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Are You Eligible for Additional Childcare Support?

Thu, 08 Aug 2024 11:40:00 GMT

Starting September 2024, parents in England can get 15 hours of free childcare per week for children as young as nine months, with phased expansions to support working parents and reduce childcare costs.

Parents in England can now apply for 15 hours of free childcare per week for children as young as nine months, starting in September 2024. This initiative aims to support working parents by reducing childcare costs and enabling more parents to return to work or increase their working hours.

Available free childcare

The free childcare support in England is being introduced in phases, with some free hours already in place:

From April 2024 : 15 hours per week for two-year-olds
From September 2024 : 15 hours per week for nine-month-olds
Already in place : 30 hours per week for three and four-year-olds
From September 2025 : 30 hours per week for all children under five

The amount of free childcare available depends on the child’s age and the parents’ employment status.

Eligibility based on child’s age and parental status

Working parents :

15 hours for two-year-olds (from April 2024)
15 hours for nine-month-olds (from September 2024)
30 hours for three and four-year-olds (already in place)
30 hours for all children under five (from September 2025)

To qualify, parents must typically earn between £9,518 and £100,000 annually.

Parents on benefits

15 hours for two-year-olds
15 hours for three and four-year-olds

Non-working parents may still qualify for 30 hours if their partner works or they receive benefits. Additionally, parents starting or restarting work within the next 31 days are eligible to apply.

Unsure if you’re eligible? You can use the childcare calculator on GOV.UK for help.

Application process

Parents should apply before the start of the term when their child becomes eligible. Applications for children aged nine months to 23 months are now open for the September term. It’s advised to submit your application as soon as possible and eligibility must be reconfirmed every three months.

Parents of eligible two, three, and four-year-olds for the September term can also apply. Once approved, parents will receive a code to give to their registered childcare provider.

What you need to apply

To apply, you’ll need:

National Insurance number
Unique Taxpayer Reference (UTR) if self-employed
UK birth certificate reference number for the child (if available)
Date you started or are due to start work (approximate if more than three months ago)

The application process typically takes around 20 minutes, and you may find out if you’re eligible immediately, though it can take up to seven days. Once approved, you’ll receive a code for free childcare that you’ll need to give to the childcare provider.

Usage and coverage

Free childcare hours are typically used over 38 weeks annually (school term time). Some providers may offer to spread the hours over 52 weeks, reducing the weekly hours accordingly.

Government and provider costs

The Government has increased the hourly rates it pays to childcare providers, but these rates may not cover the full costs. This can lead to additional charges for extras such as meals, nappies, and sun cream. These additional costs are voluntary, and parents can choose to provide their own supplies to keep childcare free.

Regional variations

Different schemes are in place across Scotland, Wales, and Northern Ireland, with all three and four-year-olds entitled to some free childcare in these regions. For specific details, parents should refer to their local Government’s guidelines.

Additional financial support

Parents can also benefit from the UK-wide tax-free childcare scheme, where the Government adds £2 for every £8 paid into an online childcare account, up to £2,000 per child per year (or £4,000 for children with disabilities). The Care to Learn scheme offers further support for student parents under 20 at the start of their course.

Additionally, if you’re facing financial difficulties, explore our debt solutions for guidance and support.

Getting Help With Court Fees

Thu, 22 Feb 2024 18:08:08 GMT

The idea of appearing in court or making an application to court can feel worrying - especially because there are often fees involved.

If money is tight, you may be able to get help with court fees.

It can sometimes be difficult to understand who is entitled to help with court & tribunal fees, so we've put together a quick guide that will help you understand what help is out there, who is entitled to support, and how you may be able to access it.

What are court fees?

If you are going to court - whether it's your decision or not - you'll usually have to pay a fee.

As well as this initial fee, you'll sometimes have to pay a 'hearing fee too. A hearing is usually the second step in the court process - where a judge will be asked to make a legal decision if both sides can't come to a settlement themselves.

Some examples of when you might have to pay a court fee

As you can imagine, courts are there to help settle all kinds of legal issues - so there are lots of different reasons you may have to pay county court costs.

More often than not, these fees crop up when people are going to family court to discuss divorce, maintenance, or parental rights relating to a child. Also, fees are usually due when discussing financial issues - such as setting aside a County Court Judgement (CCJ) or when debt collection issues reach a court level.

Getting help with court fees

There are two kinds of support you can get with the fees that relate to court or tribunal cases - legal aid and support with court costs through the government's EX160 form.

Legal aid is only available for certain

Boost your income

When it comes to cutting your expenses, there is only so much you can do. But with no limit to the amount of extra cash you can earn, making an effort to boost your income can be the missing link you need to help you meet your essential costs.

If possible, ask for a raise at work, start a blog, monetise a hobby or interest, pick up a part-time job, become an online tutor, or sell unwanted clothes, with the internet a great place to find a side hustle or money-making venture to work around your schedule.

This can help you repay your debts, build your savings, or just bridge the gap between your finances and your essential costs when you find yourself struggling to make ends meet.

Make a plan

The only way to make a positive difference to your finances is to make a plan (and stick to it).

To get started, assess your current financial situation and set yourself a series of short-term goals, such as starting an emergency savings fund, sticking to a budget, or clearing a percentage of your debt.

Whether you have your sights set on becoming a homeowner, retiring early, or clearing your total debt, making a plan can help you set mini milestones and track your progress until you meet your ultimate goal.

Check if you qualify for financial support

In October, every household in the UK will receive £400 and pensioners claiming Winter Fuel Payment will receive £300 to help with the cost of rising energy bills as part of a £21 billion cost of living package.

If you are still worried about meeting your essential costs despite cutting costs and qualifying for a cost of living payment, however, it is worth checking if you are eligible for financial support.

To find out what financial support you are entitled to and how to make a claim, contact your local council or visit the GOV.UK website.

Rebuilding your credit score

Tue, 10 Oct 2023 17:33:58 GMT

Nothing is forever, and even the toughest of times can turn on a hairpin to send you on a journey back towards a state of stability and balance. Deciding to rebuild your credit score after a period of financial upheaval can feel like an impossible task, but we’re here to tell you that it isn’t. It’s not quick and it takes determination, but you know what? You can do it.

To help you on your new journey to an improved credit score, we’ve put together this handy guide to help you understand what a credit rating is and how you can improve it moving forward.

What is a credit score?

A credit score is a simplified overview of your credit history giving lenders and prospective loan providers a general idea of your previous credit repayments and reliability. A higher credit score indicates a lower risk for lenders, which can result in better interest rates and loan terms. Conversely, a lower score can limit your borrowing options and make it more difficult to secure credit. Therefore, rebuilding your credit score should be a priority if it’s taken a hit.

In the UK ,credit scores are calculated by three credit reference agencies: (CRA) Experian, Equifax, and TransUnion, who each hold secure data on individuals credit history. This is built up whenever you take out credit, such as using credit cards, paying off loans or paying for contracts (such as your phone contract or subscriptions) this score can be negatively affected if you have previously failed to make repayments or have defaulted on prior credit.

Your credit score can affect your ability to get future credit, such as taking out a mortgage, loan or applying for credit cards, and can affect the types of loans or repayment options you can be offered by future lenders.

Reviewing your credit score

A credit score is created when you first create a line of credit, this happens when you first take out a loan or sign a financial agreement such as taking out a phone contract, financing a payment or taking out loans, such as bank loans.

Once a line of credit is opened, all future credit taken out will contribute towards this overall score. If you have never taken out any form of credit or repayment option, your credit score will remain blank.

In 2021, data gathered by Experian found that almost seven out of ten Brits (69%) didn’t know their credit score.

Start by obtaining a free copy of your credit report from each of the three major credit bureaus – TransUnion, Experian, and Equifax. Carefully review your reports to ensure that all information is accurate and up to date. If you notice any errors, contact the credit bureau to dispute the inaccuracies.

How do I check my credit score?

Currently in the UK, there are three big players for checking on your score and these are Clearscore, Experian and Equifax.

Clearscore – Clearscore founded in July 2015, was the UK’s first provider of free credit scores and reports, they also offer consumer advice and protection services. The company earns revenue from financial institutions who pay Clearscore when new customers join them from the service similar to a referral system.

Experian – Experian remains one of the longest running credit reporting companies. Founded in 1996 and based in Ireland, the company operates across many countries and is one of the most recognised credit reporting agencies in the UK. Like Clearscore, the company also offer additional credit services, including identity protections and web data protections.

Equifax – Equifax is the lesser known of the three main credit reporting agencies, similar to Experian they offer an initial free trial period of 30 days but charge £10.95 after this trial period has ended.

How can I build my credit score?

A credit score is built up whenever credit is taken out and paid off. Credit could include using and paying off credit cards, financing options such as phone contracts and financing through store cards or financial agreement. The more payments made on time, the higher your score, and missing payments will bring your score down.

If you’ve been excluded from new credit for a while because of a bad credit score, here are some simple ways to improve your credit score:

Registering on the electoral roll :
Simply being on the electoral roll and confirming your identity and home address can help improve your credit score. It’s free and simple to do and a good place to start in improving your credit score.

Long standing active accounts:
Having a long-standing active account can suggest to a creditor that you are good at managing your accounts and managing your finances over time. This is why it’s suggested not to switch accounts when attempting to take out credit or receive a loan such as a mortgage.

Paying Bills on Time
Your payment history makes up 35% of your credit score, making it the most critical factor. Make sure to pay your bills on time whenever you can, including rent, utilities, and any outstanding debts. Setting up automatic payments and alerts can help you stay organised and ensure that you don’t miss any due dates.

Keep Credit Card Balances Low
Your ‘credit utilisation ratio’, the amount of credit you’re using compared to your total available credit, accounts for 30% of your credit score. Aim to keep your credit card balances low, ideally below 30% of your available credit. This demonstrates responsible credit usage and can help boost your credit score.

Apply for a Secured Credit Card
If you’re struggling to get approved for a traditional credit card, consider applying for a secured credit card. These cards require a cash deposit, which serves as collateral and typically determines your credit limit. By using a secured card responsibly and paying your balance in full each month, you can demonstrate your creditworthiness and improve your credit score.

Diversify Your Credit Mix
Lenders like to see a diverse mix of credit types, such as instalment loans (e.g. car loans, mortgages) and revolving credit (e.g. credit cards). Adding a variety of credit accounts can have a positive impact on your credit score, but only do so if you can manage the payments responsibly.

Avoid Applying for Multiple Credit Accounts
Each time you apply for credit, an inquiry appears on your credit report, which can temporarily lower your credit score. Avoid applying for multiple credit accounts within a short period to minimise the impact of inquiries on your credit score.

What can negatively affect my credit score?

Your creditor score is negatively affected whenever late payments, arrears or defaults are reported on your account. This can include failing to pay off an account on time or not paying off a credit card in full.

There are also certain forms of credit, such as payday loans and short-term lending options, that can negatively impact credit score when taken out.

Credit checks being run on your account can also negatively affect your overall score so be mindful before applying.

Other facts can also affect your credit score, these include:

Court records such as County Court Judgements (CCJs), Defaults and debt plans such as IVA’s and Bankruptcy agreements will negatively affect your credit score for a period of up to 6 years.

Spending habits and reliance on credit can also have an adverse effect on your credit score. If you have high credit balances and are often close to your credit limit this may suggest to lenders a heavy reliance on credit.

Do I need to pay to check my credit score?

Previously, your credit score could only be accessed through paid credit check agencies: Experian, Equifax and TransUnion, however, since 2014 Clearscore has allowed people to access free credit scores and reports through their app and website.

Other services such as Experian and Equifax offer premium services and features but generally also allow you to check your basic credit score for free. Looking at in depth reports and further features will require a premium account, which generally costs a monthly subscription ranging in price.

What is a bad credit score?

Though each credit check agency uses their own unique measuring system to calculate credit score, they all follow a similar format. Running from very poor to excellent, a typical good/excellent credit score can range from around 850 – 900 for a good score to 950-999 for excellent.

A very bad to poor credit score can range from 550-700 with a fair score being between 700 – 850. These metrics and numbers can vary significantly from credit agencies and also may not be fully accurate to your actual credit history as they are just estimates.

According to statistics provided by Experian, the average UK credit score is 759.

Is it worth paying for Experian?

Though Experian offer an initial free trial service of 30 days and allow you to view your credit score and a summary of your borrowing always without charge. Many of the services features are premium and require monthly subscriptions to access. These range in tiers and can cost from £6.99 up to £14.99.

Ultimately paying for a premium Experian account will depend on how closely you need to monitor your credit record. Since a general overview of your credit score is free, if you only require a cursory look at your credit report then these premium features aren’t required

Can Experian boost or lower your credit score?

There are features exclusive to Experian that can affect your overall credit score, such as Experian Boost that has the potential to instantly increase your credit score using open banking to review your spending habits, with an uplift applied if you can show examples of good spending and examples of recuring payments such as subscription services and monthly payments.

These include tv subscriptions, phone contracts and financing options like Buy Now Pay Later that can all show a history of responsible lending and being able to make regular recuring payments.

This could have an instant boost to your credit score if you have examples of the above listed payments.

Be patient and persistent :

Rebuilding your credit score won’t happen overnight. It takes time, discipline, and consistent effort to make a difference. Remember that your credit score is just one aspect of your financial health, and focusing on long-term financial goals, such as saving for emergencies and retirement, will also contribute to your overall financial stability.

Rebuilding your credit score after can feel like an uphill battle, but with patience and perseverance, you can make a positive difference. By following these tips and making a conscious effort to practice responsible financial habits, you’ll be well on your way to a stronger credit score and a brighter financial future.

Attachment of Earnings (AOE) all the facts in 2023

Tue, 10 Oct 2023 17:02:16 GMT

What is an Attachment of Earning Order?

An Attachment of Earning Order (AEO) is a legal process that allows creditors to recover unpaid debts from your earnings. Unlike Direct Earnings Attachments (DEAs), which are used to recover benefit overpayments, AEOs can be applied debts such as court fines, council tax, and child maintenance payments.

How does an Attachment of Earnings Order work?

If a creditor has obtained a court order for an AEO, your employer will be required to deduct a portion of your earnings and send it to the court or creditor until the debt is paid off. The amount that can be deducted will depend on how much you earn and your personal circumstances, but there are limits to how much can be taken.

What earnings can be taken as part of an Attachment of Earnings Order?

The earnings that can be taken as part of an AEO include wages, salary, bonuses, overtime pay, and statutory sick pay. However, certain payments such as statutory maternity pay and guaranteed minimum pension cannot be included.

How much of my earnings can be taken under an Attachment of Earnings Order?

The limits for how much can be taken are based on a sliding scale and take into account your income, tax, and National Insurance contributions.

The following limits apply:

If you earn less than £380 per week, no more than 0% of your earnings can be taken.
£380 and £520 per week, no more than 1% of your earnings can be taken.
£520 and £720 per week, no more than 3% of your earnings can be taken.
£720 and £900 per week, no more than 5% of your earnings can be taken.
£900 and £1,440 per week, no more than 7% of your earnings can be taken.
£1,440 per week, no more than 12% of your earnings can be taken.

It’s important to note that these figures are subject to change and may vary depending on your individual circumstances.

Does my employer need to be informed of an Attachment of Earnings Order?

Yes, your employer will be notified if an AEO is applied to your wages and will be responsible for deducting the appropriate amount from your earnings and sending it to the creditor or court.

Can multiple Attachment of Earnings Orders be applied to my warnings?

Yes, multiple AEOs can be applied to your earnings. However, the total amount that can be deducted from your earnings cannot exceed the maximum limit set by law.

Will my credit score be negatively impacted by an Attachment of Earnings Order?

An AEO does not appear on your credit report and will not directly affect your credit score. However, the initial County Court Judgement (CCJ) filed to enact the AEO will be recorded, and this will likely appear on your credit report. This may make it more difficult for you to obtain credit in the future, as it indicates that you have had difficulty managing your debts. This will be removed from your credit report within six years of first being ordered.

Can I be exempt from an Attachment of Earnings Order?

There are certain circumstances where you may be exempt from an AEO. For example, if you are already making repayments through a debt management plan, the court may decide that it is not necessary to apply an AEO.

Additionally, if you are on a low income or have dependents to support, the court may reduce the amount that can be deducted from your earnings.

It’s important to seek advice from a regulated debt advice provider if you are struggling to repay your debts. They can provide you with tailored advice and support to help you manage your debts and potentially avoid the need for an AEO.

Mums with Debt are one of the UK’s most trusted FCA regulated and recognised debt advice providers, if you feel you need help with your debts, head over to our site to see if we can help you.

How can I avoid an Attachment of Earnings Order?

The best way to avoid an AEO is to try to repay your debts in full and on time. However, if you are struggling to make repayments, you can speak to a debt advice professional for help to negotiate repayments with your creditors and create a plan to manage your debts.

If you have received a court summons for a debt, it’s important to attend the hearing and present your case to the judge. The judge may be able to offer alternative solutions to an AEO, such as a repayment plan or a debt relief order.

In some cases, it may be possible to challenge an AEO if you believe that it has been applied incorrectly or unfairly. However, this can be a complex and time-consuming process, and it’s important to seek legal advice before pursuing this option.

What are my options if I have an Attachment of Earnings Order in place?

If you have an AEO in place, it’s important to keep up with the repayments and ensure that the correct amount is being deducted from your earnings each month. Failure to do so can result in further legal action, such as a bailiff visit or a charging order on your property.

If you are struggling to make the repayments, it’s important to seek advice from a debt management professional. They can help you negotiate a more affordable repayment plan with your creditors or offer alternative debt solutions, such as an individual voluntary arrangement (IVA) or bankruptcy.

Understanding your proposal

Wed, 01 Feb 2023 19:12:47 GMT

At Mums with Debt, we understand the decision to enter an Individual Voluntary Arrangement (IVA) or another debt solution isn’t one that’s taken lightly.

We also understand that getting your head around a legal document when you have a host of other worries on your plate can also be daunting.

Sound familiar? That’s OK.

We’ve helped to guide thousands of people through the process of entering an arrangement by making understanding the proposal just that little bit easier.

Yes, your proposal is a legal document and reads as such, but don’t let that stop you on your journey to regaining financial control.

What is my proposal?

Your proposal is a document that, if approved, may form a legally binding contract between you and the people you owe money to – also known as creditors. The proposal is at the heart of your debt arrangement and can be referred to during the duration of the arrangement to ensure all terms are being adhered to both by yourself and your creditors.

As the proposal is a legal document it is written in a way that may be confusing or hard to understand but in general, it outlines your offer to creditors and sets out the terms of your agreement.

The proposal is prepared by a case officer and an Insolvency Practitioner (IP). It is the responsibility of the case officer to ensure your proposal includes all information about your financial circumstances.

Once you’ve completed your verification call, we send you a welcome pack which helps to explain your arrangement further and your dedicated case officer is also on hand to offer support if you have any questions about what you’re being asked.

What will my proposal include?

There’s no escaping the fact that your proposal is a long document with a lot to understand, which can seem daunting. However, it’s important to read the proposal as signing it means that you agree to all the terms mentioned.

But just what exactly can you expect from your debt arrangement and what does it all mean?

The proposal sets out the terms of your arrangement and will include things such as the length of time you’ll be in the agreement and how much of your debt you will repay. It will also include a full financial statement that highlights how much your creditors are likely to receive.

Here we break down sections of your proposal to help guide you through the process of signing.

Introduction
The introduction of your proposal is straightforward. This is the section where you are admitting that you are unable to repay the debts you owe and that a debt repayment plan like an IVA will provide creditors a greater return than bankruptcy. This section also highlights that Creditfix will manage your arrangement on your behalf and will reference the laws and regulations throughout your proposal.

Nominee and supervisor
This outlines who will be responsible for the management of your arrangement and pledges that the supervisor will monitor and comply with all legislation to ensure the legal running of your arrangement.

Personal details
Your personal details take centre stage in this section of the proposal. It will showcase information about your employment, wages, salary and/or benefits as well as information about debts you owe. This section also includes an admission that you are not able to deal with debt on your own and gives a little more information about your current situation. It’s important you read this section carefully to ensure that we have detailed your situation accurately.

Property/assets/motor vehicles
Again, these sections are straightforward and contain detailed information about your property (if you are a homeowner) as well as information about any assets of value and any motor vehicles you may own and how these may, or may not, factor into your arrangement.

There’s often a worry that you’ll be forced to sell your home or car by entering a debt solution but that’s not always the case. If you’re a homeowner entering an IVA, for example, it’s important to keep an eye out for clause 54 for reassurance that your property won’t be at risk during your IVA.

Pensions
If you are entering an IVA and worried about how your arrangement could affect your pension, this is a section to keep an eye out for. This section states that pensions are typically excluded from IVAs, however, if you receive a lump sum payment during the IVA term it will be included in the arrangement.

Contributions
This is the section of the proposal that outlines how you will participate in the arrangement. It’s important to take note of this section as it is where you agree to the details of your long-term financial commitment. Here you will find the length of your arrangement and the amount you will pay each month based on your affordability.

You will also find information about an annual review, which will require you to take part in a yearly income and expenditure check to ensure your payments remain affordable as well as steps to take if you find it difficult to maintain your payments.

Redundancy
When you enter an arrangement like an IVA, you are signing up for an initial 60-month payment plan. Understandably, a lot can change in that time, including your employment status.

This section offers guidance about the steps to follow if you are made redundant during your IVA term – for example, you will need to contact us within 14 days to inform us of your job loss. It will also include details of what will happen with redundancy pay.

Breach/failure to comply/termination of agreement
There are many ways in which your arrangement can be adapted to your changing circumstances, but you must remember that we can only help you if you keep us informed. If you don’t, you could be in breach of your contract. This section highlights ways in which your arrangement could face a breach or potentially fail – including failure to co-operate and failure to comply – as well as information about how to terminate your agreement.

Fees/expenses/duties of supervisor
It’s important to take note of this section as it outlines the fees that you will pay for your arrangement. The law governing your debt solution provides for us to charge two separate fees in relation to the different elements of your arrangement. These fees are taken from your contributions throughout the duration of your arrangement so you will never need to pay over and above your monthly payments.

General clauses
Understandably, there are some things that we’re required by law to mention in your proposal. This section will include things such as whether you’re subject to certain court proceedings or whether or not anyone has guaranteed any of your debts or contributions.

It also refers to whether you have made certain payments within certain time limits before entering into your arrangement which could be challenged by if you were then made bankrupt.

Distribution
This section outlines when your monthly contributions will be distributed as payments to your creditors. We will make monthly payments to your creditors starting from either 28 days after your arrangement is approved, or the date when the first contribution is received – depending or whichever comes later.
Satisfactory conclusion of arrangement

If you successfully make all of your payments, we will complete the arrangement and all paperwork for creditors and issue you with a Certificate of Completion. You’ll then be free of unsecured debt.
Proposal terms addressing the requirements of SIP3

This part of the proposal confirms that you have been advised of all of the available options to you and that you agree a debt solution like an IVA is your preferred solution.

If you have any concerns or queries about your proposal, we’re always happy to offer further advice. The most important thing is that you’re comfortable with the arrangement you’re signing up for and we’re here to help make that process as simple as possible.

You can contact us and speak directly with a member of the caseworker team on 0800 048 9498.

How to manage your money in a recesion

Fri, 26 Aug 2022 09:46:57 GMT

The ongoing cost of living crisis is being driven by high inflation and even higher costs. But with further price hikes expected and the economy on track to fall into a recession within a matter of months, you might be wondering what this means for your finances.

It’s normal for the economy to experience extreme highs and lows from time to time, but by sitting back and waiting for a recession to blow over, you could be putting yourself and your finances at risk.

In this blog, we’ll let you know how to manage your money before and during a recession so you can protect your pennies and avoid making minor money mistakes with major consequences.

Reduce your spending

With a recession brewing, reducing your spending can help you get a firm grip on your finances and put some spare cash aside for unexpected expenses, such as a job loss or drop in income.

It can also help you live within your means and get better at budgeting which are skills that can have a positive impact on your finances before, during, and after a recession.

This can be easier said than done but by thinking about how your finances would fare if the economy was to slip into a recession tomorrow, for example, it can inspire you to slash your spending and cut costs wherever you can.

From cancelling unused subscriptions and selling unwanted clothes to switching to a discount supermarket and signing up for loyalty programmes, there are countless ways to reduce your spending that can help you spend less than earn and, more importantly, recession-proof your finances.

Bulk up your savings

The lead up to a recession is the perfect time to do some damage control and bulk up your savings.

Whether you’re worried about keeping your job or just want to ensure you’re prepared for the worst possible scenario, it can help you meet your essential costs and avoid being forced to miss a rent or mortgage payment.

The figure you should be aiming for is unimportant but most financial experts agree that a minimum of three to six months’ worth of living expenses is enough to bridge the gap when the economy, or your job, is hanging in the balance.

Don’t panic

In the midst of a cost-of-living crisis, it’s normal to be worried about what a recession could mean for you and your finances. But with everyone in the same boat, there’s no need to panic.

There is nothing you or – despite their best efforts – the government can do to prevent the economy from falling into a recession and panicking will only exacerbate any negative feelings you have and make things worse than they need to be.

With financial experts confident a recession will take place before the end of the year, getting your finances in order and remaining cool, calm, and collected will put you in the best possible position to come out on the other side unscathed.

Clear your debts

When a recession hits, it can be difficult to know whether you should tackle your debts or wait until the economy finds it feet again. But if your income also takes a hit, you can end up not only struggling to repay your debts but sinking even deeper into debt.

With the economy expected to get worse before it gets better, you should aim to clear your biggest debts before you’re left with no choice but to miss a monthly payment as this can have a negative impact on your credit score and you could be threatened with legal action.

With more obligations to cover and creditors only likely to ramp up their collection efforts, it can give you more breathing room in your budget for both essential costs and unexpected expenses.

Budget for everyday and emergency expenses

It might seem daunting but with a recession on the cards, there has never been a better time to get into the habit of budgeting for both every day and emergency expenses.

Whether you just want to set aside some spare cash for the weekly food shop or build a cash cushion for those months when your wages fall short of your essential costs, it can help you get a firmer grip of your finances and keep track of what’s coming in and out.

It can also prevent you from being forced to dip into your savings or overdraft to cover the cost of everyday essentials with this only likely to lead to further financial problems down the line.

Can You Get Tax Credits Overpayment Written Off?

Thu, 11 Aug 2022 11:29:43 GMT

Tax credit overpayments can happen for a few different reasons – but, most commonly, they happen if your circumstances change but you don’t tell HM Revenue and Customs (HMRC) in time.

If you’ve received tax credit payments but your entitlement has changed, you may end up with a tax credit debt.

In this guide, we’ll look at tax credit debts in more detail – including:

What kind of situations can lead to a tax credit debt
Can a tax credit debt be appealed against or written off?
What you should do if you’ve realised you’ve had tax credits overpayments
Some helpful contact details for HMRC

We’ll also answer a few commonly asked questions about overpaid tax credits, so you’ve got all the information you need to take your next steps.

What are tax credits?

Tax credits are a kind of benefit that the government pays to people, either:

if you have children, and/or
you earn under a certain amount

This means there are two different types of tax credit – working tax credit and child tax credit.

Tax credits are ‘means tested’ – which means the government considers your financial circumstances (including how much you earn and how much you have saved) before deciding how much you can get.

You can either claim by yourself or with a partner. If you claim with a partner, your combined income and circumstances will be means tested.

Tax credits are usually paid directly into your bank account every 4 weeks, by a direct payment.

Why might a tax credit overpayment happen?

Overpayments usually happen because of the way that HMRC works out your tax credit entitlement. How much they think you should be paid is based on your financial circumstances the last tax year.

The tax year runs between 6 April and the following 5 April. So, HMRC will look at your circumstances for this period to decide how much you’re going to be entitled to for the following 12 months.

If this estimate is too low, they could end up paying you more that you’re officially entitled to.

Other reasons for tax credit overpayments

Underestimating your following year’s financial circumstances is the most common reason tax credits are overpaid – but there are other reasons.

Late reporting

If you leave it too late to tell HMRC about a change that causes your entitlement to drop, you could get an overpayment. Typical changes might include changes in working hours or a child leaving full-time education.

Under-estimated earnings

If you underestimate how much you’re going to earn for the year, you might end up being paid too much working tax credit.

HMRC delays

If HMRC take too long to process changes they’ve been informed of, they may end up paying you too much.

Claimant error

If you make a mistake on a tax credit claim or renewal form, you could end up with tax credit overpayments.

HMRC error

If HMRC make an error (whether that’s a system problem or a human error) with their tax credits system, you may end up with more than you’re entitled to.

HMRC investigation

HMRC sometimes starts investigations if they feel like someone has tried to misrepresent their circumstances to claim more than they’re entitled to.

Late renewal forms

If your claim form or renewal form is sent to HMRC late, they may end up working off out-of-date information and therefore make a tax credit overpayment.

Do you have to pay back tax credit overpayments?

In short, yes, you have to pay back any tax credit overpayments that have been made.

As far as HMRC are concerned, if you’ve been paid something that you’re not entitled to, it will need to be recovered from you.

As you can see, there are numerous reasons why you might get tax credit overpayments – from HMRC mistakes right through to investigations around possible fraud.

Unfortunately though, it doesn’t matter who is to blame for your overpayment. Whether it’s a problem with the info you give HMRC or something they’ve done wrong, you’ll still be expected to pay any overpayment back.

Not sure why you’ve been overpaid?

Sometimes, a claimant (the person who’s getting the tax credit) will notice that they’ve been (or are being) overpaid. In other cases, the Department for Work and Pensions (DWP) Debt Management team will send you a letter to let you know.

The DWP will usually be the department to get in touch – even though the calculations are done by HMRC.

If you’ve been told that you have tax credit debts but you’re not sure why, you’re within your rights to ask for an explanation. There will be contact details on the letter you’ve been sent – so give them a call and ask for an explanation.

Even if they explain over the phone, it’s a good idea to ask them to explain what’s happened in a letter. This gives you an official record of the problem and makes it easier to show what’s happened if you seek professional debt advice.

What should you do if you notice a tax credit overpayment?

Most of the time, it’s HMRC who notice tax credit overpayments – but you may notice yourself, especially if your circumstances have recently changed.

A change in circumstances could be something as simple as having your contacted hours increased at work, moving in with a partner, or a child leaving home or full-time education.

If you notice that you’re getting an overpayment, it’s a good idea to act quickly. Recent cost of living increases might make it tempting to hold on to the overpayment for now – but you will have to pay it back, and the DWP could even use a debt collection agency if it’s not paid back as quickly as they wish.

Can I appeal the overpayment debt decision?

If you’ve had an explanation about the overpayment but still don’t agree, you can formally ask HMRC to review it.

You’ll need to contact them to ask for this review. You can call the tax credits helpline on 0345 300 3900 – or you can complete and return a tax credit overpayments form (TC846) which you can do wnload from the GOV.UK website .

You usually have around 3 months to make an appeal. It’s worth knowing that HMRC can continue to reclaim your overpayments through your future payments, even if they’re reviewing your dispute.

How long do I have to repay the debt?

As a rule, HMRC say that tax credit claimants that have been overpaid have 30 days to repay the debt.

Don’t worry though, since some overpayment debts can be large, they’ll almost always be willing to discuss a repayment plan with you. If you don’t think you’ll be able to make the full repayment within 30 days, let the DWP or HMRC know as quickly as possible.

You can call HMRC on 0345 302 1429 if you need to let them know.

What are your repayment options?

When you talk to HMRC or the DWP about a tax credit overpayment debt, they’ll usually offer a range of possible repayment plans.

What they’ll talk to you about depends on the amount you owe, but typically the options will include:

Repayment over 12 months: You’ll usually be allowed to pay the amount back over 12 monthly instalments. If you choose this option, they generally won’t ask for any more information.

Repayment over a period between 1-10 years: If the amount isn’t manageable over 12 months, you’ll usually be given the opportunity to repay the debt over a period of of up to 10 years.

As long as you can pay back more than £10 a month or pay the debt off totally in 3-years or less, they usually won’t ask to see any more information. If you can’t pay £10 a month, they might ask to see a monthly budget to help decide how much you can afford.

Repayment over 10+ years: If you can’t realistically pay more than £10 a month, it’s likely that you’ll need a very long time to repay what you owe. Because of this, HMRC will usually ask to see a monthly budget to help you find a repayment amount that’s affordable over 10 or more years.

Is there any chance that a tax credit overpayment will be written off?

Unfortunately, it’s extremely unlikely that any overpayment will be written off.

It’s not totally impossible though.

If you prove to HMRC that you can’t afford to pay more than £10 a month and it’s likely to take more than 3 years for you to pay, they might first agree to put the debt on hold for 12 months.

They’ll do this so they can look again at the debt in 12 months and see if your financial situation has changed for the better. If it has, they’ll talk to you again about what you can afford then. However, if you still can’t afford to make any repayment – HMRC may agree to write off the debt.

Could the debt be written off after 6 years?

When you explore writing off debt online, you’ll often see people talk about a 6 year period – after which some debt is considered to be ‘written off’.

The trouble is, it’s not quite as simple as sitting-it-out with the DWP.

The 6-year period people talk about is relates to ‘ The Limitation Act 1980 ‘. This is a section of UK law that sets out rules for how long someone can take legal action to recover money they are owed.

According to the act, certain debts become ‘statute barred’ after 6 years. Not all debts are covered by this 6-year timeframe, but debts owed to the DWP are included.

So, why aren’t the overpayment debts written off?

It all comes down to how much power the DWP have when it comes to recovering the debt. Like any other creditor (someone you owe money to), the DWP can chase you directly and get a debt collection agency to help – but they can even go a few steps further, taking money that’s owed to them from future payments you get from them.

This means that even if you can’t or won’t pay, they can carry out something called ‘direct earnings attachment’ (DEA) to collect the money from your wages – or even a ‘cross claim recovery’ – taking money owed back from universal credit payments or other benefits you might receive.

So, in theory, the debt could be considered statute-barred after 6 years – but it’s extremely unlikely that the DWP wouldn’t have taken action to get the money back well before that.

Are there any other ways to write off tax credits overpayments?

As you can see, there’s no loophole that will see any overpayment of tax credits written off – and you would have to be in significant financial hardship for at least a year for HMRC to even consider writing off what you owe.

It may be possible to write off some or all overpaid tax credit payments if you explore a suitable debt solution though.

For instance, debts owed to HMRC or the DWP can be included in an Individual Voluntary Arrangement (IVA) . An IVA needs to be set up by an insolvency practitioner (IP) and approved by most of your creditors – but if it is, the IP will take over handling your creditors and you’ll make one comfortable monthly repayment.

Your monthly repayment will be split between each of the creditors you owe – but, when the IVA comes to an end, anything left unpaid will be written off and you’ll be free to rebuild your finances again.

Kids eat 'free' or for '£1'

Mon, 01 Aug 2022 14:15:25 GMT

This is a regularly-updated list of the latest restaurant vouchers, deals, and offers for dine-in and takeaway. Restaurant deals are still a bit thin on the ground at the moment, but here's what we've scouted. Most promotions have restrictions, so check the T&Cs to ensure you can use the offer on the day you want to go.

Asda café kids eat for £1

No minimum spend required

Bella Italia kids eat for £1

When adult buys a main meal. Mon - Thu, 4pm - 6pm only

Café Rouge kids eat for £1

When an adult buys a main meal

Dobbies kids eat for 'free'

When an adult buys a main meal

D unelm Pausa Café kids eat 'free'

When an adult spends £4 in the café. Valid everyday

H ungry Horse 'free' kids breakfast

When an adult buys a b reakfast from £3.49

Ikea kids eat for 95p or £1.50

No minimum spend. Valid everyday of the week

Hungry Horse kids eat from £1

When an adult buys a main meal. Mondays only.

M&S Café kids eat 'free'

When an adult spends £5 in the café. Includes main, side, fruit & drink

M orrisons Café kids eat 'free'

When an adult buys a m ain meal. Valid everyday

T esco Café kids eat 'free'

When an adult makes a purchase in café. Clubcard members only

T he Real Greek kids eat 'free on Sundays

When an adult spends £10

Sizzling Pubs kids eat for £1

When an adult buys a main meal

Who is eligible for the £400 energy bill discount and how do you claim the money?

Mon, 01 Aug 2022 13:12:50 GMT

The Government has announced details of how the Energy Bills Support Scheme – a £400 payment for all households in Britain to help with energy bills this winter – will work. Most will get the grant automatically from their supplier in six instalments between October and March, but if you've a non-smart prepayment meter you WILL have to take action to get the money.

The scheme – which was initially announced in February as a £200 payment – will see households in England, Scotland and Wales with a domestic electricity account get a non-repayable grant of £400. There will be funding for Northern Ireland to provide similar support but details have yet to be revealed.

The Government has also announced that further funding will be available to those who may miss out on the scheme. It said about 1% of households will not qualify for the grant – mainly those without a domestic electricity meter or a direct relationship with their supplier, such as those in park homes. Further details on this funding will be made available in due course.

In addition, the Government said it expects landlords to "pass the discounted payments on appropriately" to their tenants.

How the £400 energy grant will be paid?

Regardless of how you get the payment, you WON'T be asked for your bank details to access the grant – do be aware as we've already seen scams that use cost of living support as a way to trick people into giving out personal details. All payments will come directly from your supplier and will be paid between October 2022 and March 2023. How you'll get the payment all depends on how you pay for your energy.

Those paying by direct debit, standard credit, or those who have smart prepayment meters will get the grant automatically. You'll get £66 in October and November, and £67 in each of the remaining four months. It's slightly different for those on traditional prepayment meters – here's what you need to know:

Monthly direct debit customers. You'll get the grant automatically, as a deduction on your monthly payment, or as a refund into your bank account shortly after your direct debit payment is taken each month. It's not clear yet which approach each supplier will take – we'll ask providers and will update this story when we know more.
Standard credit customers. This includes those who pay by cash, card or cheque after receiving a bill monthly or quarterly. You'll get the payment automatically – in the first week of each month between October 2022 and March 2023. It'll be added as credit to your account, so you should see this added to your bills over this period.
Smart prepayment customers. You'll get the grant automatically as credit applied directly to your meter in the first week of each month.

Traditional prepayment customers. For these customers, the grant ISN'T automatic – you have to redeem it to get it. You'll need to ensure your supplier has up-to-date contact details for you as your money will be sent as six separate vouchers via text, email or post – which you'll need to redeem by topping up as normal in a shop or post office.

Crucially, the Government has said you'll have three months to redeem each voucher – and if you lose them or they expire, they can only be reissued up until 31 March 2023. So you could miss out if you don't act to redeem all of them in time. We're checking if the value of the vouchers will be split in the same way as for other payment methods and we'll update this story when we know more.

Negative budget: What to do when your finances don’t meet your essential costs

Tue, 26 Jul 2022 12:10:01 GMT

The price of almost everything has risen and is expected to keep rising thanks to the cost of living crisis currently battering the UK.

But with millions of households struggling to cover the cost of daily essentials and feeling anxious about unexpected expenses cropping up, what should you do when your bank balance drops to a dangerously low level?

In this article, we’ll let you know what steps you should take if your budget is being stretched to its limit and it feels like you have more money going out than coming in

Identify the problem

If you have a negative budget, it means you are, essentially, spending more than you are bringing in.

It can be easy to jump to conclusions and assume that you have a negative budget due to poor money management or reckless spending. But whilst this is often the case, you can also have a negative budget if you are in a low-paid job and spend the majority of your earnings on essential costs like utilities or rent.

By identifying the problem, you can put a stop to any unnecessary expenses and make your finances stretch to meet your essential costs.

This could be an unused subscription or membership you don’t use, an expired free trial, or just mindless spending with small purchases a slippery slope that can lead to overspending.

Prioritise your spending

If you are struggling to keep a lid on your expenses, prioritising your spending can help you list your bills in order of importance, meet your essential costs, and, perhaps most importantly, lower your stress levels.

The most important bills are those that keep a roof over your head, such as your mortgage or rent (including arrears), utilities, council tax, and secured loans.

This is because the consequences of not paying priority bills are far greater than the consequences of not paying non-priority bills, such as credit cards, unsecured loans, and overdrafts.

Cut your monthly expenses

It can be easier said than done but by cutting your monthly expenses, you can claw back some spare cash and build a buffer to bring your budget back into the positive.

To do so, try swapping supermarket-bought lunches for homemade alternatives, shopping around for a cheaper gas and electricity provider, and ditching the daily commute for a walk or cycle.

The 21/90 rule states that it takes a minimum of 21 days to form a habit and 90 days for it to become a permanent lifestyle choice. So, by making minor changes to your monthly spending habits and repeating them for 90 days, your finances could be significantly improved within a matter of months.

Boost your income

This can help you repay your debts, build your savings, or just bridge the gap between your finances and your essential costs when you find yourself struggling to make ends meet.

Make a plan

The only way to make a positive difference to your finances is to make a plan (and stick to it).

Check if you qualify for financial support

If you are still worried about meeting your essential costs despite cutting costs and qualifying for a cost of living payment, however, it is worth checking if you are eligible for financial support.

To find out what financial support you are entitled to and how to make a claim, contact your local council or visit the GOV.UK website.

DWP Overpayment Write Off Guide

Tue, 26 Jul 2022 11:57:14 GMT

If you find out that you’ve received any benefit overpayments, the idea of paying it them back can feel extremely stressful.

Although incorrect benefits payments happen frequently, it’s difficult to find clear information on exactly why they happen, whether overpayments can be written off, and what your next steps should be.

Thousands of people contact us for debt advice every week, so we’ve put together a guide that will help you understand what government guidance says about overpaid benefits.

What are benefits overpayments?

According to GOV.UK, an overpayment is a “benefit that the claimant has received but is not entitled to”.

This wording can make it sound like the person who’s received the benefit overpayment has knowingly taken more money than they’re allowed – but this is rarely the case.

More often than not, overpayments occur because there’s a genuine error. Sometimes this is down to the Department for Work and Pensions (DWP) – and sometimes it’s because the person who is claiming the benefit doesn’t realise their entitlement has changed.

How does a benefit overpayment happen?

There are lots of reasons that benefits overpayments happen. The most common reasons include:

DWP, HMRC, or local authority errors
You’ve provided incorrect information when you applied for the benefit
Your circumstances have changed and you didn’t let the DWP know

Most benefits overpayments happen because of simple mistakes or errors like the ones above – but there are some situations where things are a little more complicated:

Benefits advances cannot be repaid as the person stops claiming the benefit shortly afterwards
The person claiming the benefit has knowingly provided incorrect information and is therefore committing benefit fraud

What should you do if you realise you’re being overpaid?

If you realise that you’re getting benefit payments and they’re either too much or you’re not supposed to be getting them, you should always tell the benefit provider straight away.

It can be tempting to keep quiet about overpayments, especially if money is tight, but if you do, you could end up being fined or prosecuted.

It’s important to remember that the DWP will realise there’s an error sooner or later. The longer any overpayment goes on for, the more you’ll end up having to pay back.

What if the DWP lets you know you’ve received benefits overpayments?

If you’ve received a benefits overpayment and the DWP realises before you do, you’ll usually get a letter informing you.

The letter will usually come from the DWP debt management department. The letter should give you information about the overpayment, including:

The time period that you were overpaid
How much you were overpaid each week
The total amount that has been overpaid

Will you have to repay the overpayment?

Whether or not you’ll have to repay overpaid benefit will depend on the benefit that has been overpaid.

There are different rules for different benefits. Since overpayments may have occurred before new benefits were introduced, some of the benefits we cover here are not current and may have been replaced.

First, we’ll talk about the following benefits:

Income Support
Personal Independence Payment (PIP)
Disability Living Allowance (DLA)
Jobseeker’s Allowance (JSA) (but not New Style JSA),
Employment and Support Allowance (ESA) (but not New Style ESA)

If you have been overpaid any of these benefits, you usually cannot be asked to pay it back. However, if the benefits office can prove that you purposefully misrepresented something or didn’t tell them something when you claimed, they can still ask you to pay it back.

Universal credit overpayments

The Universal Credit award system covers three major benefits. They are:

Universal Credit
New Style Jobseeker’s Allowance (JSA)
New Style Employment and Support Allowance (ESA)

If you owe money because of an overpaid universal credit benefit, you will always be expected to repay the money.

Unfortunately, this applies no matter what caused the overpayment. So even if it was a DWP error and you did not know, they will still try to recover benefit overpayments.

There are a couple of exceptions to this rule – but you should be warned that it’s rare for overpayment debt to be written off.

Firstly, you can explain to the DWP that you’re in severe financial hardship and that them recovering the debt would leave you short of basic living costs. In the GOV.UK guide to overpayment recovery, it’s explained that the DWP team can ‘exercise their discretion not to recover a debt’. However, it is rare that this happens – even when the DWP are given strong evidence that it would leave you short.

The only other way to get this debt written off is to prove that it wasn’t ever a debt – but in fact a benefit payment you were entitled to. To do this, you’ll need to carefully show all your working out and write to the DWP explaining that there was no overpayment made.

Housing benefit

Most of the time, housing benefit overpayments will be recovered and it will be the local benefits office that organise the recovery action.

However, there are some circumstances that mean they cannot be recovered:

If it was caused because of an ‘official error’. This means a mistake made by the local council, the DWP, or HM Revenue and Customs (HMRC)
You did not contribute to the error
You couldn’t have reasonably been expected to know you were getting an overpayment

Overpayments of housing benefit will either be recovered from the person who got the overpayment or the person who caused the overpayment.

If the local council (sometimes called the ‘local authority’) try to get an overpayment back from you but the overpayment was made to your landlord, you should talk to a benefits advisor and let them know as they may need to talk to your landlord instead.

Tax credit overpayments

The amount of tax credits you’re entitled to is worked out by HMRC at the end of ever tax year. They’ll look at how much income you received, and if it’s more than they expected, it may turn out that you’ve been paid too much in tax credits.

If you’ve been overpaid tax credits (including child tax credit and working tax credit) and therefore have tax credit debt, this will have to be repaid and will not be written off.

These overpayments will be handled by the DWP debt management team.

How is an overpayment recovered?

Hopefully now you have an idea of which overpayments can and can’t be recovered.

If there’s no way of having your overpayment written off, it’s crucial that you know how any overpaid will be collected.

The most common ways that the DWP will recover a benefit overpayment are:

By making deductions from future benefits payments
Taking the amount out of arrears or back-dated payments that are owed to you
Using a direct earnings attachment to take money from your wages
Getting a court order for debt recovery

What happens if I refuse to pay back overpaid benefits?

Although it’s not advisable, some people will refuse to pay back overpaid benefits – or just ignore letters from the DWP explaining how debt will be recovered.

The DWP and other departments that handle benefits overpayments have different ways of collecting debt – so even if you refuse to pay, it’s still highly likely that they’ll still be able to recover the debt from you.

In some cases, a fairly standard debt collection process will be followed. You will get reminder letters – then letters and calls from a debt collection agency if you still don’t make payment.

However, many of the options that the DWP have don’t need any payment from you – as they involve collecting the money directly from future benefits or your wages. In cases like these, the DWP can apply to the court to make an ‘attachment of earnings’ – which will take a percentage of your wages before it’s paid into your bank.

The DWP also have the power to deduct repayments from your future benefits payments. In some cases, the amount recovered can be up to 40% of your benefit amount – which significantly reduces what you’ll be paid.

With this in mind, it’s always better to talk to the DWP debt management team and try to come to an arrangement that works for everyone. The debt management team tend to be quite flexible and will usually agree to a reasonable repayment plan, even if it’s over a long time.

Will benefits overpayments be written off after 6 years?

Since a person’s credit rating only covers a period of 6 years, lots of people think that if you can ignore a debt for this amount of time, it disappears.

In theory, a benefits overpayments debt could become ‘statute barred’ after 6 years. When a debt is statute barred, it means there are no legal options left for recovering the money – so most companies or government departments will consider it gone forever.

However, it’s extremely unlikely that outstanding debts to the DWP could ever go this long without being collected. As we’ve already discussed, the government has lots of options when it comes to collecting you debt – far more than a financial organisation or credit company.

So, in theory, anything you owe to the government (like benefits overpayment and council tax debt) could be written off after 6 years – but in reality, the DWP will never let a debt be outstanding for this long.

What is a civil penalty for an overpaid benefit?

Although it’s quite rare, you may see the DWP talk about ‘civil penalties’ relating to overpayment of benefits.

This usually applies when they think you have deliberately mislead the system to claim more than you were entitled to. This is considered benefit fraud. Any debt relating to this kind of fraud will be pursued and recovered – and a civil penalty fine will often be added on top of what you owe.

Let’s take a look at some examples of when a civil penalty might apply:

You have provided incorrect information about your income or savings
You have falsely declared that you cannot work due to illness or injury
You don’t report a change in address
You pretend to pay more rent that you actually pay
You don’t tell the authorities when someone moves in or out of your home

A civil penalty is usually between £350 and £5,000 and will decided on after an investigation has taken place.

If it is decided that an overpayment is due to a fraudulent claim, you can appeal this decision. If you find yourself in this situation, it’s very important that you seek legal advice.

Can benefits overpayments be written off any other way?

Although we’ve explored most of the ways benefits overpayments can or can’t be written off, it’s important to understand that there are debt solutions that can help write off virtually any unsecured debt – including many kinds of benefits overpayment.

As long as an overpayment has been made in error (rather than due to fraud) then an IVA provider will be able to talk to you about including it as part of the overall debt you’ll pay off. What’s more, the insolvency practitioner dealing with your case will take over all communication with the DWP – so you won’t have the stress of dealing with the calls and letters either.

Meeting of creditors: Everything you need to know

Fri, 22 Jul 2022 11:20:55 GMT

Before your debt repayment plan can be activated, you need a majority of your creditors to approve it first. The process for when creditors will review, and hopefully approve, your proposal is called a meeting of creditors (often abbreviated to MOC).

In this guide, we’ll explore everything you need to know about your meeting of creditors: what it is, how it works, how involved you need to be in a meeting of creditors, and what happens afterwards.

What is the meeting of creditors?

The meeting of creditors is a routine part of the process. For any debt solution to be approved, it first has to be reviewed and signed off by a majority of your creditors – the people you’re in debt to. ‘Meeting of creditors’ is the name for this review process.

The first thing to mention is that it’s not actually an in-person meeting. The term ‘meeting of creditors’ can lead people to worry that their creditors are getting together in a room, discussing all the times they failed to repay their debt, before naturally deciding to reject them for an IVA.

In reality, ‘meeting of creditors’ is simply the term given to the process. Creditors will review and vote on whether to approve your proposal, but it doesn’t all happen in one day. It’s usually done virtually, and votes are often submitted in advance of the meeting.

While you will be given a date for your meeting of creditors, and a virtual meeting may take place on that day, the meeting date is really just a deadline for the point at which every creditor should have submitted their vote on your proposal.

How does the meeting of creditors work?

Before your meeting of creditors takes place, we’ll put together a proposal for you that we think will help you pay off your debt, will be affordable for you, and will ultimately be approved by your creditors. As soon as you’ve read through the proposal and given it the OK, we’ll then share it with your creditors.

Anyone you owe money to who is named in the proposal will be sent a copy and given the chance to review it. Your creditors are given 16 days’ notice of the deadline for returning their votes, plus an additional two days if they’re voting by mail, and the meeting can be adjourned by a maximum of 14 days if there are any issues with the voting process.

In the case of an IVA, for the arrangement to be approved at least 75% of the creditors included have to agree to it. Each creditor has a vote equal to the amount they are owed as a percentage of your total debt. If you’re using an IVA to pay off £10,000 of debt, for example, and you owe Creditor A £1,000, then Creditor A’s vote will be counted as 10% of the total vote.

The voting process starts as soon as your creditors receive notice of the deadline for voting. Creditors can send their votes through at any point before the deadline, often by email, and the votes will be reviewed once every creditor has had the chance to examine your proposal.

We will remain in touch with your creditors during this time to try and answer any queries, and we’ll also want to keep you in the loop so we can update you on any developments from the review process.

When does the meeting of creditors take place?

As previously mentioned, the meeting of creditors isn’t simply a meeting that happens on a given day. Instead, it refers to the entire process of reviewing your proposal. This process starts as soon as creditors are given notice of the voting deadline, and ends on the day of that deadline.

As soon as we’ve shared your proposal with creditors and given them notice of the deadline for the meeting of creditors, you’ll receive an email from us confirming that your proposal has been shared, and notifying you of the date for your meeting of creditors. You can also find the details in the customer app .

On the day of the meeting itself, some of your creditors may decide to meet virtually, but it isn’t compulsory for anyone to attend, and most of the votes will likely have already been sent in via email or otherwise. The votes will be tallied by the chair of the meeting, who will then know whether your proposal has received enough votes to be approved.

Do I have to attend the meeting of creditors?

In a word, no. Because the meeting of creditors is usually done virtually, and many creditors have already voted prior to the meeting, you won’t be required to attend. Attending the meeting isn’t actually compulsory for your creditors either.

The voting process opens as soon as your creditors are notified of the meeting date, and while you won’t have to attend the meeting yourself, it’s important that we are able to get in touch with you throughout this time.

We will never put forward a proposal unless we’re confident it has a good chance of being approved, but that doesn’t mean creditors won’t have certain questions regarding your debts, financial history, and affordability. We’ll also need to be able to get in touch with you in order to let you know the outcome of your meeting.

What are the possible outcomes of a meeting of creditors?

There are three main outcomes of a meeting of creditors: Arrangement approved, arrangement approved subject to modifications, and arrangement rejected.
Arrangement approved
This is the best possible scenario, and means your creditors have looked at your financial history, examined your IVA proposal, and at least 75% of them have agreed that the terms of your IVA are acceptable to them.

We pride ourselves on our ability to guide our clients through the application process, which has resulted in a monthly approval rating of 88% for IVAs, the most popular debt solution we offer.
Arrangement approved subject to modifications
In certain cases creditors will ask for changes to be made to the proposal. These are known as modifications. The most common include requesting for your payment term to be extended (from five years to six in an IVA, for example) or asking to up your monthly payments.

Having your proposal modified doesn’t mean it’s going to be rejected, however. In fact, it’s a good indicator that it’s going to be approved as long as the creditor requests are met.

We’ll get in touch with you as soon as any modifications are requested to let you know the details and give you time to consider how the proposed changes would impact your budget. If you need more time, we can always ask for the meeting of creditors to be delayed.
Arrangement rejected
Again using the example of an IVA, if at least 75% of your creditors can’t agree on your proposal, it will be rejected. In that situation, one of our advisers will set up a call with you to discuss next steps, which might involve resubmitting your proposal, or looking at another one of the debt solutions we offer.

As well as the three main outcomes, your creditor meeting date can also be adjourned. This is a normal part of the process which gives creditors more time to review your case, and it isn’t an outcome in itself.

Your meeting can only be adjourned for a maximum of 14 days from the original meeting date, after which your creditors will consider your case and come to one of the above conclusions.

What happens after the meeting of creditors?

What happens after your meeting of creditors depends on the outcome of the meeting itself.
If your arrangement is approved
If your arrangement is approved, we’ll send you an email with the good news, welcoming you as a client. Your proposed repayment plan can then become legally binding, and you will start making monthly contributions towards your debts.

These payments will last five years, six years, or however long your agreed payment term is.
If your creditors want to make modifications
If creditors ask to make modifications to your proposal then, as mentioned previously, we’ll call you to talk you through the proposed changes and help you come to a conclusion that works for you.
If your arrangement is rejected
In the event that your arrangement is rejected, we’ll call you to walk you through the options available to you, which might include resubmitting your proposal, restarting the application process, or looking at alternative debt solutions we can offer you.

Application process: Your step-by-step guide

Fri, 22 Jul 2022 07:47:23 GMT

Making the decision to deal with your debt can be stressful enough, so we want to make the process of applying for a debt arrangement as easy as possible.

In this guide we’ll break down the application process step-by-step, letting you know exactly what you need to do at each stage to progress your application and give yourself the best chance of having your case approved.

1. Application submitted

The fact that you’re reading this now means you’ve already done the hard part – taking the decision to deal with your debt and reaching out to us for help. We’ll do our best to make the rest of the process as easy as possible for you.

Now that we have received your details, we’ll create a case for you, get to work on your application, and do our best to keep you informed of what we’re doing throughout the process.

2. Verification call

Soon, we’ll book your verification call. Your verification call is the initial call you have with one of our advisers, which helps us get to know you and your financial situation a bit better.

We’ll do the heavy lifting in terms of arranging the call at a time that suits you, and we’ll be sure to send you an email confirming the date and time. During the call, you may be asked some questions about your personal circumstances, your debt level, and your income and outgoings.

While this might sound a bit intimidating, it’s just part of the process – the more we know about the financial position you’re in, the more we can help you.

3. Welcome call

Once you’ve been through your verification call, your case can progress to the next step in the process: your welcome call with your new Client Liaison Adviser.

The welcome call is exactly what it sounds like – a call to welcome you, let you know how the application process is going to work, and introduce you to your Client Liaison Adviser.

The Client Liaison Adviser is the person who will be responsible for managing your case throughout the course of the application process. They’ll be your first point of contact should you have any issues.

On the welcome call, they will introduce themselves, explain how things work, and walk you through the Individual Voluntary Arrangement (IVA) and other debt solutions we offer. Once again, we’ll arrange the call and let you know the details, so there’s nothing you need to worry about.

4. Confirmation of bank details

After you’ve had your welcome call, the next thing we need to do to progress your application is have you confirm your bank details.

For people who have had debt problems in the past, their bank is often a creditor – someone they owe money to. In cases like this, it’s within the bank’s rights to take money directly from your account in order to put it towards the money you owe, which could put your repayment plan in jeopardy.

That’s why we may ask you to change your bank account. It only takes a few minutes to set up a new account with our preferred bank, Starling, and you can do it directly from the customer app.

It’s important you change your bank account as quickly as possible if it’s decided you need to. We can’t take any case forward where the client’s bank is also a creditor, so you run the risk of your case being put on hold, or eventually cancelled.

We’ll be sure to notify you if you need to change your bank account. If you don’t, we just need you to confirm your bank account and payment details – that way we can be sure you have your method of payment ready to go as soon as your monthly contributions begin.

5. Drafting your proposal

Based on the information we have about your income, outgoings, and debt level from your verification call (step 2) we’ll get to work drafting your proposal.

Your proposal will form the foundation of your eventual repayment plan. The proposal we put together will be based on what we think you can reasonably afford to pay each month. You can read more about how the proposal works here.

As soon as your proposal is ready, we’ll send it to you to read and sign. Your proposal can be viewed and signed in the customer app; you’ll find it in the Documents section. All you have to do is follow the simple steps and add your digital signature.

If you have any questions about the content of your proposal, be sure to get in touch with us. If you’re struggling to view or sign your proposal in the customer app, you can call us on 0141 218 4739 and we’ll walk you through it.

6. Proposal reviewed by creditors (meeting of creditors)

The next step is the creditor review known as the meeting of creditors. For an IVA or another debt solution to be approved, it first has to be reviewed and signed off by a majority of your creditors – the people you’re in debt to. ‘Meeting of creditors’ is the name for this review process.

It’s not actually an in-person meeting. Creditors will review and vote on whether to approve your arrangement, but it doesn’t all happen in one day. It’s usually done virtually, and votes are often submitted in advance of the meeting. All votes need to be submitted by the day your meeting of creditors is scheduled for.

As soon as we’ve shared your proposal with your creditors and given them notice of the deadline for the meeting of creditors, you’ll receive an email from us confirming that your proposal has been shared, and notifying you of the date for your meeting of creditors. You can also find the details in the customer app.

You won’t have to attend the meeting, but you should make sure you’re contactable – we may need to get in touch to update you on any developments from the meeting, and to let you know what the outcome is once every creditor has had a chance to vote on your proposal.

7. Arrangement approved, modified, or rejected

Once your proposal has been shared with your creditors and they have had the chance to review it, the votes will be tallied and we’ll let you know the outcome of the meeting of creditors.

There are three possible outcomes from your meeting of creditors:

Your arrangement is approved
Your arrangement is approved subject to modifications
Your arrangement is rejected

As long as a majority of your creditors (75% in the case of an IVA) agree to the terms, your arrangement will be approved. We’ll send you an email with the good news, and to welcome you as an official client.

Your proposed debt repayment plan will then become legally binding, and you will start making monthly contributions towards your debts. These payments will usually last in the region of five to six years, but the payment term varies depending on your arrangement.

Once your arrangement begins, you may not hear from us much until your annual review. That’s a good thing, it means you’re keeping up with your payments and everything is going well. If you do have any issues in the meantime, however, we’re just a phone call away.

Changing your bank account: A guide

Fri, 22 Jul 2022 07:19:03 GMT

Mums with Debt has teamed up with Monese & Suits Me to offer our clients a FREE bank account. The application is 100% online and NO CREDIT CHECKS are required.

Click the logo below to get started!

Changing your bank account

Changing your bank account is a really important part of the application process and your case will not be able to progress until you switch your current account. That’s why, if we’ve asked you to change bank account, we recommend you do so as quickly as possible.

Changing your bank sounds like a huge hassle – but given the range of quick, easy to set up and free banking options out there, it really couldn’t be simpler.

Why do we ask you to change bank account?

If you’ve been asked to change your current account as part of the setup of your arrangement, it’s because your old bank account will be at a high risk of being frozen when you begin your repayment plan.

Some customers do tell us they’d prefer not to change bank account because they want to remain loyal to the bank. Unfortunately, your bank may not return this loyalty – especially if you owe them money.

What are the benefits of changing bank?

The people you owe money to can’t take any more money or freeze your account
With no borrowing facility, there’s no way to get further into debt
Your money’s easier to manage when it’s all in one place
It’s a fresh start for you and your finances.

Remember: if you already hold a bank account or owe money to a bank, you won’t be able to open a new bank account with them. Your new account MUST be with a different bank to the one you currently bank with.

What to look for in a basic account

It’s rare for a bank to refuse you a basic account, but there are a few criteria you’ll need to be aware of when you’re starting out with a new bank.

Keep it basic: We’d recommend you open the most basic current account possible. This means you won’t have to pass the credit check you usually need to pass to open a current account.

No overdraft facility: Most basic accounts won’t offer an overdraft facility; some will offer a small financial buffer. It’s best that for the duration of your arrangement, you don’t get further into debt or get further overdrawn.

Avoid credit cards: While you won’t be able to use credit on a basic account, it also means there’s no risk of getting into debt. Most do come with a direct debit facility, as well as the ability to withdraw cash from an ATM.

How to sign your proposal

Fri, 22 Jul 2022 07:10:59 GMT

How to sign your proposal

The process of entering a debt arrangement can seem long but you’re almost at the finish line.

All you need to do is sign your proposal and we’ll do the rest.

Remember, a debt arrangement is a legally binding arrangement that could help you:

– Write off a percentage of your unsecured debts
– Freeze interest and charges
– Stop creditor hassle
– Reduce your debts to one affordable monthly payment

Where do I sign my proposal?

Reviewing and signing your proposal can be completed within your customer app – saving you the stress of searching through emails or waiting on the postman to arrive.

In just a matter of moments you can be on the way to changing your financial future. And the best part? It’s done with the click of a button.

So, what are the next steps?

You can find your proposal within the app by clicking the “view and sign documents” button and then the “review documents” button.
This gives you the chance to review your proposal in full and check the details are as you would expect. You can click through each page of the document by hitting the “next page” arrow. It’s important to read this carefully and get in touch if you have any questions or stumble across anything you don’t fully understand – our friendly experts are on hand to help.
Now it’s time for the important part. When you have reviewed the proposal you’ll be asked to click various tick boxes confirming that you have read and understood the information outlined in the document before pressing submit. It’s important to do this as your application cannot progress unless you do so.
Once your proposal has been signed, you’ll receive a thank you message to let you know we’ve received your signatures.

For more information about understanding your proposal, check out our guide or speak to an advisor.

Can You Get Council Tax Debt Written Off?

Thu, 09 Jun 2022 13:05:36 GMT

Can You Get Council Tax Debt Written Off?

With the cost of living continuing to rise, more and more people are finding themselves struggling with council tax payments. If you’ve got council tax arrears (missed payments), you’re not alone – they’re one of the most common debts we help people with.

Council tax debt is considered a ‘priority debt’ – but that doesn’t mean there aren’t solutions for you to explore.

In this guide, we’ll share some information about council tax and look different ways to deal with council tax debt. We’ll also explore all the options that make it possible for council tax debts to be written off altogether.

What is council tax?

Council tax is an annual fee that is paid to your local authority (council). This money is used by local authorities for a huge range of public services, including:

Local police and fire services
Bin collects and local waste disposal facilities
Parks, leisure centres, and other recreational spaces
Street cleaning
Road maintenance
Street lighting

You’ll usually get a council tax bill every year. When you do, you can either pay it in full or set up a payment plan. Most people pay their council tax in 10 payments through the year (with a break during February and March) – although it’s possible to talk to your local council and arrange to spread it over 12 months instead.

If you decide to pay over 12 months, your payments will be lower – but you won’t receive that two month break.

Who has to pay council tax?

Everyone is expected to pay council tax – although there are a few exceptions to the rule. These rules are outlined in an act called The Local Government Finance Act 1992. You can read the full version here – but as a brief overview, these exceptions include:

When the property is empty due to a death
If the property is empty due to the occupier(s) being cared for elsewhere
If the residents have severe mental impairments
If all the residents are under 18
If all the residents are full-time students
Self-contained flats where a dependent lives
Properties owned by charities

If you think you shouldn’t be paying council tax, give your local council tax helpline a call or visit the council tax section of the government website . They’ll explain what you need to do and may even issue a refund if you’ve paid when you didn’t need to.

Can I get a discount on my council tax?

As you can see, it’s only in very specific circumstances that a property becomes excepmpt from council tax – but there are more circumstances where local councils apply a discount. You may be entitled to a discount if:

You live with someone who is exempt from paying
You live alone (or just with dependants)
You claim certain benefits (including Universal Credit, Employment and Support Allowance, Pension Credit, and some others)
You are on a low income
You are experiencing serious financial hardship

Again, if you find yourself in one of these circumstances and think you might be eligible for a council tax reduction, it’s always worth calling your local council tax helpline or dropping into your council offices to discuss this with someone.

How much council tax should you be paying?

There are lots of factors that a local council consider when they put together council tax bills. Your exact council tax payment will be based on your personal and financial situation – as well as the overall amount they need for local services.

The other main factor is the size and value of the home you live in. Council tax is divided into ‘bands’ – running from A-H. The more your house is worth, the higher the band and the higher your bill will be.

If you think your house is in an incorrect band, your council will have a process that you can go through to have it reassessed. You’ll be able to talk to someone at your local council offices if you’d like to explore this in more detail.

Can you get put in prison for council tax debt?

There are lots of scare stories in the press about how you can be sent to prison for not paying your council tax. While it is possible that a court could sentence you to prison – it’s extremely unlikely and is an absolute last resort.

In the rare instances that this does happen, a custodial sentence is reserved for people who have been asked to pay a number of times, have already been to court and had bailiffs visit – but still refused to pay or stick to any kind of payment plan.

If you get to this stage and haven’t found a way to work on your arrears, you should seek immediate independent financial advice to help find the right way forward.

Setting up a payment plan if you owe council tax

It’s absolutely normal to have a sense of anxiety about talking to anyone you owe money to – but if you’re struggling with council tax payments, talking is one of the best things you can do.

Every day, council offices deal with countless calls and visits from people who can’t afford to pay some or all of their council tax. They usually have facilities set up for this – including payment plans that will help you get caught up with what you owe.

If you’ve recently missed a payment, it’s a good idea to speak to someone at the council and let them know that you’re aware. Even if it’s an honest mistake or something you think will just be a one-off, councils have a debt collection process, and if they don’t hear from you, this could involve legal action and council tax bailiffs visiting your property.

What are your options if you’d like to have council tax debt written off?

There are a couple of different options to consider if you’re hoping to have council tax debt written off.

Let’s take a look at both in detail:

Option 1. Asking your local council to write off council tax arrears

Your local authority may have the power to write off any debt you have relating to council tax. Again, this is something covered in the Local Government Finance Act 1992 – specifically Section 13A (1)(c).

A word of warning though – it’s very unlikely they will even consider this. These rules were originally set up for use if your home cannot be used because of a fire or a flood – although they are sometimes used if you’re facing serious financial hardship, or facing serious physical or mental health issues.

Every council has their own policy on writing off unpaid council tax, and some just will not do it under any circumstances. However, it’s worth exploring if you really feel like you just have no way of making a payment.

If you think your local council may consider your circumstances, you should contact them about discretionary relief – quoting s13A Local Government Finance Act 1992. They will ask for more details and will usually ask for proof from you about the hardship that you’re facing.

As with anyone you owe money to, it’s always better to get in touch before a payment is missed. If you think you can’t make your next payment for any reason, get in touch with your local council offices as soon as possible and talk about your options.

Option 2. Looking into debt solutions

Another option you may decide to look into is a formal debt solution.

These kinds of agreements include Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs).

These options are called ‘formal’ debt solutions because, if agreed, they become legally binding – which means you and the creditor (the companies you owe money to) sign to say you’ll follow the terms of the agreement.

The process is a little longer than talking to your council, but if you apply, the Insolvency Practitioner you speak to will make sure any action that’s currently being taken against you is put on hold until there’s a clear way forward.

Debt solutions like these don’t just work to write off council tax arrears – they’ll include all the unsecured debts you have outstanding – including any arrears.

How would a debt solution work if you’re behind on your council tax bill?

You start the ball rolling with a debt solution by talking to Insolvency Practitioners (IPs). The representative you chat with will ask some questions about what you owe and your personal circumstances, then look into whether or not you’re eligible.

If you are eligible, the IP company will take over all communication with your creditors. They will take a detailed look at your finances and help you understand how much you can afford to pay towards your debts each month. They will always make sure you have enough money to cover all your bills (including on-going council tax) and living expenses going forward.

With the amount of money you have left over, they will suggest one monthly payment that you’ll make directly to the IP. They will then divide this amount up over a number of years (usually five years) and make small repayments to each of your creditors out of this amount. When the debt solution comes to an end, any amount of council tax (or any other debt) that’s left over will be written off completely.

As you can see, the full amount of your council tax isn’t strictly written off – but anything that remains after your debt solution is completed will be. During this time, creditors cannot take any further action against you and will not contact you – so this option can be helpful if you’re losing sleep over money owed elsewhere.

Will council tax debt be automatically written off after 6 years?

You may have heard people talk about how debt can be wiped out if you avoid paying it for 6 years. In reality, this is almost never the case but it’s worth digging into the subject in a little more detail in case you’re under the impression avoiding paying council tax for a number of years is something to consider.

In short, trying to avoid paying council tax for 6 years isn’t just a bad idea – it also won’t work – and will almost certainly leave you in a very poor financial situation with your credit rating seriously damaged.

There’s a part of the law that says debt that hasn’t been paid or acknowledged for 6 years is considered ‘unenforceable’. This isn’t ‘writing off’ the debt – it just means that the creditor you owe can no longer take action to get any money back.

However, there are a significant number of factors that stop this 6-year rule from coming into force. One of them is if a creditor has applied to the court to get a County Court Judgement (CCJ) against you – ordering you to pay. If they have (and a council will have almost certainly will have done long before 6 years is up) then the Statute of Limitations no longer applies.

So, if you were to mistakenly believe that you simply need to sit-out 6 years to see your council tax written off, you will be disappointed – and you will have 6 years worth of Court Enforced council tax debt to pay back. You may have even got an attachment of earnings in the meantime – where your local authority is given permission to collect council tax arrears directly from your monthly salary or benefits payments.

What should you do if you think your council is treating you unfairly?

Councils have laws and guidelines to follow around collecting council tax and how they treat you if you’re struggling with payments. However, this doesn’t always mean they get it exactly right – so there are ombudsman services in place if you need to raise your complaint to a higher level or get an objective second opinion.

In England – Local Government Ombudsman
In Scotland – Scottish Public Service Ombudsman
In Wales – Public Service Ombudsman for Wales

Are you struggling with council tax debts?

If you’re having trouble paying your council tax or getting caught up with previous months debts, you’re not alone and there is support for you.

If you decide to talk to your council, it’s important that you do this quickly – ideally within two weeks of the missed payment and before you are issued with a final notice. You may decide to talk to your local Citizens Advice service before you do so you have all the information you need when you visit or call.

If you’re one of the millions of people struggling with other bills, you may decide that exploring the possibility of a debt solution is a good idea. Debt solutions have pros and cons – and they aren’t right for everyone, but if the money you owe is playing on your mind and you can’t see a way of getting caught up, talking to someone about how one might work for you could be a positive next step.

Energy price cap rise: What it means, and where to get help with gas and electricity bills

Thu, 09 Jun 2022 12:34:01 GMT

Energy price cap rise: What it means, and where to get help with gas and electricity bills

Energy prices have been on the rise for months now in the UK, and it’s recently been announced that the energy price cap will be raised by as much as 54%.

That means your gas and electricity bills are about to go up. Considering many households are already struggling with the impact of the pandemic, this latest price hike risks leaving millions of people facing energy bills they simply can’t afford.

In this article we’ll explore the latest energy price hike, including what the energy price cap is, why it’s being increased, what this increase will do to your energy bills in real terms, and – most importantly – what help is available to people who might struggle to keep up with rising costs.

What is the energy price cap?

The UK energy price cap was introduced in January 2019 as a measure to protect UK citizens from high power prices. The UK government initially set the price cap at a level of £1245 per year for each household.

The price cap represents the highest amount of money you will be expected to pay per year towards your energy costs at a given time, no matter who your supplier is.

Even if your supplier goes out of business and you’re switched to a new one, the new supplier won’t legally be able to charge you more for your gas and electricity than the price cap recommends.

Why is the energy price cap being increased?

Ofgem, the UK’s independent energy regulator, reviews the price cap twice per year and takes various factors into consideration when deciding whether it’s set at the correct level, including the overall price of gas and electricity and the stability or volatility of the global energy market.

When Ofgem last reviewed the price cap last year, they decided that the cap should be raised from October 1st 2021 in order to account for soaring energy costs. Then this week , Ofgem confirmed that the energy price cap will be raised again in 2021, this time by 54%.

There are many reasons for the increase . Wholesale energy prices are up by 104%, while the UK is more dependent on gas than other developed nations – gas heats 85% of the homes in Britain. Many of these homes are poorly insulated, so it also takes more energy to heat the average UK home.

Regardless of the reasons, this is the second major energy price hike in six months. Given that national insurance is about to go up, and inflation continues to soar, the latest cost increase will hit already struggling families hard.

When will this change kick in?

Ofgem’s new cap for England, Wales, and Scotland will take effect in April, so your April energy bill is likely to be significantly higher than the one you received in March.

The general cost of living also looks likely to rise further in the spring; The Bank of England has just announced that it will increase interest rates by 0.5% in order to help combat rising prices.

What will the price cap increase do to my energy bills?

Ofgem have announced that from April the energy price cap will be set at £1,971 – an increase of 54%.

According to The Guardian , this means that the 22 million UK households who pay for their gas and electricity by direct debit will see their typical bill rise from around £1,277 to £1,971, the upper limit of the price cap. That’s an increase of just under £700 annually.

For people who use a prepayment meter, the increase will be even higher. Your annual bill is likely to rise to around £2,017, an increase of £708.

Is there Government support to help me pay my energy bills?

The Chancellor, Rishi Sunak, has recently announced the Energy Bills Rebate scheme in a bid to help people cope with rising prices.

Under the scheme, all domestic customers will receive a £200 government-financed discount from October, but they will then pay it back in five annual installments.

English households in the lowest four council tax bands – 80% of the total – will also get a £150 rebate. Local authorities will get discretionary funding to help them support vulnerable and low-income households, and the devolved nations will receive equivalent support.

You can find out more with this Energy Bills Rebate Government fact sheet.

Is it really a ‘Rebate’ if I have to pay it back?

No. While it may help you deal with your bills in the short-term, the name ‘Rebate’ is misleading. The Energy Bills Rebate isn’t actually a rebate. With a tax rebate, for example, you get money back because you’ve been overcharged. That money is then yours to keep.

With the EBR, you’re not getting money to keep. You’re getting a loan, which you can then put towards your energy bills. But it’s important to remember that, as with any loan, you will eventually need to pay this money back.

Where else can I get financial support for rising energy costs?

British Gas support fund

British Gas have recently launched The British Gas Energy Trust, which promises people as much as £750 towards their energy bills even if they’re not British Gas customers.

There are two separate funds; one for existing British Gas customers, one for customers of other energy suppliers. As long as you provide evidence that you live in the UK and you’re looking to settle an existing energy debt, you could be eligible for between £250 and £750 in support.

To find out more and apply for support, click here.

Cold weather payment

Cold weather payments are Government payments that help people on benefits to afford to heat their homes during the winter.

Low income households can get a cold weather payment of up to £175 for every 7-day period of extremely cold weather between November 1st and March 31st each year.

You can find out more about cold weather payments on the Government website, here.

Warm home discount

Low income people also qualify for the warm home discount, a discount applied directly to your energy bill.

Under the warm home discount scheme, you can get a one-off discount of up to £140 applied directly to your energy bill between October and March.

For more information on the warm home discount, visit the Government website here.

Passport panic and other stresses to avoid if you’re planning your first holiday since COVID-19

Wed, 08 Jun 2022 17:34:58 GMT

Passport panic and other stresses to avoid if you’re planning your first holiday since COVID-19

In March 2020, the global travel and tourism industry came to a standstill due to mounting uncertainty over the rapidly spreading COVID-19 virus.

The situation remains in flux and rules still differ from country to country but 2022 marks the first year almost all international travel restrictions have been lifted and people have been free to holiday to their heart’s content.

This has, understandably, triggered a worldwide travel boom as sun-starved travellers swap staycations for sunnier climates. However, with case rates fluctuating throughout the world, research has become a crucial part of the pre-travel process.

In this article, we’ll let you know how to avoid the dreaded passport panic, and other stresses, so you can plan your first post-pandemic holiday with confidence.

Passport panic

With millions of people dusting off their passport for the first time in years, passport offices up and down the country have been struggling to keep up with demand. In April 2021, HM Passport Office urged people not to delay passport applications with waiting lists stretching to ten weeks and as of May 2022, this guidance still applies.

Since Brexit, Brits must also meet certain requirements to be granted access to EU countries. UK passports, for example, must have been issued less than 10 years before the date of travel (check the date of issue) and remain valid for at least three months after the date of departure (check the expiry date).

It comes as the number of UK travellers venturing abroad nears pre-pandemic levels and research reveals that 4.5 million people waited until restrictions had lifted to renew out-of-date passports.

COVID-19 entry requirements

COVID-19 tests for travellers entering the UK have been scrapped but with some countries only permitting holidaymakers that are fully vaccinated or have tested negative for the virus, you must find this information out before you travel.

Mexico, Croatia, and Egypt are currently welcoming UK travellers that have declined the COVID-19 vaccine, for example, but travel to Australia, New Zealand, and the Philippines is only permitted for vaccinated travellers.

It will vary from country to country but, as a general rule, you will usually be asked to take a PCR test within 72 hours or an antigen test within 48 hours of your expected arrival time.

The current guidance can change at a moment’s notice, however, so you must refer to official government-issued advice of the country you are travelling to before and during your holiday to ensure you are informed and following the correct rules.

Flight cancelations and delays

In the past few weeks, airport queues have led to widespread flight cancelations and delays with millions of holidaymakers hoping for a relaxing break left with no choice but to abandon their post-pandemic holiday plans at the departure gate.

Manchester, Dublin, Heathrow, Gatwick, Birmingham, and Bristol airports have reported lengthy lines forming both indoors and outdoors with customers queuing overnight for early-morning flights and – as was the case for unlucky tourists traveling from Cardiff to Zakynthos last week– waiting over 40 hours just to board.

This is due to a combination of tougher security checks in the wake of Brexit, and additional COVID-19 measures still in place, and unprecedented staff and crew shortages.

It might have been sufficient to arrive at the airport 90 minutes before your flight in a pre-pandemic world but with further chaos expected as peak travel season looms, four hours has become the new normal.

Price rises

With the COVID-19 pandemic reportedly costing the global travel and tourism industry $2 trillion and the world experiencing a cost of living crisis, travel companies have hiked the price of package holidays and last-minute deals are practically non-existent as airlines scramble to recoup lost profits.

It can be tempting to splash the cash on your first post-pandemic holiday but with the cost of almost everything double than what it was just a few years ago, you could end up spending more than you bargained for.

Whether you have your sights set on an around-the-world trip or will be holidaying closer to home this year, always establish a travel budget and remember to check the exchange rate before you travel.

The price you will be quoted for you r first holiday since COVID-19 will depend on the destination, duration, and dates you choose, but by avoiding peak travel season and booking as early as possible, you can cut costs without compromising on fun.

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Are You Eligible for Additional Childcare Support?

Starting September 2024, parents in England can get 15 hours of free childcare per week for children as young as nine months, with phased expansions to support working parents and reduce childcare costs.

Available free childcare

Eligibility based on child’s age and parental status

Application process

What you need to apply

Usage and coverage

Government and provider costs

Regional variations

Additional financial support

Getting Help With Court Fees

What are court fees?

Some examples of when you might have to pay a court fee

Getting help with court fees

Boost your income

Make a plan

Check if you qualify for financial support

Rebuilding your credit score

What is a credit score?

Reviewing your credit score

How do I check my credit score?

How can I build my credit score?

What can negatively affect my credit score?

Do I need to pay to check my credit score?

What is a bad credit score?

Is it worth paying for Experian?

Can Experian boost or lower your credit score?

Attachment of Earnings (AOE) all the facts in 2023

What is an Attachment of Earning Order?

How does an Attachment of Earnings Order work?

What earnings can be taken as part of an Attachment of Earnings Order?

How much of my earnings can be taken under an Attachment of Earnings Order?

The following limits apply:

Does my employer need to be informed of an Attachment of Earnings Order?

Can multiple Attachment of Earnings Orders be applied to my warnings?

Will my credit score be negatively impacted by an Attachment of Earnings Order?

Can I be exempt from an Attachment of Earnings Order?

How can I avoid an Attachment of Earnings Order?

What are my options if I have an Attachment of Earnings Order in place?

Understanding your proposal

What is my proposal?

What will my proposal include?

How to manage your money in a recesion

Can You Get Tax Credits Overpayment Written Off?

What are tax credits?

Tax credits are a kind of benefit that the government pays to people, either:

Why might a tax credit overpayment happen?

Other reasons for tax credit overpayments

Late reporting

Under-estimated earnings

HMRC delays

Claimant error

HMRC error

HMRC investigation

Late renewal forms

Do you have to pay back tax credit overpayments?

Not sure why you’ve been overpaid?

What should you do if you notice a tax credit overpayment?

Can I appeal the overpayment debt decision?

How long do I have to repay the debt?

What are your repayment options?

Is there any chance that a tax credit overpayment will be written off?

Could the debt be written off after 6 years?

Are there any other ways to write off tax credits overpayments?

Kids eat 'free' or for '£1'

Who is eligible for the £400 energy bill discount and how do you claim the money?

How the £400 energy grant will be paid?

Negative budget: What to do when your finances don’t meet your essential costs

Identify the problem

Prioritise your spending

Cut your monthly expenses

Boost your income

Make a plan

Check if you qualify for financial support

DWP Overpayment Write Off Guide

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What are benefits overpayments?

How does a benefit overpayment happen?

What should you do if you realise you’re being overpaid?