INHERITANCE TAX PENALISES THE SINGLE AND CHILDLESS

DISCRIMINATION BUILT IN TO INHERITANCE TAX 

The vast majority of us will not pay Inheritance Tax. In 2024/25 only 6% - about one in 17 - of estates will pay it. And even after the changes made in the 2024 Budget only about one in 11 will pay it in 2029/30. Nevertheless, Inheritance Tax remains one of the most feared and hated taxes. Especially by those who feel it discriminates against them. And the rules do discriminate against the heirs of people who are childless, or single, or who do not own their own home. 

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When someone dies their estate is assessed for Inheritance Tax. If their assets exceed their threshold then the tax is normally levied at 40% of the excess. But there are four different thresholds, some worth double or treble the basic one.

Main Residence Band

The thresholds start with the basic nil-rate band (as it is formally called) of £325,000. But if you own the home you live in you can have up to an additional £175,000 making a total of £500,000. It is called the main nil-rate residence band or MRNRB. There are two main conditions to get it

• The additional amount is the value of the home with a maximum of £175,000.   
• The home must be left to direct descendants. That means children, grandchildren, or great grandchildren of the person who has died. It does not include cousins, nephews, nieces, sisters, brothers, uncles, aunts, or any other relatives. However, the definition of a direct descendant does include adopted, step, and foster children.

For those who do qualify there is a third rule which reduces the main residence band if the total estate including the home exceeds £2 million. It disappears at the rate of £1 for every £2 above £2 million so the £175,000 extra vanishes as the estate reaches £2.35 million.

These rules discriminate against the childless and of course those who do not own their own home. They also discriminate against wealthier families! 

Marriage

One special threshold is limitless. Everything you leave to a spouse (including a civil partner) is completely free of Inheritance Tax whatever its value. If you have a spouse, it is usually best to leave everything to them. If you have a partner who is not a spouse then marrying or civil partnering them is the best inheritance tax planning you can do. If you do not they are treated like any other heir when you die, however long you have been together and however many children you have shared.

There is a second inheritance tax advantage to marrying. Not only is everything left to a spouse free of the tax when the first of the couple dies, but when the second dies their heirs get double the normal allowances. So it really is win win. 

That is why rule number one of IHT planning is - marry the one you love!

Second to die

If the person who dies is a widow (including widowers and bereaved civil partners of course) and their partner left everything to them - as recommended above - then the heirs get double the normal thresholds. 

The basic threshold of £325,000 is doubled to £650,000. So their heirs can inherit that much entirely free of inheritance tax. If they own their home their heirs also get double the main residence threshold - so the £175,000 is doubled to £350,000. Added up those two thresholds reach the magic £1 million exempt from tax, which is often talked of but in practice applies only to a minority of estates. 

These rules discriminate against the unmarried - single or divorced - and magnify the discrimination against the childless and those who do not own their own home. 

The complex web of thresholds

Inheritance Tax Thresholds
Marital status	Children	Home ownership	IHT begins over
Single or divorced	No children	Don’t own home	£325,000
	No children	Own home	£325,000
	Children	Don’t own home	£325,000
	Children	Own home	Up to £500,000*
Widowed (spouse let them everything)	No children	Don’t own home	£650,000
	No children	Own home	£650,000
	Children	Don’t own home	£650,000
	Children	Own home	Up to £1,000,000**
Married	leave everything to spouse or civil partner and it is all free of IHT
* Including up to £175,000 of the value of a home left to a direct descendant. ** Including up to £350,000 of the value of a home left to a direct descendant.  If the value of home exceeds £2 million, the extra allowance of £175,000 or £350,000 for a widow is tapered away by £1 for every £2 above £2 million. And disappears at £2.35m or £2.7m (widow).

The table sums up the rules and tabulates the discriminations. However, not all the details are captured in this table which, believe it or not, is simplified! 

If your estate is large or your circumstances are complex you should always seek professional legal and tax advice about how the rules apply to your affairs and what tax would be due. Find one through the Association of Lifetime Lawyers or the Society of Trust and Estate Practitioners. 

Never consider any scheme to reduce inheritance tax by putting your home or assets into a trust. It will not work and you - or more likely your heirs - will have to spend more money undoing it. Read more about the dangers in this report.

Paul Lewis

2 October 2025

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OFGEM WON'T SCRAP STANDING CHARGES

1 October 2025

STANDING CHARGES ARE HERE TO STAY 

MAKING ENERGY BILLS EVEN MORE COMPLICATED

Summary

After nearly two years of consultation and thought, the energy regulator Ofgem has decided not to scrap standing charges for electricity and gas. 

Instead it plans to make suppliers offer one tariff from January 2026 which has lower standing charges - reduced by either £150 or £200 (it is consulting on which) below the current level of £320 a year for those who have both gas and electricity. 

Customers who use less than a quarter of the average use will be excluded from the lower standing charges. 

Suppliers will be expected to recover the cost of reducing standing charges by raising the price of each unit of gas or electricity used. Ofgem will not cap those higher unit charges but they must be 'reasonable'.

Details

The 22,000 word consultation paper setting out Ofgem's intentions was published on 27 September. Technically it is another consultation paper. But clearly the regulator has come to a fairly settled view of what it intends. If the changes are to happen in January, as it plans, it must announce them on 25 November with the January price cap. The consultation lasts until 22 October.  

Lower standing charge

The standing charge reduction will be the same amount across all payment types even though standing charges vary from region to region and are higher for those who pay quarterly. 

The amount will be split between the two fuels. Ofgem tells me that will mean a reduction in electricity standing charges from the current average of £196 by between £65 (33%) and £90 (46%). And a reduction in gas standing charges from current average of £124 a year of between £85 (69%) to £100 (80%). The reduction is less for electricity than for gas because electricity standing charges contain many more additional costs for elements such as green schemes and discounts for low income customers which will remain with the electricity standing charge. I am not quite sure yet why the maximum reduction per fuel of £100 + £90 does not come to the overall cut of £200!

The electricity standing charge reduction will be the same for the 4.4 million households who are not connected to the gas grid. About half of them use electricity for their heating - the rest use oil or LPG. 

Excluding low users

Ofgem plans to exclude low users from the reduction in standing charge. It calls this a minimum consumption threshold which is intended to ensure the lower standing charges will not benefit those with second homes or perhaps have a separate supply for an outhouse or garage.

However, Ofgem admits it will also exclude from the lower tariff 446,000 consumers many of whom are on low incomes. Most quarterly payers (standard credit consumers) are pensioners and many prepayment meter (PPM) customers are on low incomes. 

It plans to set the threshold to get the lower standing charges at 666 kWh a year for electricity and 2836 kWh for gas. Those rather odd numbers are the equivalent of 90 days usage at the rates of 2700 kWh for electricity and 11,500 kWh for gas which it says are 'typical' of users who have both fuels and pay by direct debit. It uses those figures to turn its price cap into a typical 'annual bill'. 

The customers who will be excluded are those who are facing large increses in their bills this October. While Ofgem says the 'typical' dual fuel user will see their total bills rise by 2% from October, customers using a quarter of the typical amount of gas and electricity will face a rise of double that just over 4% because the biggest rises in the October cap were for standing charges - up 4.5% to have an electricity supply and a massive 14.1% more for a gas supply. They dwarf the 2.4% rise in electricity unit prices and the slight fall of -0.8% in gas unit prices, penalising small users. 

Currently the threshold will be a cliff-edge - at those levels you will get it, one unit below and you will not. So someone using the threshold amounts will get the standing charge discount but someone who boils one less kettle of water or takes one less shower in a year will lose it. In theory it will be possible to cut usage by just 26p worth of electricity and 7p worth of gas and lose the whole £150 or £200 reduction in the total standing charges. Ofgem told me it is "not currently proposing a sliding scale but may consider this further as we move towards a decision". 

Higher unit rates

Ofgem has been at pains to stress that its proposals do not cut overall prices they just shift them around. So overall customers who take the lower standing charge tariffs will pay the same because the the rates they pay per unit will be higher. 

These higher unit rates will be above the capped rates set by Ofgem and will not themselves be capped or subject to any specific restrictions. Ofgem simply says they must be 'reasonable' taking account of the cost of supplying energy to the customer and what it calls 'comparative tariffs' and 'any other relevant matter'. It says it may issue further guidance on what would be reasonable. But it is clear that the higher unit rates will vary from supplier to supplier even though the lower standing charges will not.

Ofgem did not provide an indication of how much higher the unit tariffs would need to be. However, the arithmetic is straighforward. Assuming that the typical customer who switched to the lower tariff used half the typical amount of energy then the unit tariffs would need to rise by 6.67p (25%) for electricity and 1.74p (28%) for gas for a supplier to break even on cutting the standing charge by the maximum amounts which Ofgem proposes. If the balance point was set at three quarters of typical use then the individual unit tariffs would need to be about 17% more than the capped rates.

Complexity

The addition of an extra tariff with lower standing charges but higher unit rates is clearly going to make customer choice even more difficult. Even a binary choice between a tariff with capped standing charges and capped unit rates and a tariff with the lower standing charges and higher tariffs will be impossible for individual customers to make, not least because all suppliers will be free to set the higher tariffs to match the lower standing charges. 

Ofgem could cut through this complexity by mandating suppliers to work out each month which combination would be cheaper and to charge customers that lower cost each month.

Paul Lewis

3 October 2025

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GET THAT REFUND

All over the country thousands of people are due refunds for holidays, flights, trips, concerts, or events that they have paid for but have not happened. The law is clear – if you pay for a service and it is not provided then you are entitled to your money back. These rights are given under various legal provisions, but they all say money must be refunded. If you bought something through an agent - a ferry ticket for example - it is the supplier of the goods or service who remains liable not the agent.

Despite these clear rights, enforcing them can be difficult against a firm that says it will not – or cannot – pay you. It may have offered a voucher for a future replacement trip. Ot it might claim that the event has just been postponed and your ticket will be valid at some future date. 

None of those alternatives take away your right to a full refund.

Enforce your rights

Knowing your rights is one thing, enforcing them can be quite another. So here is my guide to the big stick you can use to make a company obey the law. 

Of course, you have written, emailed, phoned, hung on for ours and tried all the things the firm suggests and you still have not got your money back, as the law says you must. 

Time for the nuclear option. 

Step 1: The court

If a firm owes you money you can go to court to recover it. We used to call it the ‘small claims court’ but in England and Wales it is now done centrally through the Courts & Tribunals Service website at moneyclaim.gov.uk. In Scotland it is called the Simple Procedure at Scottish Courts and Tribunals. In Northern Ireland go to small claims.

Don't worry, you are almost certainly not going to go to court. Begin the court action online. Fill in the claim form with your details, and the details of the firm and the amount claimed. Claim the full amount including non-returnable deposits. Put your reasons. Do not proceed with the claim but take a screenshot of the page.

If you are having difficulty finding details of the firm see 'tracke them down' below.

Step 2: The boss

Forget about customer service, go straight to the person who can make something happen. Email the Chief Executive of the company that owes you the money. You can find that address from www.ceoemail.com. Write a brief, polite but firm email summarising in a few lines what you are claiming and why, reminding them that you are entitlted to your money back and warn them that you expect a refund within seven days or you will go to court. 

Now attach the screenshot of your court claim to the email. That is the masterstroke. It proves that you are not just threatening to 'go to court' but that you know how to do it and are already halfway through the process. 

Emails to the boss will usually be read by a minion. But that does not matter. Every firm has a section to give cases special treatment. You have just reached it.

Shortly after you should get your money. One happy reader who had spent weeks going through the usual channels used this technique and emailed me: “It worked! Easyjet wrote back today and I’ve received the reimbursement to my credit card”.

Turn the screw

If after 14 days this method does not result in a full refund including non-returnable deposits and without deduction of any administrative fees, then go back to your online claim and start the court action. These proceedings are very simple and straighforward and any small fee charged at this stage will be refunded when you win. 

In fact your case will almost certainly never get to court. The last thing any firm wants is a judgement that it has to refund customers. It will be settled out of court and you will be given your refund - in full without fees or charges deducted - and reimbursed for your costs. You may even get a few pounds added on.

Track them down

One problem people find with global companies is that it is very hard to track down a UK address for them. You need that for your court claim - you can only sue a UK entity for money. First, search the website very carefully as it may be there. Second, have a good rummage round the CEO email website - it will probably be there. If not try Companies House. It is almost certain the firm has a UK branch. Try searching on company names but always check you have the right one by looking at the 'people' or 'filing' tabs to see what the company does and who are its directors. The search is free - never google 'companies house' you will get firms that want to charge you for free information. But Google can be helpul to find who owns whom by googling the firm's name and clicking news to see who may own it now. 

Thanks

I am grateful to Helen Dewdney of thecomplainingcow.co.uk for this idea. She has many more in her excellent books How to Complain and 101 Habits of an Effective Complainer.

Paul Lewis 

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29 September 2025

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MONEY BACK PLASTIC

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. The supplier’s bank will then ask the supplier to provide the money. If the supplier refuses then its bank has to refund you if you have a valid calim. Some guides and some banks suggest it depends on the firm you paid agreeing to refund their bank. That is not true. If can only refuse to pay if it believes that you do not have a valid claim. If you insist you do then it goes to a dispute procedure with Visa, MasterCard, or American Express. The card network's decision is final. If it upholds your claim then the suppliers bank has to pay. It is part of its contract with the netork and if it refuses then it will - or should - lose the ability to use Visa, MasterCard, or American Express. 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. If your claim is valid the supplier's bank must pay up.

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. But if you ultimately lose and the network says your claim is not valid you may have to give the money back.

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.

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29 September 2025

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THE CONTINUOUS PAYMENTS RACKET

THE RULES
If you agree to make a payment or series of payments on your debit or credit card you can cancel future payments by telling your bank or card provider which must stop them at once. You do not have to tell the firm that takes the payments though it is sensible to do so if you can.

In the past just about every bank and credit card provider in the UK has told customers they cannot do that and given them false information about their rights to cancel payments on credit and debit cards.

Those rights have existed since 1 November 2009 but in 2025 some banks are still getting them wrong.

As long ago as 28 June 2013 the Financial Conduct Authority confirmed the advice which has been given in this blog since April 2012. The FCA says:

"high street banks and mutuals...have agreed that they will ensure that when a customer asks for a recurring payment to end - that will be sufficient to cancel the arrangement.  They have also confirmed that should a payment go through by mistake following cancellation by a customer the customer will be refunded immediately."

It now has a useful guide to these payments and what to do. 

CONTINUOUS PAYMENTS
These payments are called ‘continuous payment authorities’ or ‘recurring payments’. I will call them CPAs. They are NOT direct debits or standing orders which are regular payments from your current account and are covered by separate rules. You have always been able to stop a direct debit or standing order just by telling your bank. And nowadays CPAs can be stopped that way too. 

A CPA is an agreement you make with a retailer, hotel, gym, insurance company, lender or other firm providing you with a service (they are all called ‘merchants’ in the bank jargon). You give the merchant permission to take money from a credit card or a debit card. Even though the debit card money comes out of your current account it is NOT a direct debit – it is a CPA.

The agreement can be made over the phone or online and it allows the merchant to take money in the future off your card. You normally have no control over the amount that is taken or when – it can be any amount at any time.

In some cases these CPAs are a scam – you think you are buying one item online only to find that you are committed to paying monthly for years. In other cases payday loan companies will store your details and recover future debts using the original card details. Even subscriptions to gyms, publications or insurance premiums are taken through a CPA because the merchant believes it puts them in control of when the payment is cancelled.

In the past it was very difficult to stop these payments. Originally CPAs could only be stopped by the merchant. If you went to your bank or card company it would say that it could do nothing and advise you to contact the merchant to stop the payment. If the merchant refused the bank or card provider would continue to allow the merchant to take your money.

That changed more than 15 years ago on 1 November 2009 when a new law came into force. They were called the Payment Services Regulations 2009 and are now the Payments Services Regulations 2017. Regulation 67 makes it clear that your bank or card provider has to stop the payments if you ask it to do so regardless of whether you have told the merchant.

If the bank or card provider does not obey your instructions then it has to refund any subsequent payment it allows to be taken from your account. And if a subsequent payment causes you to incur any fees – such as an overdraft charge or a late payment fee – or to lose any interest, then those losses have to be refunded too.

Despite that change in the law many years ago listeners and readers still tell me that their bank has wrongly told them that they can only cancel the payment through the merchant. In the past that has included all the major bank and credit cardproviders. But it is not true and has not been true for years. 

Some banks have even advised in the past that the only way to stop the payment is to close the account and cut up the card. Not only is that advice wrong it may not work. Visa and Mastercard can let merchants track you and move the agreement to a card you take out in the future. It has also been known for a bank or credit card provider to try to recover the money – and penalty charges – from customers who have cancelled a card.

Some banks have admitted to me in the past that they have given customers the wrong information. If yours does that, refer them to Regulation 67!

Cancelling a CPA

Tell your bank or card provider that you have a CPA, name the merchant and give any other details you can such as how the payment appears on your statement and, if you know, the dates and times when the payment is normally taken. Tell the bank that you cancel that payment authority with immediate effect. Quote regulation 67 of the Payment Services Regulations 2017. And if necessary mention that useful guide I referred to earlier. 

You can give this instruction on the phone, through an online message, by email, by letter, or at a personal visit to a branch. It is best to do it in writing but always make a note of the time and date when you give the instruction.

If a payment from that merchant is taken in future, contact the bank again and say you want that money (and any penalties or losses it may have caused you to incur) refunded immediately under regulation 76.

If the bank or card provider refuses to do so, or fails to do so after eight weeks, you can take your complaint to the Financial Ombudsman Service www.financial-ombudsman.org.uk or call 0800 023 4567. The FOS will almost certainly take your side in the dispute.

If you have told your bank to cancel a CPA in the past

If your bank or card provider has failed to act on your instructions to cancel a CPA at any time since 1 November 2009 you should be able to get back all the payments taken from your account since you gave that instruction. The bank or card provider has to refund them to you. You should also get back any penalties that the transaction led you to incur such as an overdraft charge or a late payment fee and any loss of interest.

The FCA confirmed this in a previous statement

"the largest banks and mutuals have agreed to review every individual complaint they have received about the non-cancellation of a CPA and to pay redress where payments have continued to be made despite the customer cancelling the arrangement. This applies to all complaints since November 2009 when the Financial Services Authority (FSA), the FCA’s predecessor, began regulating banking conduct."

The rules depend on when you gave the instruction – it must always be on or after 1 November 2009 – and when the payment was made.

Payments made in the last 13 months.  

Tell the bank or card provider

·         That you gave a clear instruction to cancel the payment on a particular date

·         That the payment made was after that date and was therefore unauthorised under reg.67(3) and 67(4)of the Payment Services Regulations 2017

·         That you are entitled to an immediate refund of the amount and any penalties under reg. 61

·         That the event occurred less than 13 months ago as specified in reg.59(a)

Payments taken earlier than 13 months ago

Tell the bank or card provider

·         That you gave a clear instruction to cancel the payment on a particular date (which must be 1 November 2009 or later).

·         That the payment was unauthorised under reg.67(3) and 67(4) of the Payment Services Regulations 2017

·         That you are entitled to redress under reg. 76

·         That under reg. 74 the thirteen month time limit does not apply because the bank or card provider failed to give you adequate information under Part 6 of the Regulations.

You should also add that the bank or card provider has a duty to treat you fairly and to give information which is clear, fair and not misleading. Remind it too of its Custommre Duty. When you asked it to cancel the payment it failed to explain your rights correctly thus preventing you from taking the correct action at the right time.

If the bank refuses take your case to the Financial Ombudsman Service – details above.

The law

The law is in the Payment Services Regulations 2017. 

Regulation 67 (3) "The payer may withdraw its consent to a payment transaction at any time before the point at which the payment order can no longer be revoked …  (4) …the payer may withdraw its consent to the execution of a series of payment transactions at any time with the effect that any future payment transactions are not regarded as authorised for the purposes of this Part."

Regulation 76(1) makes it clear that where a payment was not authorised the provider must "immediately— (a) refund the amount of the unauthorised payment transaction to the payer;

And must also (b)… restore the debited payment account to the state it would have been in had the unauthorised payment transaction not taken place.”

In other words it has to refund any penalties that have been incurred.

The time limit for a refund is set down in regulation 74 which says the customer

74(1) ...is entitled to redress…only if [they] notif[y] the payment service provider without undue delay, and in any event no later than 13 months after the debit date, on becoming aware of any unauthorised or incorrectly executed payment transaction.

However 74(2) states that the 13 month limit may be waived if the provider has not given the relevant information to the customer. That information is set down in Part 6 of the Regulations.

FCA guidance

The Financial Conduct Authority and its predecessor the Financial Services Authority issued guidance on how the Regulations should be implemented. This is from 2012.

“However, it is best practice for the customer to be advised that notice of the withdrawal of consent should also be given to the payee, because the PSRs. [Payment Services Regulations] do not address the payer’s underlying liability under the terms of any contract they have signed.  For the avoidance of doubt, it is not acceptable for the payment service provider to make withdrawal of consent dependent on notice having been given to the merchant.”

It also clarifies that consent can be withdrawn up to the day before the payment is due

"For future dated payments, the latest point at which the payer can revoke the payment

instruction is the close of business on the day before the payment is due to be made, or if the payment transaction is to be made when funds are available, close of business on the day before those funds become available."

It also warns "Be aware, though, that you will still be responsible for paying any money that you owe."

Conclusion
Despite what a bank or credit card provider may tell you you can cancel a continuous payment authority on a debit or credit card simply by telling your bank or card provider. And it must act on your instruction at once.

28 July 2025

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MARRIED COUPLES TAX BREAKS

There are three tax breaks married couples can get

MARRIAGE ALLOWANCE

Around two million married couples and civil partners are missing out on a tax allowance that is worth £252 a year. 

The Marriage Allowance allows a spouse (or civil partner) to transfer up to £1260 of their personal tax allowance to their partner if 

(a) their income is below the tax threshold (currently £12,570 a year) and 
(b) their spouse does not pay higher rate tax which begins on incomes above £50,270 a year (£43,663 in Scotland). 

Both must also be born after 5 April 1935 because older couples get a bigger tax break - see below.

Around two million have claimed it successfully but another two million who could claim have not done so. 

How it works
If a couple qualifies then the non-taxpayer can transfer £1260 of their unused personal allowance to their spouse. That will save the taxpaying spouse basic rate tax on that amount which is £252 a year (£21 a month).

Claiming and payment
You can claim the marriage allowance online or through the income tax helpline 0300 200 3300. You will need National Insurance numbers and dates of birth for you and your spouse. Lines are open 0800-2000 Mon-Fri or 0800-1600 Saturday. You can also claim by sending a letter with your details to Pay As You Earn, HM Revenue and Customs, BX9 1AS. That might take longer.

Once the transfer is done the spouse receiving the extra allowance will have a suffix M added to their tax code The one making the transfer will have a suffix N and their tax code will be lower. 

It will be backdated to the start of the tax year and then reflected in a reduced amount of tax each month. If you qualified in the last four tax years you should claim for them too - that would mean a cheque for £1008. 

Problems
The transfer can only be for the full amount of £1260. That can be done even if the person transferring the amount has an income close to their personal tax allowance. So someone with an income of £12,000 who is a non-taxpayer can transfer the full £1260 leaving themselves with a personal allowance of £12,570 - £1260 = £11,310. So they will start being a taxpayer and pay basic rate tax on £12,000 - £11,310 = £690 ie a tax bill of £138. Their spouse will save £252 leaving the couple £114 better off.

The Marriage Allowance is only available to married couples and civil partners. couples who live together but are not married or civil partners do not qualify.

If either partner was born before 6 April 1935 then they cannot claim Marriage Allowance because they can claim the higher Married Couple's Allowance. 

MARRIED COUPLE'S ALLOWANCE 

The Marriage Allowance cannot be claimed if either spouse was born before 6 April 1935 because they can already get a bigger tax break called Married Couple’s Allowance. That is a hangover from a concession that all married couples used to get until it was scrapped from 6 April 2000. But an exemption said that anyone aged 65 then (ie born before 6 April 1935) could still have the allowance.

Married Couples Allowance is worth up to £1127 off one partner’s tax bill. If income exceeds £37,700 the allowance can be reduced but it can never be less than £436. It can be claimed by a member of a couple now if one of them meets the age criteria. So an 83 year old marrying a 55 year old can claim it. It is normally given to the spouse with the higher income and part of it is transferable to the other spouse. If you can claim it then get it backdated for up to four tax years if you were eligible then. More information on Married Couple's Allowance or here 

BLIND PERSON'S ALLOWANCE

There is a third allowance that a married couple can transfer between them. The Blind Person’s Allowance is £3130 in 2025/26 so is worth £626 to a basic rate taxpayer. However, if the blind person cannot make use of it all – has an income below £15,700 in 2025/26 – the unused portion of it can be transferred to their spouse.

To qualify for Blind Person's Allowance in England, Wales, and Northern Ireland you have to be registered with your local councils as blind or severely sight impaired. In Scotland you qualify if you cannot do work that requires sight. If both partners qualify they each get one allowance. More information here on Blind Person's Allowance.  

29 September 2025

vs. 3.0

16,278

State pension steal from April 2026

STATE PENSION STEAL TO COST SOME OVER £12,800

Anyone born 6 April 1960 or later will not get their state pension at 66. They will have to wait up to 12 months after that birthday to qualify, costing them up to £12,849 in lost state pension. 

The rise in state pension age will happen in stages linked only to date of birth. It will be identical for men and women and apply throughout the UK.

            The loss calculations were done by me. An FOI response from DWP is awaited.

The actual loss for any individual will depend on the day of the week which is their payday. That is a weekday from Monday to Friday and depends on their National Insurance number. The loss assumes the individual gets a full New State Pension and assumes that will be £241.05 from 6 April 2026 and £247.10, an increase of 2.5%, from 12 April 2027. The state pension is accumulated weekly so there are four or five weekly payments in a month which accounts for the difference between the minimum and maximum losses.  No account is taken of the up to six days pension that is paid between the birthday and the first payday.

Other losses

The loss of the pension for up to a year is not the only loss for people who reach 66 next year. 

• Winter Fuel Payment is only paid to those who reach state pension age in the qualifying week in September. For winter 2026 the last date to qualify is expected to be 27 September 2026 which will include people born 27 June 1960 or earlier who will be 66 and 3 months. In winter 2027 people born 26 December 1960 or earlier aged 66 and 9 months will qualify. The same rules currently apply to the Pension Age Winter Heating Payment in Scotland. 
• People who work must pay National Insurance contributions until they reach state pension age. They start at 8% on earnings over £242 a week (6% for self-employed) and 2% on earnings above £967 a week. In future people aged 66 will have to pay them until they reaach 67. 
• Bus passes for free travel after 9.30 in the morning in most of England are linked to state pension age. 
• Means-tested benefits such as pension credit, housing benefit, and council tax reduction are all linked to state pension age. Once you reach that age they pay much more than is paid to people below that age who are only entitled to 'working age' benefits. Universal credit is less than half the amount of pension credit and comes with onerous requirements to search for a job even if that seems hopeless in your late sixties.
• The qualifying age for pension credit will rise with state pension age so mixed age couples will have to wait longer for the younger partner to reach it.
• Many company pension schemes and some older public sector pension schemes still pay out from age 65 - or even 60 - leaving a longer gap before the state pension kicks in. 
• Attendance Allowance can only be claimed from state pension age. Younger people must claim Personal Independence Payment (PIP) which is the same amount but can be more for those with mobility issues but which has different tests for entitlement.

Data from the Office for National Statistics shows that the delay will affect around 600,000 people who reach 66 each year and approximately 5000 men and 3000 women will die at that age before they get their pension. 

The Office for Budget Responsibility estimated in 2025 that the total net savings for the Government from the change would be £10.5 billion in 2029/30.

Don't blame the present Government it was all laid out by George Osborne in the Pensions Act 2014 which brought forward by eight years the rise to 67. He boasted how much money he was saving the Government from a succession of pension age changes. They are all set out in these timetables.

Paul Lewis

29 September 2025

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Winter Fuel payment 2025/26

 

WINTER FUEL PAYMENT 2025/26

 England, Wales, and Northern Ireland

Qualifying

·       Everyone aged 66 by 21 September this year – born 21/9/1959 or before – will get the Winter Fuel Payment in Nov/Dec 2025. It will be paid automatically into your bank account without a claim. Ignore any emails or messages inviting you to claim it. They are from thieves. Don’t click on any links and delete them. 

·        However, a very few who have not claimed their state pension, have never worked in the UK, or have legally arrived in the UK recently may not be known to the Department for Work and Pensions. They will be missed and will have to claim. You can’t claim yet. But later in the year go to gov.uk and search ‘winter fuel payment’. The deadline is March 2026

·                How much

      The Payment is £200 per household where one or both is aged 66 to 79 and £300 if one or both are over 80 - born 21/9/45 or earlier.

·        Couples not on means-tested benefits will get half each, so either £100 or £150 each. Though if one is over 80 and the other not the older one will get £200 and the younger £100.   

      For a couple where one claims a means-tested benefit, the whole amount will be paid to that person

·        People in care homes will get the Winter Fuel Payment as long as they do not claim any means-tested benefit there. They will get the half payment - £100 aged 66-79 and £150 aged 80 or more. If they get a means-tested benefit they will not get the payment.

People living outside the UK cannot get the Winter Fuel Payment. In Winter 2023/24 and earlier it was payable to some people in the EEA and before that in parts of the EU and before that throughout the EU, but that is no longer the case.

Taking it back

·        Individuals who get Winter Fuel Payment who have a taxable income above £35,000 in 2025/26 will have their Winter Fuel Payment taken back in full through their income tax in 2026/27. That will normally be done through their tax code if they have one. It will be reduced so that they pay back a twelfth of the payment each month from April 2026 to March 2027. That will mean extra monthly tax of £16.67 if they get the standard £200 payment. The details of how the tax code itself will change have yet to be announced. 

      However, people who already complete a self-assessment form will not have their tax code amended but will repay the winter fuel payment in full with their first tax payment for 2025/26 which is due by 31 January 2027 at the latest. As far as I can see their tax return will be prepopulated with the repayment. They should check that their tax code on a pension or earnings has not been adjusted as well. 

      The few people affected who neither have a tax code nor do self-assessment will repay the Winter Fuel Payment through the simple assessment procedure which collects the tax they owe. HMRC says it will be done automatically without the need to register or take any action. 

      In 2027/28 HMRC plans to take back the winter fuel payment from 2026/27 and 2027/28 even though the income for 2027/28 will not be known when it is recovered - as set out here see 'winter payment'. That means that it will be taking back two winter fuel payments only one of which will have been received. HMRC says any errors -- for example if income falls below the £35,000 limit in 2027/28 -- will be corrected through the tax code. It plans to recover the payment in years from 2028/29 from the April before the payment has been received. The law implementing this recovery scheme has not yet been published still less passed by Parliament.

·        Taxable income includes all money that counts, or could count, towards income tax due in a year. State pension, earnings, pensions from a job, retirement annuities, personal pensions, taxable drawdown from a SIPP, taxable social security benefits such as widow's benefit, carers allowance, and incapacity benefit, rental income (but not up to £7500 a year from rent-a-room), interest on savings, and dividends will all be counted. Savings interest and dividends are counted in full including the amount within the £1000 or £500 personal savings allowance or the £500 dividend allowance. Interest on ISA savings and dividends on ISA investments are not taxable and do not count as taxable income. Nor does any profit made on trading or property covered by the £1000 trading and property allowances. Premium Bond prizes do not count as taxable income. Capital gains are not counted as income. Non-taxable benefits such as attendance allowance will not be counted as income.

     Paying into a pension or giving money to charity will probably not reduce the taxable income that is counted. No question is asked about either on the official calculator. However, there may be circumstances where it might. The rules have not yet been published. 

·        There will be no assessment of household incomes. So a low-income husband may keep £100 and his high income wife may have her £100 taken back through her tax. Or £150 if both are over 80.

·        There will be no assessment of capital so the value of a home or savings or investments or property will not be counted. So some ‘millionaires’ in the broadest definition will still get it even if their home or savings or both together exceed £1 million but their individual taxable income is £35,000 or below.

·        Government says about two million will have it taken back and more than 9 million will keep it.

·        Government says the threshold of £35,000 was chosen to ensure all who need it get it and it is ‘broadly in line with average earnings’.

      You can opt out of receiving the winter fuel payment. The deadline for this year was 15 September and it is 10 October in Scotland. The Government revealed on 1 October that about 50,000 pensioners had opted out of the payment. The opt out window for the 2026 winter opens on 1 April 2026. 

·        Nine million pensioners to receive Winter Fuel Payments this winter - GOV.UK

Last winter, Northern Ireland implemented the pension credit means-test for the Winter Fuel Payment, but in addition gave £100 to every pensioner of qualifying age who did not get the payment.

·       This winter it will follow the England and Wales rules, the Communities Minister has confirmed.

·       Scotland

·        From this winter the payment will be called the Pension Age Winter Heating Payment. It will follow the new scheme in the rest of the UK but with payments of £203.40 aged 66-79 and £305.10 aged 80 or more. The extra amounts reflect a 1.7% increase on last year’s payments, in line with last September’s inflation which was used to raise other benefits. As in rest of UK the payment will be given to all and then recouped from those with an income in 2025/26 of more than £35,000. The mechanism for recovering the money will be the same as in the rest of the UK. The £100 payment which the Scottish government promised for all pensioners who don't qualify for winter fuel payment has been scrapped. Official gov.scot announcement here.  

      Future Years

      In 2026/27 and 2027/28 Winter Fuel Payment will be affected by the rise in state pension age. If the current rules are followed it is expected that for Winter 2026 the last date to qualify will be 27 September 2026 which will include people born 27 June 1960 or earlier who will be aged at least 66 and three months. In winter 2027 only people born 26 December 1960 or earlier will qualify and they will be at least 66 years and nine months. In future years people will need to be 67 by the week of the third Monday in September to qualify. The same rules are expected to apply in Scotland.

Paul Lewis

3 October 2025

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