Rachel Reeves’ tenure as Chancellor of the Exchequer has gotten off to a shaky start. Wobbly as Hartley’s jelly. Her update on the country’s fragile public finances, given to the House of Commons six days ago, was laden with financial venom as she announced a drastic reduction in the winter fuel payment that will result in ten million pensioners no longer receiving the benefit, worth up to £300.
As a result, people who have reached state pension age in England and Wales will now only receive payment this winter if they receive pension credit, or a small number of other means-tested benefits (the devolved governments of Scotland and Northern Ireland set their own rules).
Rachel Reeves’ update on the country’s fragile public finances, given to the House of Commons six days ago, was laden with financial venom.
The Chancellor of the Exchequer has announced a drastic reduction in winter fuel payments which will mean that ten million pensioners will no longer receive the benefit, worth up to £300.
The announcement means that up to 1.2 million financially struggling retirees who are eligible for the pension credit but are not applying for it (either out of pride, ignorance or inability to complete the application process) will be left without it. As will many others who simply do not qualify for the benefit but whose finances are severely limited. My inbox has been flooded with readers spitting blood over Reeves’ decision.
They feel that pensioners, who have no representation in government, have been unfairly discriminated against. I spent five hours on the phone with readers who will lose the benefit. For some, its loss will put further pressure on their already fragile finances. For others, it will make little difference, but they feel betrayed after Labour vehemently denied, before the election, that the payment would be means-tested.
Up to 1.2 million hard-pressed retirees who are entitled to a pension credit but do not apply for it (either due to pride, ignorance or inability to complete the application process) will be left without it.
In the first of these two camps is Julia Holmes, a 69-year-old retired carer from Saltash in Cornwall. Julia, who is divorced, has already had to adjust financially to the fact that her state pension, promised at 60, was not paid until she was 66 because of the equalisation of the state pension age for men and women. Now she will lose her fuel payment.
“You work hard for 40 years in an industry that doesn’t pay well,” says Julia. “You save a little for the future, you struggle to get by and then a woman turns up at 11 Downing Street and, without a shred of compassion, decides to make things worse for pensioners like me.”
She added: “Politicians are so out of touch with reality. Rachel Reeves should come to Cornwall to see for herself the struggles faced by many pensioners, some of whom rely on food banks to get by.”
John Lloyd, from Letchworth in Hertfordshire, is on the other side. John, 84, has been married to Anita for 62 years. Founder of a successful double-glazing company (Kindlelight Windows), his retirement is supported by income from various pensions built up during his working life. “We’re not going to stop paying,” he says. “We live in a four-bedroom house and if things go to hell with this Labour government, we can always downsize.
“But what lies behind all this is duplicity. On the one hand, Labour is happy to take money from pensioners, claiming the country’s finances are in a mess. But on the other, it is only too happy to pay huge sums of money to public sector employees to keep the favour of the unions.”
Her view is shared by many. Maggi Warner, 75, a retired personal assistant from Yate, south Gloucestershire, describes the “raid” on pensioners as “despicable”. Married to Barry, 78, who worked in the travel industry, Maggi says the removal of the benefit is a “low blow”. “We pensioners need our voices heard within government,” she adds.
Maggi is absolutely right. Retirees should be represented in the government (Baroness Ros Altmann would be a brilliant voice).
Twenty-two organisations have written to Reeves calling on him to stop the winter fuel payment restriction. The charity Independent Age has coordinated the letter and is urging pensioners to email their MP and express their anger at the move. It is also urging them to check whether they are eligible for pension credit by visiting gov.uk/pension-credit/how-to-claim.
I fear Reeves is not willing to make a change.
The subway is a shadow of what it once was
Serious accounting errors made five years ago at Metro Bank have undermined its financial strength
Metro Bank was a force for good when it was launched 14 years ago. However, it is now a shadow of its former self due to serious accounting errors made five years ago that undermined its financial strength.
Although the bank is moving closer to financial stability after securing £925m of emergency refinancing last autumn, the cost has been high. Chief Executive Dan Frumkin has given up many of the things that set Metro apart from traditional banks as he has cut costs.
Its commitment to seven-day-a-week face-to-face banking has vanished, with most of its 76 branches no longer open on Saturdays and Sundays. Weekday opening hours have also been reduced, although, in Metro’s defence, its branches are open longer than most of its rivals.
It has also exited the credit card market, meaning affected customers will have to find a new card issuer in September when their accounts are closed. Some people I have spoken to are upset by Metro’s decision.
In addition, personal bank account customers complain that they cannot use a post office to conduct basic banking transactions, unlike those who have accounts managed by traditional major banks.
Coupled with the recent sale of £2.5bn of mortgages to NatWest, Metro is becoming a one-stop shop whose customer-centric USP is rapidly diminishing.
The only bright spot on the horizon is that new branches continue to open (Chester and Gateshead are planned for late spring next year).
More importantly, Frumkin appears to have saved the bank from a financial crisis. annihilation.
M&S bank has been on the edge of its latest communication to some credit card holders. The letter, dated 29 July, informs customers that interest rates will rise on 24 October: from 21.9 to 23.9 per cent on purchases and balance transfers (from 27.9 to 29.9 per cent on cash payments).
This contradicts the previous email on interest rate changes which informed cardholders that interest rates would increase at the end of March from 21.9 to 24.9 percent (from 27.9 to 29.9 percent for cash).
Not even Chancellor Rachel Reeves, adept at manipulating numbers, would be able to present a real decline as an increase.
M&S bank was invited to clear things up and asked me for evidence, which I duly sent to them (the two letters sent to cardholder Jenny Wall in Birmingham).
He then blamed the problem on a “technical error.” As for Jenny, she was told she would receive a reply within five days. “Pants,” I said.
Before Thursday’s 0.25 percent cut in the base rate to 5 percent, pundits were divided on whether the Bank of England would stick to its stance or change it: 60 percent predicted a cut, the rest predicted no change. Those who favored the correct stance were right.
While rate cuts are not good news for savers, the reduction (the first in four years) is welcome, especially if it helps stimulate both the UK economy and the country’s stock market, which did not react positively to the news.
I predicted that the base rate would remain at 5.25 per cent and that if I was wrong I would make a £50 donation to charity. The donation, which was supplemented by an in-kind donation, was made to Prostate Cancer UK.
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