Four important things for your wallet that also happened this week
And not all of them were bad
While we’ve been watching the wheels come off in Westminster a whole heap of important events have been swept under the carpet in favour of Brexit coverage.
Some seem to be suspicious in their timing, as if it were a good week to release bad news. Others though, may have a lasting beneficial effect on your wallet.
Here’s what’s happened and why you need to know about it.
Older couples to lose £7,000 a year
The government has been accused of “sneaking out” benefits changes for older couples that could cost them thousands of pounds a year.
Announced by the Department for Work and Pensions barely 24 hours before this week’s big Brexit vote on Tuesday, the way the poorest pensioners will receive state support – known as pension credit – will change.
Until now, pension credit could be paid to couples when one is retired and the other is still under the state pension age. But according to an innocuous looking “pensions update” from Guy Opperman, under secretary of state for pensions and financial inclusion, published late on Monday, plans to restrict the benefits received until both partners are over 65 will now come into force for all new claims from May.
Originally devised in 2012, the plan is likely to see older couples lose so much money because universal credit – which they will probably be receiving while of working age – is usually worth significantly less than pension credit.
According to Steve Webb, the former pensions minister on whose watch the reform was devised, the rate of universal credit for a couple in 2019/20 will be about £6,000 a year compared with a rate of almost £13,275 for pension credit.
Cost of living eases
Believe it or not, everyday life got slightly cheaper last month as the Office for National Statistics revealed the rate of inflation measured by the Consumers Prices Index, or CPI, fell from 2.3 per cent in November to 2.1 per cent in December.
Based on the varying prices of a “basket” of goods and services bought by the average household, the drop was thanks to cheaper petrol and air fares.
Consumers are being urged to save that mini-saving wherever possible in a bid to protect themselves from economic uncertainty.
“Consumers will appreciate the continued southward trend of inflation as it comes in touching distance of the Bank of England’s target of 2 per cent,” said Alistair Wilson, head of retail platform strategy at Zurich.
“Yet this will be tempered by continuing uncertainty, which will impact household spending – not least because of the likely impact to the pound caused by Brexit.
“Given the unpredictability of the current economic and political climate, people should take a moment to analyse their finances and consider the best ways to protect their money.
“In volatile markets, it’s easy to revert to cash savings, but in the long term this can leave consumers financially vulnerable.
“Those who can afford to should consider feeding small amounts into a pension fund or stocks and shares ISA to grow their wealth in the most tax efficient way and build a comfortable nest egg.”
House prices rise (slightly)
New data out this week showed average house price growth in the UK rose very slightly to 2.8 per cent a year in November 2018 from 2.7 per cent in October.
The figures mean the average property price is now £231,000, up £7,000 in 12 months.
This marginal overall rise, which doesn’t account for seasonal adjustments, may come as a surprise to some in such a period of economic and political uncertainty. Most experts attribute the current trend to a continued lack of supply keeping prices just about above the water line in an otherwise struggling market.
Commenting on the figures, Dilpreet Bhagrath, a mortgage specialist at online broker Trussle, said: “With the current uncertainty caused by Brexit, many sellers are reluctant to put their homes on the market, adopting a ‘wait and see’ approach which only continues to exacerbate the under-supply issue in the housing market.
“However, buyers, who are able to navigate the current market and are ready to purchase, are unlikely to be put off by this slight rise in house prices.
“For those first-time buyers who are worried about the current market uncertainty, opting in for a fixed-rate mortgage deal will ensure you know how much you’re paying for your mortgage each month and avoid any instability over the coming months.
“Other factors should also be considered when determining the right mortgage deal for you, including both your current circumstances and future plans.”
New law will save tenants £100s
While the House of Commons was otherwise occupied, the House of Lords at least seems to have recognised that there are other matters that need attention if the nation isn’t to crumble to dust while we wrestle with the Brexit debacle.
This week, the Lords approved the Tenant Fees Act, which will now come into force on 1 of June this year.
The new law is designed to significantly reduce the average £337 charged to each UK tenant each time they move into a privately rented home, banning fees for activities including credit checks, inventories, cleaning services, references, administrative charges and gardening costs.
In fact, the act bans tenants from being required to pay all but a small amount of exempted fees as a condition of the “grant, continuance, assignment, termination or renewal” of an assured shorthold tenancy or licence agreement.
One alternative rental business, Dlighted, calculates the ban will cost the average letting agency more than £60,000 over the next two years.