Fraud Refunds Report and Savings Tax

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Hello, welcome to this Moneybox podcast. Nearly 3 million people will soon have to pay tax on their savings interest, but how will it be collected? What's the biggest fib you've ever told about money? and more than 100,000 couples divorce in England and Wales each year, but new research indicates that less than a third divide their stuff equally, and two out of three take no legal advice at all.

But we start the programme with the news that for the first time we know how individual banks treat customers who have money stolen from their bank accounts. The payment systems regulator published figures this week which show, bank by bank, what proportion of their money victims got back. It's something campaigners have long called for, and critics say banks have long resisted.

Some of the figures are quite shocking. Dan Whitworth's here. Dan, this really is a big moment, isn't it? It is. And we'll get to the detail in just a minute, Paul. But it's worth reminding people that for all the data, for all the numbers, for all the reports that cover fraud... What this is actually all about is helping try to stop people becoming victims in the first place. People like Jan, Steve, James and Jacopo, who we've heard from on Moneybox this year.

I was just so gutted. I was so, so, so upset that someone could do this to me because... i save i'm saved so hard i try so hard to save money and i watch my pennies the moment i was informed that we had fallen victim to the app scam i don't think i can put into words how how i felt i felt gut punched i i just i felt sick

that all this money had gone. Yeah, I was completely frightened. It was sort of alarming to see all your hard-earned money sort of taken away from you. I was in complete shock how it could have happened. So moving, Dan, to hear those people describing that first horrible moment when they realised their money had been stolen. Tell us what stood out for you in this report about that.

OK, well, what really got me throughout this 20-odd page report, Paul, and I've got a copy of it here with me, is the word transparency. And it's a level of transparency which we've just not had before. This data is all about authorised push payment, or APP fraud, and that's when victims themselves are tricked into transferring money to criminals. They're usually pretending to be from a trusted body like the victim's bank, the police, their phone company, or HMRC.

for example. Now the figures show that of the 14 major banks or building societies covered in the report half of them refunded less than half the money that was stolen from victims. And now we have the names for the first time, Dan. Reveal the league table.

OK, so again, just going through this report, the ones that make up the bottom half of that table are Lloyds Banking Group, which includes Bank of Scotland and Halifax. They refund 49% of the money stolen this way last year. Then Metro Bank, Virgin Money, Starlink... all around 40%. Then Monzo at 22%. And finally, Danske Bank and AIB. Now, the last two mainly surf customers in Northern Ireland. Now, again...

All of them refunding less than half the amount of money stolen from their customers through APP fraud last year. So those are the worst, Dan. Which are the best? Well, the top half of the table, and starting at the top, really clear, is TSB, which has its own unique... fraud refund guarantee scheme, which means it refunds 91% of all the money stolen this way. Second, Nationwide, again, has its own thing. Scam Checker Service, it refunded 78% of all the money.

Below that, HSBC or First Direct, then Barclays, then Santander at 63%, NatWest, RBS and Ulster Bank closely behind, and finally, the Cooperative Bank, which scrapes into the top half, refunding just over half of the money stolen.

So, Dan, named, but are any of them shamed?

Well, I contacted each of the bottom seven performing banks to ask for an interview. All those that got back to me said no. Some did send statements. But here's what UK Finance, that's the trade body which speaks for banks, told me. It said the financial... sector sorry excuse me the financial services sector invests more in countering fraud than anyone else it's the only sector which reimburses victims and a majority of money stolen through app fraud is returned to victims

£152 million in the first half of this year alone. But Dan, we also know, don't we, that nearly all fraud originates either over the phone or online. What have those companies had to say about this? Well, Anthony Walker is from Tech UK, which speaks for more than a thousand technology companies. He told me the sector is making progress in the fight against fraud, with the vast majority of attempted frauds blocked before they even happen in the first place.

We've seen mobile operators working really closely with Ofcom to really reduce the number of scam calls. We've seen real steps taken to address scam advertising, particularly around. um financial services products on social media platforms and so on so lots of work is is happening We have to understand, though, we have to be aware that fraudsters are constantly innovating and whatever measures we put in place, fraudsters will always try to work around those measures.

Anthony Walker from Tech UK. Listening to that is Harriet Baldwin MP, the Conservative Chair of the Treasury Select Committee. Harriet Baldwin... Half the banks listed refunded less than half the money stolen. The worst, AIB, paid back just 10%. Metrobank, 42%. Did all that surprise you?

Well, thanks very much for covering this story, because, as you know, the Treasury Committee has been pushing really hard for improvements to the fraud payment system. And what I see in terms of the data that's been announced this week is it's a positive step forward. its greater transparency. But what I hope it will be is the sort of benchmark of where we can improve from. Because as you know, next year is going to be a big year in terms of reimbursement.

So this year, the parliament put through the legislation. The payment systems regulators have been consulting on making the banks reimburse. people for their frauds and so by this time next year I think you'll be reporting on a big improvement in terms of those numbers. Well we all hope so of course when the voluntary code becomes rules that have to be followed but looking at this week's figures.

Some banks are clearly not doing even what the voluntary code says. Will they try to wriggle out of the rules, do you think, blaming victims for their loss as some do now? Well, I think you're absolutely right that we felt on the Treasury Committee that we've really had to push hard on this, that there's been a lot of foot dragging and reluctance from banks to put in place these reimbursements. I think the reason...

we think it's so important that banks are held accountable is that they know the bank accounts of the people who are receiving the fraudulent money. So they're the ones best able to tackle this. Of course, the technology sector does also need to. work hard to make sure these frauds and scams get caught. But your listeners do have to be really careful when they're making payments and they...

could be tricked. Yes, looking at some of the bigger high street banks, they have been improving, but UK Finance stressed that they give back 152 million of the money, but they leave 86 million to be borne by their customers. What's your message to the bigger banks, the best banks?

My message is that the Treasury Committee will continue to push hard on this, to hold the industry's feet to the fire. We know they're reluctant. We know there's been a lot of foot dragging. We know they'd rather the tech sector took full responsibility.

going to be a joint endeavour and we will be scrutinising this very, very closely. We want to make sure things get better for our constituents. But meanwhile, you know, your listeners do need to be very cautious when they're making these payments.

And of course, Dan was telling us that TSB is top of the table because it does have this fraud refund guarantee, doesn't it? That nearly all, nearly all but a small amount does go back to customers. Nationwide has its scam checker service. Do you think this...

what the report calls a positive cultural shift, will extend once they actually have to refund people to try and stop more of this fraud. Because after all, it's all very well giving people the money back, but the thieves have still got it, haven't they?

Yeah, the thieves are very creative in trying to stay one step ahead of all of these checks. But I do think that over the course of next year, you'll see some big improvements. You're absolutely right that the banks are making investments in technology that are getting... getting better at preventing this. But we do need to hold their feet to the fire because there's been a certain amount of foot dragging here and we will continue to hold the regulator and the banks accountable.

And will you be watching for them blaming customers rather than doing what they should and giving the money back? Well, I think the new rules should really... prevent that from happening there will be uh i think much more of a technological upgrade at banks to prevent people from doing this because at the end of the day the banks know the bank accounts into which the money is being fraudulently paid and so they can really work hard to

prevent our constituents from being tricked in this way. Harriet Baldwin, Treasury Select Committee Chair, thanks very much for talking to us.

Nearly three million people, some with quite modest savings, face the prospect of paying tax on the interest those savings earn from next year. The combination of frozen tax allowances and high interest rates mean that people saving for a house deposit, for example, or with money they've saved for their retirement, could now face an unexpected tax bill.

Basic-rate taxpayers can earn £1,000 of interest on their savings tax-free, but £20,000 in an account earning 5% would hit that threshold, and every extra penny earned would be taxed, unless, of course, it was in a tax-free... ISA. Now, many listeners are confused about how this tax on savings interest will be collected. Donald sent us this voice message. Hello, Paul and the team. I've never earned more than a thousand in interest in one year before.

but this year with the recent interest hikes i and many others surely will what do we do regards to any tax due do we have to fill in a tax return i've never done or even seen one before what evidence do we need I'd be very grateful for any advice you can give. Loyal listener, Donald. Well, a loyal listener and a very worried listener, Donald. Helen Thornley is with us. She's from the Association of Tax Technicians. Helen Thornley, Donald isn't alone asking us questions about this.

Are you getting similar inquiries? Yes, we're getting a lot of inquiries from our members concerned about family members who aren't necessarily in self-assessment, worried about how they're going to deal with this tax issue.

And who will be affected? I mean, I mentioned, you know, 20,000 earning 5% takes you above the £1,000. But there are a lot more complexities than that, aren't there? Yes, nothing is simple. So if you're a basic rate taxpayer, so you earn up to £50,270, then yes, you can have this £1,000 of interest tax-free. If you're a higher rate taxpayer, so you earn over the £50,000 amount...

you can only have £500 before you need to start to pay tax. And if you pay the additional rate, so that's more than roughly £125,000, you won't get any allowance at all and you'll have to pay tax on all of your savings outside of ISAs. Yes, it doesn't just affect wealthy people. I mean, you mentioned those very much higher tax rate payers, but A.J. Bell that gave us that estimate that nearly three million people will be paying tax in 2024 from April 2024.

More than half of them, actually, are basic rape taxpayers. So they're not wealthy people, are they? No, but they'll still have this complication. The key thing is just kind of understanding what information HMRC holds, because they should get told about your bank and building society interest.

So they will, in theory, then be able to contact you and let you know if you need to pay any tax. So every savings account, the bank running it, reports to HMRC what each individual earns an interest in a tax year. Yes. So in an ideal world, HMRC should have all of your details. They receive something like 100 million bank accounts worth of information and they match that using names and addresses. So the only issue is that this matching process isn't always perfect.

So it's always worth checking what HMRC think that they have on you. Yes, checking at the end of the year. But of course, that can be quite tricky, can't it? Yes, it's not straightforward. So, I mean, it's a bit of a dull admin job to go through your bank accounts and see what you've earned. So for this current year, you'd be looking from the 6th of April 2023 through to the 5th of April 2024.

But it's worth doing that because at the same time as you're adding up to see what interest you've had and whether you might need to pay tax, you can have a look at whether you're in... in getting the best rates in the appropriate savings account. So try and look for the positive side while you're doing the boring tax bit. At least it just only involves adding up, which I'm sure all our listeners can cope with. It's not a complicated calculation.

People with money in ordinary savings accounts is what we're talking about. The interest is taxed once it exceeds those limits you mentioned. But of course, any amount of cash held in an ISA, a tax-free ISA, is tax-free. Should people be thinking of moving their money to an ISA if they don't have one?

Well, that is the benefit of the ISA, that the interest earned is tax-free. So it's a case of just having a look and thinking about whether an ISA would be a good idea for you. Sometimes the interest rates are lower, so you need to go, well, would I...

Will I be better off getting a higher interest rate but paying some tax? Or would I be better off not paying the tax and putting it in an ISA? And, of course, you're limited how much you can put into an ISA. So this is potentially a long-term problem and you can only put up to 20%.

20,000 a year into an ISA. Yes, 20,000 a year. I'm sure some listeners are thinking chance would be a fine thing, but at least you can do that. And of course, if you're a couple, you can both do it. And talking of couples very briefly, is it worth couples? thinking of moving savings from the better-off partner to the one who pays less tax.

subject to you trusting your partner. You are allowed to move some personal allowance between a couple. What you can't move is your savings allowance. So if one of you isn't using your savings allowance then it is possible to transfer but you've got to physically put the cash in their name. And they could run off and spend it on something that you weren't happy about. What a nice thought. Helen Thornley, Association of Tax Signs. Thanks very much.

Now, still on the subject of telling the truth about money, which we always do, of course, on Moneybox, but it does seem most people don't do the same. Recent research suggested two out of three British adults have told a financial fib. lied about their earnings or what something cost, taken out a secret loan or maybe kept hidden secret savings. The review platform Trustpilot asked 2,000 UK consumers and found 67%, that's two thirds,

admitted they had told an untruth about their money. Our reporter Sandra Hardiel went to Didsbury in Manchester to ask people there to tell her the truth about their money lies. My husband just got a new job and I definitely am keeping his salary a secret. This one time I'm having like a money issue, like don't have enough money and stuff.

I tend to hide it from my family because I don't want to worry them. But most of the time I'm very transparent with them. To be honest, I share everything only because in the past I struggled a bit financially. I've learned from that. So now I'm very, yeah, very open about it. How comfortable are you when it comes to talking about money with your loved ones? Not very comfortable. I suppose I'm...

I think my money's my money and his money's his money. So I just think unless he asks, I don't need to talk about it. What's the biggest lie you've ever told when it comes to money? Oh, the biggest lie I've ever told?

The biggest lie ever is when this one time I need to borrow money from like my friends and I told them oh this is for like shopping and stuff instead it's for like my work how much money i've got in the bank i haven't said at a time that i owed a fair bit of money but nobody asked me if that makes sense i suppose that was more to do with depression in a sense brushing it under the carpet as opposed to lying so when somebody did actually say are you okay and I said no and they helped me

Well, that was people in Didsbury talking to Sandra Hardy. I don't envy her the job of shoving a microphone in front of someone and saying, tell me the lies you've told. And I must say, you're all being a bit coy about telling us. Someone has tweeted my tax returns. I certainly hope that isn't true.

because that's the path to trouble. And another one has said, well, it's the old chestnut, isn't it? The cheques in the post. Maybe everyone's done that. But you haven't really told us any good lies yet. So moneybox.bbc.co.uk would like to hear. from them.

Now, every year, over 100,000 couples divorce in England and Wales. But new research has found that less than three in ten divide their money and property equally between them, even though that's what the law generally says should happen. And that may be because two out of... don't get any legal advice. Only one in ten end up in court. The majority negotiate their own arrangements or simply reach no settlement. Moneybox listener Coral told us this week she didn't see the need for lawyers.

Or courts? It was an amicable divorce that required no solicitors at all. We simply downloaded the appropriate documents online, signed them, filled them in. I don't think you can have an umbrella. attitude to this because divorce is personal. My now ex-husband and myself came to a sensible and equitable decision to simply split everything 50-50.

Moneybox listener, Coral. Well, those findings I mentioned a moment ago are from a survey of 2,400 divorced couples by the University of Bristol Fair Shares Project, which is funded by the Nuffield Foundation, a charitable trust that promotes social well-being. The lead author of that report is Professor Emma Hitchings. Professor Hitchings, Coral and her ex-husband did their divorce themselves, like two-thirds of those you interviewed. It worked for them. What did your research find?

Well, I think Coral's case provides a good example of what we came across in the research in a number of respects. First, in relation to process, of those who had come to a full or partial arrangement, the majority of arrangements were made by divorcing parties themselves. So Coral's case is very similar to what we found. Couples taking a DI...

why approach to settlement. In Coral's case, it was great. She was able to discuss her finances with her ex-husband. And what we found in the study was that the reasons for using lawyers and using courts in preference to other forms of dispute resolution. were primarily concerned with a lack of ability to negotiate with the other spouse, which may be due to a range of factors, including...

power relationships. In relation to our outcomes, I think coral actually is in the minority when it comes to the overall asset split, because in the study, we found that equal sharing of assets was actually...

not the norm. And only 28% of divorcees reported receiving around half of the total assets. Yes. And as we heard in that previous item, many couples won't actually know what assets the other has or their value. the particular problems there? Oh it's potentially incredibly problematic because one of the key findings from the study was that we found a lack of awareness understanding and interest in finances particularly

pensions amongst many divorcees. Over a third of divorcees not yet drawing their pension did not know the value of their own pension pot, let alone their ex-spouses, with women more likely than men to say they didn't know. Just under a quarter of divorcees did not know what type of pensions they had, whether they were defined benefit or defined contribution. So, of course, this lack of awareness and understanding of pensions fed through as one might expect into how, if at all,

all pensions were taken or not taken into account when couples sought to make their financial arrangements. And also it means that they're in a potentially weak position when it comes to negotiating with their ex about how to share out their assets. And you mentioned women there. And does that mean that women tend to be left worse off than men?

They do, absolutely. And the study highlights particularly the financial vulnerability of many female divorcees in the years following divorce, particularly mothers and those in older age compared with men. And I think a lot of that is down to...

Mothers more likely than fathers to be working part-time rather than full-time. More mothers than fathers with dependent children who they've had lower incomes and husbands during the marriage due to childcare responsibilities, meaning they can't work full-time.

And also meaning they built up smaller pension pots than their divorced husbands, pointing to greater financial hardship in later life. Yes. And you found that a minority got legal advice. Only one in 10 went to court. Is that because people are put off? by the cost. They're afraid of what lawyers will charge them.

Yes, I think it's important to note that a sizable chunk of those who did not use a lawyer were deterred by fear of costs, according to the research that we found. Although I think for a majority of divorcees who had incurred legal mediation costs... in the study, the legal costs were actually comparatively modest with a quarter having to find less than £1,000. Yes, I mean, £1,000 sounds quite a lot, I'm sure, to many people. It would really put them off.

briefly literally in a word there is a mediation voucher scheme which is 500 pounds towards mediation in a word is that worth thinking about I think any route towards settlement and money that is helpful is going to be helpful for individuals. But I think individuals have to realise mediation is also going to be appropriate in certain circumstances. I think the key message is that...

dispute resolution. It's not a one-size-fits-all approach. Different things will suit different people. Professor Emma Hitchings from the University of Bristol, thanks. And the law is different in Scotland, though legal advice is still recommended.

Well, there's no need to get legal advice or indeed ask a judge before you listen to the Moneybox podcast. We share all our information with you every week. If you don't subscribe... Do it now. And remember, you can hear the latest Moneybox every Saturday at noon, live on BBC Radio 4. Subscribers also get Felicity Hanna every Wednesday afternoon with Moneybox Live, where she dives a bit deeper into...

to one financial topic. Next up is love and money. All about finances in your relationships. New and ended. Catch it live on Wednesdays at 3. BBC Radio 4. Or of course catch up on BBC Sounds. We love to hear from you. So email moneybox at bbc.co.uk to tell us your money tricks and treats. I saved that one from Halloween. We do read them all and you might get on the show. And just in.

we've had an email confessing to a lie, which is anonymous. I always have to lie about the cost of our holidays. My husband thinks everything costs half of what it actually does. As my income is greater than his... I think that's OK. So that's one email about lies. Not very many of you owning up here. Today, the reporters were in this podcast, Dan Whitworth and Sandra Hardiel, the researcher, Joe Krasner, the studio manager, Lucy Harper. Our editor is Jess Quayle.

I'm Paul Lewis and this was a BBC News money and work production for BBC Sounds. Even Moneybox, though, can't change your life this much. Life can be unexpected. It was big. This was not a wind, this was not a storm, this was a tsunami. But when confronted with change, humans are remarkably resilient. I knew in that moment as I fell to the ground that I would recover more.

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