This month – are you a net contributor to the state system? who takes the most out (and who pays the most in?);  capping energy bills and increasing rental income.


Rental cost soars
The amount of rent paid on residential properties in the year to June was £54 billion, says the Financial Times, having risen by £14 billion since 2012 – and over that period the amount of interest paid by homeowners on mortgages has shrunk by £6.4 billion to £26 billion.

The number of homes that are rented has risen by 20% in the past five years, partly because many young people cannot build up the capital they need for a deposit on a home.

Put and take
The FT published a chart showing the average amount an individual contributed to – and took from  – the state at different stages of life:

  • unsurprisingly, young people take a lot more out than they pay in because of the cost of education;
  • between the ages of 25 and 65, most people pay more in taxes than they take out of the system;
  • in old age, most people take out more through health and welfare costs than they contribute (on average a 90-year-old costs the state £30,000 a year).

Overall most people get back roughly what they put in, although on the current system and rules the latest government figures suggest that those born since 2011 could expect to pay in about £70,000 more than they receive over their lifetimes.

Dangers of a price cap
Theresa May’s promise to introduce a price cap on energy bills may not improve the situation of those on Standard Variable Tariffs, says the Independent. Prices in this category have risen by an average of 8 or three times the rate of inflation over the past 12 months.

Finding a good deal is getting harder since price comparison sites are not bound to show all the available offers. A majority of utility customers are on Standard Variable Tariffs and could be paying about £300 a year more than they need to for their energy.

Student loan savings
The rise in the repayment threshold for student loans from £21,000 to £25,000 announced by the Prime Minister at the Conservative party conference will save individual graduates £30 per month and up to £15,700 over their working lives, says the Times, quoting research by the Institute of Fiscal Studies. The cost to the Treasury will be £2.3 billion per year. The IFS also says that 83% of graduates will not repay their loans in full (after 30 years any remaining loan balance is written off) and that under the revised rules, 45% of all student debt will never be repaid.

No cheap cover for that
The collapse of Monarch airlines prompted newspapers to ask: was that covered by travel insurance? The answer given by the Times was that fewer than half of travel insurance policies cover the failure of an airline (most also exclude acts of god such as hurricanes, and acts of terrorism). Experts said a plethora of cheap travel insurance policies had whittled away at coverage and policyholders needed to be aware of just what was and wasn’t covered.

Mortgage rates tick up
Some of the best-value mortgage lending offers have been withdrawn as the Bank of England has warned that a rise in interest rates is imminent, says the Mail. But one lender is still offering a 2-year fix at 0.99 per cent and several 5-year fixed rates are on offer at under 2%. Economists expect the Bank of England’s base rate to rise to 1.75% by the end of 2019.

For more on any of these stories – or to talk to someone about your own situation – please contact us here