancelled. Compensation for flights cancelled by the airline with more notice than seven days are different.

These rights are separate to any money or vouchers for a hotel, travel, or food paid by the airline. It has to make those payments as well.

Airlines can get out of paying if the delay or cancellation was due to 'extraordinary circumstances'. There is no definition in the law but that can include industrial action, extreme weather, war, terrorism, sabotage, political or civil unrest, hidden manufacturing defects, and bird strikes. But it can no longer include technical issues such as mechanical defects even if they were unforeseeable. Nor can it include computer system failures as large companies should always be available. In rare circumstances computer failure due to a major hacking attack may be argued to be 'extraordinary'.

Although the EU directive applies throughout the 28 member states of the EU, the Supreme Court ruling only binds courts in England and Wales. Lawyers say it would be 'persuasive' in Scotland and Northern Ireland. But it would not be binding on a case that was brought, for example, against the Stockholm based airline SAS for a flight from Hamburg to Dubrovnik. 

Enforcing your rights

If you are delayed the airline is obliged to explain your rights at the time of the delay. In the past many have not and on 21 March 2015 the Civil Aviation Authority took action against Are Lingus and Wizz Air to force them to obey this part of the Directive.

The CAA says that these airlines are paying without being difficult: British Airways; easyJet; Emirates; FlyBe, KLM/Air France; Lufthansa; Monarch; Thomas Cook; Thomson Airways; United Airlines; and Virgin.

Write to the airline to make the claim. State that you are claiming for delay or cancellation under European Regulation EC 261/2004. Don’t worry if you no longer have boarding passes or ticket details. As long as you can work out which flight you were on the airline will have your details on its manifest. If any airline refuses a claim you may have to go to court to enforce your rights. You can do that in a court in the country where (a) the flight landed or (b) the flight started within the EU or (c) the airline is based.

In England and Wales you can use the online service via the Government website.
In Scotland claims have to be made through the Sheriff Court - click here to learn more.
In Northern Ireland use

The court cases to cite are: 
Be determined
Expect some airlines to be difficult and try to put you off or delay matters. If the airline sends you a document headed Draft list of extraordinary circumstances following the National Enforcement Bodies (NEB) meeting on 12 April 2013 write back to say that list has no legal status, has been overtaken in England and Wales by the Appeal Court and Supreme Court rulings, and that you are relying on the law as set out in Regulation EC 261/2004. 

Ryanair has refused to pay claims where the flight originated in Edinburgh as it is outside the jurisdiction of the Supreme Court. RyanAir also resists claims in some other circumstances. On 18 September 2015 the Civil Aviation Authority began enforcement action against Ryanair.

Don't let these attempts to circumvent the court rulings put you off. The more difficulties airlines put in the way the fewer people will have the determination to pursue the case and get compensation. So make sure you pursue your claim and go to court if need be.

If an airline offers to pay the compensation in vouchers instead of money you are entitled to refuse and demand money.

Get help
A new online claiming tool has been launched by Resolver. It makes no charge for its service. Never use a claim management company. It will take 40% of your compensation and may or may not be good at the job.

You can get some advice free from the Civil Aviation Authority at If an airline has refused your claim the CAA offers an arbitration service. Its decision is not binding on the airline - though they usually follow it - and there have been long delays in the past as the CAA has inadequate staff numbers to handle the volume of cases. 

The CAA has two useful documents on its website. One about technical issues and time limits and the other about information which airlines should provide

And the EU has its own comprehensive guide to compensation and other help you can get for delayed or cancelled flights.

If you feel you need professional help you can use lawyers Bott & Co who specialise in airline cases. It has an online checker to see if you have a claim or not. If it takes a case then it charges 27% of any compensation obtained plus a €25 (£20) administration fee - both including VAT. Altogether that will be about a third of your compensation. There is no charge if you lose.

29 May 2017 
vs. 2.8

Sunday, 26 October 2014


Paul Reynolds (also known as Paul Brian Reynolds) was an independent financial adviser authorized and regulated by the Financial Conduct Authority (FCA and the FSA before it) for nearly eight years. This week the FCA revealed it had fined him £290,344 and banned him from holding any position in financial services. Mr Reynolds is contesting the findings and appealing the decision to the Upper Tribunal, the equivalent of the High Court. It could clear Mr Reynolds and allow him to pursue his career in finance.

We know these details because the FCA has finally published its December 2013 decision notice setting out the action against Mr Reynolds. It was delayed by Mr Reynolds's request to the Upper Tribunal that the details should be kept secret until the Tribunal had heard his case and decided if the fine and ban are imposed. After a hearing on 15 October the Upper Tribunal refused that privacy request.

The findings against Mr Reynolds are serious. They include reckless recommendations, deliberately misleading the FCA, investing clients' money without asking them, falsifying signatures, inflating the stated value of clients' investments, misleading clients, and submitting false loan applications on behalf of clients.

Eight clients were encouraged to invest a total of £2 million in Unregulated Collective Investment Schemes (UCIS) some of which have now been suspended losing them money. He also advised some of these clients to invest in Geared Traded Endowment Policies (GTEPs) where the invested money is borrowed. That substantially increases the risk of these already risky products. Aside from the eight people cited in the decision, a total of 41 clients invested £8.3m in these products earning his firm, Aspire, more than £600,000 commission.

Generally the FCA says that UCIS and GTEPs are only suitable for high net worth individuals who understand the risk, are happy to take it, and can bear any losses. Among the eight clients specified in the FCA decision notice was a retired woman living on a state pension, a hairdresser earning £3000 a year who remortgaged her home to raise the money to invest, and a chef and his accounts assistant wife, also on low incomes, who borrowed £500,000 against their home to invest.

I asked the FCA why it and its predecessor the FSA had allowed Mr Reynolds to be authorized for nearly eight years before taking action given the serous nature of the findings which stretched back several years "That is a very difficult question to answer. As soon as these issues were discovered we acted quickly" a spokeswoman told me.

The Upper Tribunal will hear the case on 8 and 9 December. The FCA told me that Mr Reynolds will represent himself and it could not put me in touch with him. No contact details for Mr Reynolds could be found. 

The FCA Decision Notice.


Two million people can get £140 off one electricity bill this winter. It's called the Warm Home Discount. Some will be paid automatically. Others have to claim or they will not get it. And the sooner they claim the better. Some who should be eligible are excluded. 

Core Group

The biggest group – called the ‘core group’ – are more than one and a half million older people who get pension credit. They must get the guarantee part of pension credit - which means their income is no more than £148.35 single or £226.50 for a couple. Pension credit guarantee credit will make their income up to that amount. They must have received it on 12 July 2014. which means they must have been born on 5 July 1952 or earlier and so will be about 62½ now. There are about 1.8 million who could qualify and the DWP expects 1.4m of them to do so. They qualify even if they also get the savings credit part of pension credit. This is a slightly wider definition than was used in 2014/15.

People in the core group should not have to claim. Suppliers will use information from the Department for Work and Pensions to pay them automatically. However, some who qualify may not be identified. If you have heard nothing by Christmas and you think you qualify, contact your energy supplier. Some of the smaller suppliers do not pay the discount and if your energy is supplied by one of them you will not get it. Details below.

Those with slightly higher incomes who only get the savings credit part of pension credit but do not get the guarantee credit will not qualify automatically but may qualify under the broader group described below.

Broader Group
The broader group who qualify are low income households where there is a young child or someone with a disability. With some suppliers pensioners not in the core group can qualify as part of the broader group. People in this broader group have to make a claim.

Unfortunately the energy suppliers all have different rules and their own definitions for what is a low income, what age of child counts, and what counts as a disability. These rules are complex.

If your income is low and there are young or disabled children or disabled adults in the household you may be entitled to the discount.

Pensioners who only get the savings credit part of pension credit or who get another means-tested benefit may qualify in this group too. Again suppliers have different rules.

The DWP expects 600,000 to qualify in this group this year. 

If you think you may qualify contact your supplier using the phone number on your bill and say you are asking about the Warm Home Discount. Or look online on your supplier's website and search for Warm Home Discount. The Government publishes a list of suppliers which are in the scheme. The links there take you to the websites of each supplier that is a part of the scheme. Almost all take you direct to the Warm Home Discount page. With one or two you may have to do a search. 

Claims should be made as soon as possible. Suppliers have a fixed amount of money for this group and when that runs out the supplier will close its scheme. Some may close by the end of December. 

People in the broader group should not switch supplier until the discount is made. They could be disqualified if they do.


The discount is normally taken off your winter electricity bill which could mean waiting until March 2015. People in the core group who have moved supplier since 12 July 2014 will be sent a cheque by their old supplier. Broader group customers who move supplier before the discount is made will probably lose it. All discounts should be made by the end of March 2014. People on prepayment meters will have the credit added to their key. Some will be sent a voucher to take to the Post Office to credit the key. Other suppliers will update the key automatically.


The big six electricity suppliers are legally obliged to offer the Warm Home Discount. They are British Gas (including Sainsbury’s), EDF Energy, E.on, npower, Scottish Power and SSE (that includes Atlantic Energy, Scottish Hydro, Southern Electric, and Swalec). SSE also operates the scheme for Ebico, Equipower, and M&S Energy. First Utility, Utility Warehouse, and Cooperative Energy are also in the scheme. If you get your electricity from any other small supplier you will not get the Warm Home Discount. If you have switched to one of these excluded supplier you may have lost the right to the discount.

Sixteen small suppliers which are not in the Warm Home Discount scheme: Better energy, Daligas, Ecotricity, Extra energy, Flow energy, Good energy, Green energy, GreenStar energy, isupplyenergy, LoCO2 energy, Oink Energy, Ovo, Spark Energy, Utilita, Woodland Trust Energy, Zog Energy.

The Warm Home Discount applies in England, Wales, and Scotland. It does not apply in Northern Ireland.

The Warm Home Discount scheme does not apply to people in Park Homes.

Last year British Gas added £60 to the Warm Home Discount which was then £135. This year it is not adding this amount. So British Gas customers who qualified last year for £195 will only get £140 this year.

The future
Until this year the Warm Home Discount was paid by the energy companies out of their own money. That amount - about £11 per customer - was added on to all customer bills. Under a deal with the Government they have taken that £11 off bills and the Government now funds the Discount directly. So it is a nonsense that each supplier has its own rules for the broader group and that smaller suppliers are not included.

The Government has issued a consultation paper about extending the Warm Home Discount for winter 2015/16. It proposes fixing the amount at £140 though the overall cost is expected to rise to £320m compared with £310 in 2014/15. One question is whether the the broader group rules should be the same throughout the industry. It does not seem to suggest that all smaller suppliers should be included though there is a question where that suggestion could be made. There is also an impact assessment. The main change considered includes extending the scheme to park homes.

More information

The official Government guide to the Warm Home Discount.

The Home Heat Helpline 0800 33 66 99 can give advice about the Warm Home Discount and other schemes to help with heating bills. You could also contact the Energy Saving Trust or the Centre for Sustainable Energy They can give advice about local help with insulation as well as national schemes.

29 October 2014 version 1.1

Saturday, 11 October 2014


In the Autumn Statement on 4 December 2014 the Chancellor George Osborne changed Stamp Duty Land Tax from midnight that day. This change brings it much more in line with the Scottish LBTT, though the bands and rates are different. The examples below have not been updated and relate to the old SDLT. The description of the Scottish tax is accurate.

Anyone buying a property in Scotland from 1 April will pay no stamp duty. Instead they will pay a new Land & Buildings Transaction Tax. The Scottish government says the new tax will be fairer and 90% of home-buyers will pay less. It will raise the same amount of money. So it follows that the other 10% will pay more – in some cases a lot more.

Stamp Duty Land Tax
At the moment throughout the UK anyone buying a residential property has to pay Stamp Duty Land Tax – SDLT. It is a strange tax. Nothing is payable on a property bought for £125,000 or less. But once that threshold is crossed a 1% tax applies to the whole price – not just the amount above £125,000. That is why it is called a ‘slab tax’. So a home sold for £150,000 is taxed at £1500. Once the price goes over £250,000 the tax is 3% - again on the whole price. So a £250,000 home costs £2500. But a £250,001 sale would generate a tax of £7500. The next threshold is a 4% tax above £500,000, 5% on homes selling for over £1 million and a 7% tax on those over £2 million.

Land & Buildings Transaction Tax
The new Scottish tax is very different. It starts later – not until a sale exceeds £135,000. And then the tax is only levied on the excess above that level. It starts at 2%. So on a £150,000 property the tax works like this. Take £135,000 from £150,000 which is £15,000 and multiply it by 2% which gives tax of £300. A lot less than the £1500 SDLT. The 2% tax applies up to £250,000 when it rises to 10%. But again that is only due on the amount above £250,000 plus of course the 2% on the amount between £135,000 and £250,000. But that still means any home bought for £324,285 or less will pay less tax in Scotland than in the rest of the UK from April. Another band taxed at 12% begins at £1 million. Some very expensive properties will pay almost double under LBTT compared with SDLT.

The table shows how the taxes compare.

Sale price

Stamp duty is widely resented. Buyers have already struggled to save up a big deposit, paid a fee to the lender, a surveyor, a broker and a solicitor, and will probably have paid for removal costs. So having to pay a tax as well – which is demanded before the deal is done – can sometimes be the last straw. And if it is difficult for first time buyers it can be doubly so for those who trade up. Crossing one of the slab thresholds can put the tax up by thousands of pounds.

The Scottish government says that 90% of sales will attract a lower tax and 10% will pay more. It also says that the tax take will be the same. So a lot of people will pay a few hundred or thousands of pounds less. And a few will pay some thousands or tens of thousands of pounds more. Although the LBTT will be welcomed by the majority the few with expensive houses will resent it even more than Stamp Duty.

England, Wales, and Northern Ireland
Given the dislike of Stamp Duty, would a version of the Scottish tax in the rest of the UK be more popular in the rest of the UK?

An analysis for Money Box by Savills estate agents found that the vast majority in England and Wales would pay less under the Scottish system. In the north of England, the east and the Midlands between 91% and 96% would pay less. Even in the south the great majority would benefit – 85% would pay less in the south-west and 73% in the south-east. In Northern Ireland I estimate that 97% would pay less and in England as a whole 87% would pay less with 13% –  about one in eight – paying more. Those two figures are my estimates not Savills’.

Only in London would most buyers pay more – and it is small majority at 53% paying more and 47% paying less. The resentment against Stamp Duty is particularly strong in London where in many Boroughs even a modest size family home can incur tens of thousands of pounds in tax. But these same homes will usually exceed the £325,000 balance point and cost more in a version of LBTT than it does in SDLT.


Up to £325,000
Over £325,000
South East
South West
East England
West Midlands
East Midlands
North West
Yorks & Humber
North East
N. Ireland*

Source: Savills from Land Registry data.
* PL estimate
** Scottish government

Pressure to change
Once the new LBTT begins in Scotland comparisons with SDLT in the rest of the UK are bound to grow. And for the vast majority the comparison will demand change. But of course in Westminster where the decision is made the argument would go the other way. So it could mean that demands grow for a version of LBTT in the rest of the UK outside London and perhaps a different tax exclusively for London that took account of the very high prices in many Boroughs. There are even suggestions that London should be able not just to set its property sales tax but to keep the proceeds as well. And that could set the capital on the road to its own form of devolution.

Further Information
Scottish Government announcement with links to a LBTT calculator
HMRC Stamp Duty Land Tax calculator