Rachel Reeves’ tenure as Chancellor of the Exchequer has got 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 loaded with financial poison as she announced a wicked curtailment of the winter fuel payment which will result in ten million pensioners no longer receiving the benefit, worth up to £300.
As a result, those people who have reached state pension age in England and Wales will now only receive the 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 make their own rules).
Rachel Reeves ’ update on the country’s fragile public finances, given to the House of Commons six days ago, was loaded with financial poison
The Chancellor announced a wicked curtailment of the winter fuel payment which will result in ten million pensioners no longer receiving the benefit, worth up to £300
The announcement means that up to 1.2million financially-challenged pensioners who are eligible for pension credit but who do not claim it (either through pride, unawareness or an inability to go through the application process) will miss out. As will many who just fail to qualify for the benefit, but whose finances are mightily stretched. My mailbox has been overwhelmed by readers spitting blood over Reeves’ move.
They feel that pensioners, who have no representation in government, have been unfairly picked on. I spent five hours on the phone to readers who will lose the benefit. For some, its loss will put more pressure on already fragile finances. For others, it will make little difference, but they feel betrayed after Labour had vehemently denied, pre-election, that the payment would be means-tested.
Up to 1.2million financially-challenged pensioners who are eligible for pension credit but who do not claim it (either through pride, unawareness or an inability to go through the application process) will miss out
In the first of these two camps sits 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 age 60, was not paid until 66 because of the equalisation of state pension age for men and women. Now, she will lose her fuel payment.
‘You work hard for 40 years in a sector which does not pay well,’ says Julia. ‘You put a little aside for a rainy day, struggle to get by and then this woman walks into Number 11 Downing Street and, without an ounce of sympathy, decides to make pensioners like me worse off.’
She adds: ‘Politicians are so out of touch. Rachel Reeves should come to Cornwall to see with her own eyes the hardship that many pensioners face – some relying on food banks to help them get by.’
John Lloyd, from Letchworth in Hertfordshire, sits in the other camp. John, 84, has been married to Anita for 62 years. Founder of a successful double-glazing company (Kindlelight Windows), his retirement is underpinned by income from several pensions set up during his working life. ‘We won’t miss the payment,’ he says. ‘We live in a four-bedroom house and if things go to hell in a handcart under this Labour government, we can always downsize.
‘But it’s the duplicity of it all. On the one hand, Labour is happy to take from pensioners, claiming the country’s finances are in a mess. But on the other, it’s quite happy to pay huge sums of money to public sector employees to keep in favour with the unions.’
His view is shared by many. Maggi Warner, 75, a retired personal assistant from Yate in South Gloucestershire, describes the ‘raid’ on pensioners as ‘despicable’. Married to Barry, 78, who worked in travel, Maggi says the removal of the benefit is a ‘cheap shot’. ‘Us pensioners need to have our voice heard inside government,’ she adds.
Maggi is quite right. Pensioners should be represented inside government (Baroness Ros Altmann would be a brilliant voice).
Twenty-two organisations have written to Reeves calling on her to halt the clampdown on the winter fuel payment. Charity Independent Age has co-ordinated 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 qualify for pension credit by visiting gov.uk/pension-credit/how-to-claim.
I fear Reeves is not for turning.
Metro’s a shadow of former self
Serious accounting errors made five years ago at Metro Bank have undermined its financial strength
Metro Bank was a force for good when it launched 14 years ago. Yet it is now a shadow of its former self because of serious accounting errors made five years ago which undermined its financial strength.
Although the bank is edging closer to financial stability after securing £925 million of emergency refinancing last autumn, it has come at a heavy price. A lot of the things that differentiated Metro from the rest of the high street banks have been forgone as chief executive Dan Frumkin has cut costs.
Its commitment to seven-day high street banking has gone, with most of its 76 branches no longer opening on a Saturday or Sunday. Weekday opening hours have also been reduced although, in Metro’s defence, its branches are open for longer than most rivals.
It has also exited the credit card market, leaving affected customers to find a new card issuer in September when their accounts are closed. Some of those I have spoken to are annoyed by Metro’s move.
In addition, personal bank account customers complain that they cannot use a post office to do basic banking – unlike those with accounts run by the mainstream high street banks.
Together with the recent sale of £2.5 billlion of mortgages to NatWest, Metro is becoming something of a one-trick pony whose customer focus USP (unique selling point) is rapidly diminishing.
The only light on the horizon is that new branches continue to be opened (Chester and Gateshead outlets are planned for late spring next year).
More importantly, Frumkin appears to have saved the bank from financial annihilation.
M&S Bank has got its knickers in a twist in its latest communication to some credit cardholders. Dated July 29, the letter informs customers that interest rates are rising on October 24 – from 21.9 to 23.9 per cent on purchase and balance transfers (27.9 to 29.9 per cent on cash payments).
This contradicts the previous mailing on interest rate changes which informed cardholders that interest rates were rising in late March from 21.9 to 24.9 per cent (27.9 to 29.9 per cent for cash).
Even Chancellor Rachel Reeves, an expert in fudging numbers, would be unable to present an actual decrease as an increase.
M&S Bank was invited to clarify matters. It asked for evidence, which I duly sent them (the two letters sent to cardholder Jenny Wall in Birmingham).
It then blamed a ‘technical error’. As for Jenny, she has been told she will get a response within five days. ‘Pants,’ I say.
Prior to Thursday’s 0.25 per cent cut in base rate to five per cent, experts were split on whether the Bank of England would stick or twist: 60 per cent predicting a cut, the rest forecasting no change. The twisters got it right.
Although 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 UK stock market which didn’t react positively to the news.
I predicted that base rate would stay at 5.25 per cent and that if I was wrong, I would make a £50 donation to charity. The donation, topped up by gift aid, has been made to Prostate Cancer UK.
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