Bailiffs and Premium Bonds

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And Ernie can now pick three million premium bond winners in 12 minutes. Will he pick you? But first...

Charities, debt advice providers and industry groups have told Moneybox they welcome government proposals to regulate bailiffs in England and Wales. The proposals were revealed earlier this week by the Ministry of Justice at the start of a six-week consultation. The changes are designed to help people like Des. He got a £65 car parking fine, but an accident at work forced him to quit and led to him suffering months of depression. He couldn't even open his post.

So the first he knew about the fine was when a bailiff turned up at his home demanding money tomorrow. There was a knock on the door and my grandson answered it and then brought. a letter up saying that I owed £450 or £456 and if it's not paid by tomorrow they'd be gaining access to the house and taking what. You know, that equals what I owe them. And at that, I was just, oof. I rang them up. I said, look.

Is there anything I can do? Oh no, too late for that. Too late for that. I'm not having it. You know what I mean? Just make sure the money's there tomorrow. Else we'll be coming in and taking it. And I sort of go, so you can't do that. He said, we will. Don't worry. We'll tell you what we can do. Well, one man's experience of enforcement action by bailiffs. Moneybox reporter Dan Whitworth is now sold for the studio and he's been looking at these plans, Dan.

OK, Paul, so there are three ideas being talked about. Now, the main one is more regulation of bailiffs, and that would be in the shape of an independent statutory body accountable directly to Parliament. So a bit like a bailiff ombudsman with legal powers to... Now at the moment there's something called the Enforcement Conduct Board which holds companies to account and drive standards right across the bailiff industry. But...

That was only set up a couple of years ago, and whilst it does cover 96% of bailiff companies, it's a voluntary scheme. So there are 4% of bailiff companies that have chosen not to sign up, and they carry out hundreds of thousands of enforcement actions each year.

So a regulator that companies would have to sign up to and indeed people like Des could complain to. What are the other proposals? OK, so second is the earlier and cheaper settlement of debt and that would be by reducing the number of doorstep visits bailiff... can make.

Now, that would work by delaying the time bailiffs can visit after first sending a letter from the current seven to 14 days, or even 28 days if a debt advisor requests it, because people can be charged more than £200 when a bailiff visits. And the third proposal, Paul, is for a 5% rise in fees that bailiffs can charge for collecting debts. Now, there were up to an estimated 8 million cases of enforcement action last year in England and Wales. And the Ministry of Justice says the vast majority...

are carried out fairly and respectfully. Now, most of them are for things like parking charge notices, then comes council tax, followed by things like rent arrears, court fines and taxes. Here's Des again, who was helped to get back on his feet, by the way. my free debt service provider Money Wellness, on what he thinks about these proposals. I think it's absolutely fantastic. Now, you've got no one really who can stand up for you.

And once it starts going into Parliament and under their regulations, you're no longer going to get bullied at your door. You're protected 100% and protected by law. Now, as you said, Paul, these proposals have been broadly welcomed. Debt charities say they're long overdue, though, and that any regulation must root out systemic issues to fully weed out bad behaviour. Whilst the trade industry body, the Civil Enforcement Agency,

He told me the 5% rise in fees will help firms recover £1 billion of taxes and fines, a lot of which is public money, and of course vital in providing essential services. Now debt collection in Scotland and Northern Ireland is very different. Thanks, Dan. Earlier this week, I spoke to the Minister in charge of all this at the Ministry of Justice, Sarah Thackman, and asked why she wanted to regulate bailiffs.

I think the clip that we just heard there from Des sums up why we are proposing legislation. People who... through often no fault of their own, through experiencing tough life experiences, a bereavement, an accident, have fallen into debt. And that really can happen to anyone. The fear that the visit of a bailiff can put into people's hearts is one that no one wants to go through.

And it seems to me to be scandalous that at the moment there is no statutory oversight and regulation of the bailiff industry. At the moment, the accreditation scheme that exists, and there are many good... practitioners in this area is a voluntary one. And that's why we're proposing statutory regulation of the sector so that no one anywhere in the country feels the aggressive or sharp end of unregulated bailiff practice.

So the agents, they did mislead Des, didn't they? They can't come in and take your stuff tomorrow. They can't come in at all unless you let them in or leave a door open. Would that be stopped by your proposals? Well, what we're looking at is a very balanced framework. work to give those who fall into debt more time to seek debt advice get back on their feet because as a society that's what we want to see we don't want to see people

fall into debt or lose their homes. And what I hope is that these proposals and the legislation that we are looking at, that this will provide people with the sort of protection from the sort of sharp practices that DES... experience. I think most people would agree with you but what I asked was will statutory regulation stop that?

I think the Enforcement Conduct Board which does a very good job with its voluntary accreditation scheme has already bought brought into place higher standards consistency of practice and will have a strong deterrent effect if it's given the teeth to be a strong proactive regulator of course we can't guarantee that all abusive aggressive

behaviour on the part of Bayliss will be eliminated. But I hope that by strengthening the legislative framework, giving the ECB the powers that it needs, that we can create a fairer enforcement sector for all. Now you mentioned giving people more time. Explain what you're planning there because that's from a previous set of proposals that you've now accepted, isn't it?

At the moment, bailiffs are only required to give people seven days notice. And again, we heard from Des the fear that those notices can put into the hearts of people. Seven days is not very long to allow a financially vulnerable person to access debt advice, to get in place a payment plan. And so what we're proposing and asking for people to consider is giving people a longer period, at least 14 days. and up to 28 days if a debt advice service suggests it to get their house in order.

And one of the largest providers of free debt advice said 28 days is just not enough. If people are already engaging with debt advisors, it shows they're serious about dealing with the debt. So why only 28 days? They would like longer.

We've got to have a balanced process, one that gives the financially vulnerable... the opportunity to get back on their feet and seek debt advice but at the same time allow those people who are seeking to recover their monies a fair chance at the process as well and we think that these proposals strike the right balance but of course we maintain an open view you mentioned financially vulnerable people and

Obviously people who can't pay their bills are very often vulnerable in many ways. But you're proposing to put up the charges that can be made on them. £79 for sending a letter, for example, 5% more than it was. £422 altogether if it gets right to the final stage. Isn't that out of proportion to the money they owe? I mean, Des had a £65 parking fine and was told he had to pay £456.

Well, the package of proposals that we've put forward are there to enable those who fall into debt like theirs to resolve their... situation more cheaply and more quickly. But we've got to create a sector that is fair to both creditors and debtors. If we want a sustainable enforcement industry that

behaves with greater fairness, with less aggressive behaviour and treats people with dignity and indeed kindness at a low point in their life, then we've got to ensure that that is properly funded. And do you think £79 for writing a letter is fair? £422 added onto a relatively small debt. You think that's fair for people who are vulnerable and can't pay their parking fine or their council tax?

Well, we've got to have an enforcement sector that's fair. And ultimately, many of these arrears relate to things like council tax, monies owed to the public person. the sorts of monies that go to financing the services from which we all benefit. And the fact that we are putting together a package that allows those who fall into debt. greater opportunity to get back on their feet to meet those debts and those fees. That's all part of the package.

Justice Minister Sarah Sackman talking to me earlier. I did ask her also about when those changes might happen. She said they'll be put in place as soon as parliamentary time allows. The campaign, as Moneybox has spoken to, will push for that to be in months. Yes, not years. And to have your say on the consultation, there's a link to it on the At Moneybox site on X. At Moneybox on X.

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After all the anticipation and with the details released two days earlier, the Chancellor had just this to say about winter fuel payment in her spending review on Wednesday. Earlier this week we announced that over three quarters of pensioners will receive the winter fuel payment this year.

And dare I say, what she did tell MPs, well, could be misinterpreted. In fact, the coming winter, all pensioners in England, Wales and Northern Ireland, born on 21st September 1959 or earlier, will get the 200 or 300. £300 household payment, but around 2 million of them, with a taxable income over £35,000, will have to pay it back through the tax system from April.

Extending the payment well beyond the people receiving pension credit, like last year, was warmly greeted by these pensioners at a community centre in Blackpool as they listened to the Chancellor's speech. said in my spring statement, the world is changing before our eyes. Your pension you've worked for, they're entitled to get this winter fuel. I didn't get it last year, but I will get it this year again. And it makes a big, big difference. It's a lot of money for heating.

And long may it last. It's fantastic. That's what I say, fantastic. As soon as a lot of people who are getting it don't need it. When you think of how much they're having to fork out, that is going to be one big lump of something and youngs. That's what it's for, isn't it? You're going to say, well, I've got that. I can say that I've been well in advance. But other than that, you've got to wait a year again.

Well, as soon as the Chancellor sat down, emails started arriving at Moneybox from listeners asking questions about exactly how this will all work. Here's Anne and then John. Hi, Moneybox. My winter fuel payment was taken away. It's been returned now, but I'm puzzled. I was wondering how the money would be paid. Would it be last year's payment as well as this year's?

And would it go straight into our bank accounts? I am a pensioner. I reckon I earn about £18,000 or £19,000 a year. Nowhere near the £35,000 threshold that the Chancellor has set. can do without it because I'm lessening my energy use as much as possible. I really want to sort of opt out if I can.

Listening to that is Catherine Ford, a Chartered Tax Advisor from the Institute of Chartered Accountants in England and Wales. Catherine Ford, let's deal with Anne first. Will it include a payment for last year and will it go straight into her bank account? Hi, Paul. No, the announcement this week is purely for the winter fuel payment for this year, for November, December 2025. So Anne won't get a backdated payment for last year.

But it will go straight into her bank account, as I understand it. It will be paid, yes, correct. And how exactly will it be taken back if someone is over that £35,000 threshold? What counts? Okay, so it's all of your taxable income, so pensions, employment, if you have rental income, dividends, bank interest, those would be the main sources. Yes, and how will HMRC recover it?

So the main route will be through your tax code. So if you have another job or if you have another pension, your tax code will be adjusted approximately in the summer of 2026. And the adjustment will be. and collected back through your tax over the rest of the tax year, the following nine months. Yes, so that will apply to most people. Others might get a sort of simple self-assessment.

Correct. Yeah. So if you're not, if you're not got a code yet, it will be through simple assessment. And you mentioned savings and dividends. Is that the whole lot or just the amount above the allowance that we all get? It will be the whole lot that counts. Even though some of it will not be taxable, it will count as income for this purpose. Right. And Catherine, here's a question many people are asking.

I'm Deidre Kerr from Dalton Infernus, Cumbria. I would like to know if the £35,000 limit is per couple or per person. So, how will that be done? So the limit is per individual. So they're not looking at combined household income. So each of them, as I understand it, will get half. If it's a £200 payment, they get £100 each. one might lose it, one might keep it. Potentially, yes, but it's looked at an individual level.

Now, the government told us it's right that support for fuel costs is targeted, but is this a complicated way of doing it, giving it to everyone and then taking it back from some? There isn't really another easier way to do it, unfortunately, because they won't know what people's income is until after they make the winter fuel payments. Obviously, it's a question for debate as to what you think the fair... is for recovering it.

Yes, I mean, they set £35,000. They said it was roughly average earnings. And, of course, John asked us about opting out. Another listener whose income is over that £35,000 threshold emailed us to ask, is it better to opt out or accept the allowance? and then have it taxed back later. So in terms of John's question, we don't know what the system will look like yet for opting out, but we do expect that people with income under £35,000 who don't want to receive it will be able to opt out.

If your income is over £35,000, then it really might come down to how good you are at managing your finances. So for some people, it might be easier to opt out because the alternative you receive it. you probably might spend it and then you may struggle to repay it later on.

Or, of course, you could pop it in a high-interest account and keep the interest and lose the rest. Yeah, some people gift to charity as well. Yes. Finally, Catherine, Amanda re-mailed us saying she'd had a text message inviting her to claim the winter fuel payment. That's fake, surely, isn't it? It is, yes, unfortunately. I'm aware of one circulating called an energy support grant that claims to be from DWP and tells people that they need to apply by the end of this weekend.

which makes it look like it's a phishing scam, unfortunately. So please don't click on that. The payments are made automatically. Yeah, don't click and delete it. Catherine Ford from the Institute of Chartered Accountants in England and Wales. Thanks very much. Ireland and Scotland extra money because of the changes in England and Wales, the Northern Ireland executive will implement the same scheme. Scotland has still to decide. And now, suddenly, it's 1960.

It's the start of 5,000 quid premium bond prizes, and appropriately the Premier was there to press the button. I will now wish well to this scheme, to all forms of saving, to the premium bonds, say once again how vital savings are. for the whole future of the nation and now formally start only on his work.

Well, that was four years after premium bonds were launched and it was Prime Minister Harold Macmillan pressing the button for the new biggest prize from Ernie, the premium bond number generator. £5,000 then would be worth around £100,000 now. So it was a big deal. But today there are two... £1 million prizes every month, drawn by the new quantum version of Ernie, the great-great-grandson of that original. And he has to pick them from 131.

billion bonds in each monthly draw. Moneybox reporter Ema Devlin went to talk to people in new mills in Derbyshire. Do you have any premium bonds? I do, yes. I win most months, it seems. Enough to keep me investing back into the premium bonds. I reckon they're matching what I would get in a different type of investment. No tax to pay on the prizes. Yeah, it works out.

well for me. Why did you choose that over something else? Well I'd got some money and I'd reached the limit of what I could invest on an ISA so I thought we'll put into premium bonds. Yeah I got some when I was born, my nana bought me some. i've never won on them we've had them in the past they sat there and sat there and nothing happened you never win anything so cash them in yes i've got a thousand pounds worth only a couple of small wins nothing serious

I thought it might be a good return. I thought the odds of getting something back were better than what it's proved to be. Listening to that is Sir David Spiegelhalter, Emeritus Professor of Statistics at the University of Cambridge, author of The Art of Uncertainty. Sir David, you mentioned premium bonds in that book. Do you have any?

Yes. Yeah. In the book, I talk about the fact that I got one on my fifth birthday in 1958, which I've still got. And over the subsequent 65 years or so more, I've built up to the full. limit £50,000. Right, and what do you get from that £50,000 bonds? Last year, I got £1,250, which works out at 2.5%. And, of course, it's tax-free and you don't lose the stakes. So I'm fairly happy with that. And, of course, it's national savings.

by the state. And I must say, I think you've got a twin on X. And he said, my oldest premium bond is dated 1-1-1957. £20 and bought for my mum. And I think to date it's won £50 in 1986. So if you've just got a few, you're not going to win very much, are you? Well, there's this great story. Just this month in June, someone from Essex won £10,000. And they only had one £10 premium bond that was bought in 1987.

38 years ago. So unlike the people who had cashed theirs in that you talked to, they just stuck it in a drawer and kept it and probably forgot about it. And now it's just won them 10 grand. And just a reminder, David, how do premium bonds... Bonds work. You buy the bonds. What happens next?

Yeah, I mean, as you mentioned, there's 130 billion of them. And every month, EARNY, which stands for, let me get this right, the Electronic Random Number Indicating Equipment, picks numbers out at random. And about one in 22,000... and get a prize. And as you mentioned, there's currently two £1 million prizes, but the great majority get £25, £50 or £100 and altogether about £400 million a month is given out tax-free.

Yes, and James has asked us, if you've used up your ISA allowance, where you can save tax-free, of course, what's the minimum amount of premium bonds to get a realistic return? Yeah, well, the point is, whatever number of premium bonds you've got, it's a 3.8% average return because that's the amount given out in prizes. But if you've got a few, the variation around that...

is absolutely enormous and that most years you won't win anything at all. The more you've got, the more reliable is your income. And I did some simulations. I got AI to write the code for me. What about a million people? who held the maximum of 50,000 bonds. And the point is, the average win is £1,900. That's 3.8%. But about two-thirds will get less than that.

because that number is pulled up by the big winners. So the median win, that's what the average person gets, is 1,650, 3.3%, which I think tax-free is a pretty good return. I was a bit unlucky. I only got 2.5% last year. And the variation is, there is some variation. About 1 in 10 people would get less than 1,150. About 1 in 10 will get more than 2,500. But as I said, the variation decreases as you get more.

Yeah, so that's why it's worth having £50,000 if you can conceivably afford that. I'm sure listeners are shouting at the radio, chance would be a fine thing. I know, I know. All I can say, it did take me 65 years to have done that. But of course you're protected.

by the law of statistics, which is much more reliable than the law of the land, isn't it, very often? And how would this compare, though, for example, if you did put money into an ordinary savings account, you can get 4% now. If it's in an ISA, then it is taxed. Briefly, how would it compare? Well, I think, again, ISIS would be better, as the man said, when you run out of your ISIS.

premium bonds seems a fairly good deal, particularly if you're a higher rate taxpayer. And the other side of it, of course, is that I just like them. I mean, there is this chance of winning a lot of money. And it's, I mean, a savings account really is the most boring thing on earth. But every month... And if you've got your full whack, there's a 90% chance of winning something each month. Almost every month.

you know, you get a little notification and I like to see how much it is. So do log on and look. First thing I expect, Sir David Spiegelhalter. Thanks very much indeed. Well, there's nothing random about the Moneybox podcast. It arrives back every... week like clockwork a couple of hours after the live programme on BBC Radio 4, Saturdays at noon, which you can listen to live to hear the stories first. And if you subscribe to the podcast, the Moneybox Live podcast appears

like clockwork too, every Wednesday afternoon with Felicity Hanna. Next up, I'm not on the programme, but you might think I am when she talks about artificial intelligence, AI, and your finances, chatbots, robo... advisors? Even would you let AI make financial decisions for you? You can email your thoughts and questions on that or any random money matter to us at Moneybox. That's moneybox at bbc.co.uk or send a message or a voice note to our WhatsApp 0306 783.

In this podcast, the reporters were Dan Whitworth and Ima Devlin, researcher Joe Krasner, studio manager Joe Pakman. The editor was Rob Cave. I'm Paul Lewis and this was a BBC News Money and Work production for... BBC Sounds. Hello, I'm Manushka Matanda-Doughty, the presenter of Diddy on Trial from BBC Sounds.

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When Vivint Smart Security gives you a smarter way to protect, and its smart thermostats give you a smarter way to save, well, that's a smarter way to live. Get the smarter home system that just gets you at Vivint.com. Make money predicting football. Now you can. Now in Texas with Calci. Calci is the only platform that lets you legally trade on real world events in all 50 states from football to Bitcoin, the Oscars, and even politics. If it matters, you can trade on.

it. Trade on who wins each game, props, spread, and more. Legally, now in Texas. Don't miss your shot. Download the Kalshi app or go to K-A-L-S-H-I dot com. Use code PODCAST and get $10 when you trade a This is an investment that carries risk. CalSheet.com.