Pension Scams & HMRC and Fuel Vouchers

This BBC podcast is supported by ads outside the UK. 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. Hello, welcome to this Moneybox podcast. As temperatures hit a new low this week, a UK charity is nearly doubling the value of the vouchers it gives to households on prepayment metres.

A record number of people will need to remortgage this year. Are their choices getting any better? And with days to go before the self-assessment deadline, we have some useful...

tips. But first, hundreds, possibly thousands of people who have been defrauded out of some or all of their pension fund are now being chased by HM Revenue and Customs for tax on money they no longer have.

They were persuaded by financial advisors to cash in their pension and invest it in schemes that promised big returns. In fact, those were often fake and some or all of their money disappeared, but the revenue is still demanding tax on this missing... money because they cashed in their pension when they were too young.

A campaign group based in Parliament is calling for a change in the law to protect them from what it calls the largest tax scandal in British history. Dan Whitworth's been investigating. Dan.

Well, Paul, this all started around 2010 when dishonest financial advisors began targeting people under the age of 55, telling them they could withdraw large chunks of their pensions as cash and use the rest to invest with bigger... turns to make up the difference they were also told that the normal penalty charge for releasing your pension early wouldn't apply that was not

True. And now HMRC is chasing them for 55% of the money withdrawn. The people targeted had good pensions, often in the public sector, like military veterans, firefighters, nurses, police officers. They weren't financial experts and believed what they were told and the promised returns never materialised and in many cases fraudsters made off with some or all of the money.

Now, Sue Flood and her husband had around £230,000 of their pension money stolen. She hasn't received a final bill yet from HMRC 13 years on from when she was defrauded. And she's worried that bill may eventually run into six figures. So there's never any real closure for you. It's the last thing you think about when you go to bed. at night and it's the first thing you think about when you wake up in the morning and when you receive the bill from hmrc that brown envelope lands it's harrowing

It's not stress you feel. It's absolute sheer terror. And that's gone on for 12 years. As well as being a victim herself, Sue is also the victim's representative on the all-party parliamentary group on investment fraud. And she told me the kind of impact this story is having on the many hundreds of victims of both pension and investment scams she's spoken to over the years. Suicidal thoughts, mental breakdown, broken marriages.

lost jobs, financial ruin and bankruptcy. And they even reported that their children who are living under this quagmire, it was reported that they faced ruin because of... The kids had self-harm, low self-esteem, sickness, absence, school refusing. I mean, the only difference between us and those poor post offices, we haven't gone to prison yet.

Now, just a bit of context, Paul, lastly from me, about the people supporting this campaign. The group's members include several leading barristers, a number of senior MPs... also the current chair of Parliament's Work and Pension Select Committee, a former chair of the Treasury Select Committee, and the president of the Pensions Administration Standards Association. That is a lot of serious people.

giving serious backing to this campaign. Thanks, Dan. Well, I'm joined now by Carly Barnes-Short, a qualified solicitor who works with the all-party parliamentary group on investment fraud. Her husband himself has lost money to one. How were people persuaded to take money out of their pension under the age of 55 and trust it to these advisors? Well, firstly, thank you for having me on the show. In what we've seen...

Generally, it's regulated advisers. They have targeted and deceived these victims and they've suffered significant losses. Yes. And do you accept, though, that what... HMRC has said to us is that it's not taxing pensions because there's been a fraud, but because these people, for whatever reason, broke the rules anyone who takes pension money out...

under the age of 55, is charged penalty tax on that money. And, you know, the fact they chose to invest it in something dodgy, then that's a separate matter. Well, I don't think it was a choice. It's missing the point that they were... they were deceived, they were defrauded. Yes, but... In a way, they did make the choice, and I'm sure people listening, and I know our listeners quite well, will be saying they should have known it was too good to be true. The money was saved up tax-free.

For their retirement, you know, of course they should be taxed if they break the rules, people would say. And some would think it was an attempt just to avoid tax. I mean, we're talking about good, honest, hardworking people, key workers, nurses. We've seen firemen. People who have trusted professional advisors to give them advice that they are looking to simply safeguard their future, what we're not seeing is...

cases of people seeking to avoid tax or seeking to avoid paying their fair dues. So you're saying in a sense they were sort of groomed into doing this by people who were after their money? Absolutely. That's the evidence we've seen. Now, we heard some powerful testimony from Sue Flood there in Dan's report. And I know you know and have worked with a lot of the victims. Just tell us a bit more about the kind of impact that this has on them.

I mean, we are deeply, deeply, deeply worried about numerous victims. There's been suicide attempts, people have been hospitalised, marriages have broken down, people are being pushed to the absolute brink. Yes, I mean, and as Sue said, it's just something that's with you all the time. I mean, I think she was saying you sort of wake up thinking about it. Absolutely. I think the length of time they've been dealing with this is...

you know, a real concern. For some people, it's been over a decade they've been in this stressful situation. It's ruining their futures. But HMRC said to us, Revenue and Customs... quote, we take the well-being of all taxpayers seriously and do everything we can for those who engage with us. Is that not your experience? Unfortunately, it isn't. It's not what we're seeing on the ground. We want to see these words translated into practical steps for victims.

And your parliamentary group has also accused HMRC of going after the victims but not chasing the financial advisors and indeed some perhaps fraudsters behind the scam. Is that right? Absolutely. It's something we're very, very concerned about. It's very much a low risk, high reward situation for the scammers at the moment. They're sitting on millions and millions of pounds.

of money that's been stolen from victims whilst it's the victims who are taking all the blame. And they're not being chased. Absolutely. Now, your parliamentary group, it's a campaigning body. What do you want to see happen next? The first thing we are calling for is an immediate pause so that we can safeguard these victims. We're deeply, deeply troubled about their welfare. And we have a meeting next Tuesday with the Treasury to try to call for that.

And in the long term? We'd like to see fraud taken into account as a mitigating factor and for the focus to be on the scammers, not the victims. Right. So when HMRC looks and says this person owes tax, if they've been defrauded... They should pause that. Carly Barnshort from the All-Party Parliamentary Group, thanks very much. If you've been affected by any of the issues raised by this story, search online for BBC Action Line, which has help and support.

After last week's floods, this week it was the turn of frost and snow. Hello there, this upcoming week is looking even colder. Could be the coldest spell of the winter so far, thanks to Arctic northerlies. A lot of layers. Layering up, like you've got your puffer jacket on right now. What else have you got? Have you got your thermals on? T-shirt under my T-shirt. Pretty cold and frosty.

out there this morning there's the risk of some ice in places with some snow showers moving in lots of blankets lots of layers because my boiler doesn't work so yeah it's very cold in my house don't come around Well, it's a bit less cold today, but just two weeks before temperatures plummeted below zero, the cost of electricity and gas was increased by around

5%, threatening a typical annual bill of just under £2,000, and that's nearly double the cost three winters ago. What you pay, of course, depends on how much electricity and gas you use, and many people chose to stay cold. afraid of the cost of turning the heating up, or in some cases even... on. Those in the worst situation, perhaps the four million households on prepayment metres, they must pay up front before they use their energy. And when the money runs out, they can be left in the cold.

This week, the Fuel Bank Foundation, a charity which helps them with vouchers, told Moneybox it's now almost doubled the value of those vouchers from £49 to £89. One person who has benefited from them was Faye. A midwife with three children, she got a voucher after her boiler broke down and her landlord was reluctant to replace it. She started using more expensive electric heaters instead.

I was looking at different avenues of trying to get help with paying the electricity because we had gone through all resources of basically banks.

didn't want to put more on credit cards just for like that for electricity really because of charges and things so i tried to contact charities come across one locally who said that they'd source us some heaters they came with little packs of the kids with like water bottles and fleece blankets and then provided us with a fuel voucher the first one was 49 pound initially and then they gave us

another one of £40 the following day. They said that if we needed it again then we could give them a call when our electricity meter was running past. like one I think a pound and they'd be able to provide us with another one and what's that voucher meant for you oh god without it wouldn't be able to heat the house

Obviously, after Christmas, it's really hard to ask families and things to borrow money. You don't want to be a burden. Everyone's in a situation where it's very expensive to live day by day, never mind borrowing other people money as well. So without that, without that. that voucher, my kids wouldn't be able to stay warm.

That was Fay speaking to our reporter, Joe Krasner. Well, listening to that is Matt Cole, who's head of the Fuel Bank Foundation, which operates across the UK. Matt Cole, why have you increased the value of your vouchers from £49 to £89? Fay got that, of course, in two parts.

Yeah, High Paul, it's really simple actually. It's because we're just seeing that more and more people are needing more help. And as you said, People who prepay have to pay in the moment for every energy they use. And that means that over winter, those people who do prepay...

have to pay an awful lot more than those families who pay by direct debit to benefit from their payments being smoothed. We've assessed the prepaying household across the UK this winter will pay an additional £313 compared to their neighbour who pays by direct debit. debit and that £313 often isn't there.

Wow, and that's why your vouchers are so important. Now, Faye's a midwife, as I said. She and her partner both work. There are three children in the house. Is she fairly typical of people you're helping? Yeah, absolutely. so many people who are in work who are struggling and actually something goes wrong then something else goes wrong then suddenly what was a warm home suddenly becomes a cold home very quickly we don't think that

We don't think it's right that people live in a cold home. Being warm should be the norm, and that's why we acted this month to increase the value of the support we provide. Our £89 will provide around 10 days help, and so it gives people... more time to kind of follow through the advice and the support that we and our partners are giving because we don't want to see people like Faye have to come to us repeatedly. We want to try and put steps in place to stop Faye from needing crisis support.

Yes, and of course she works, and I understand her partner works as well. What lengths are people going to to try and heat their homes if they're having these difficulties paying their bills? These are some of the things we really worry about, actually, because when you've got children at home, if you're...

If your health is impacted by the cold, you will do what you need to do to try and stay warm. And so we see people first kind of limiting heat just to one room and then maybe turning off the heating completely and relying on blankets. But then we see things like people starting to burn rubbish, you know, people picking up.

pallets or buying or trying to find cheap wood and then burning it and those things can have so many negative impacts on people's physical health too you know burning rubbish in a fireplace is really really dangerous if chimneys aren't properly ventilated or if

the rubbish contains toxins, it can really damage your health and well-being too. We get really concerned about that. The coping strategies people have kind of make sense for people at the time, but they can be really dangerous for people too. Like something you might see on a 19th century series on the television. How much money do you give out in a week?

At the moment, last week, just over £800,000. This week, with the weather as it is, we're probably going to just cross the million pound mark. And we're a charity. We're a charity doing this. We're stepping in because we know that people need that support. Sure, a million pounds a week. Where do you find that sort of money? From a mixture of public donations and grants, grants from some organisations in the energy sector and some from some local governments.

councils as well and also from the Welsh and Scottish governments. But funding only goes so far, Paul, and sadly we can't help everybody who needs it. Although we're in around 750 odd centres now across the UK. We're not everywhere. And that's what does concern us too. Yes. I mean, the Department for Energy Security told us that the government spending $104 billion supporting households in general with their bills, I mean, that includes uprating working age benefits.

freezing alcohol duty, but there is, isn't there, the £150 warm home discount, there's £900 cost of living payments, £300 added to pensioners' winter fuel payments. The government's doing something. Why is your help still needed? So you're right, there is some help being provided. But, you know, some of the cost of living financial support, you know, which went to people who received universal credit or disability benefits or pension credit.

Those payments have landed. They landed as winter was starting. There are lots of expenses within a home. Often that money has run out. And the people we see often live in houses with poor quality, sorry, poor levels of efficiency. And so they're using more than...

Other people need to use more energy to stay warm. And just, you know, when the money runs out, you know, if you can't afford to eat your home, you go cold very quickly. So they need your help. Matt Cole from Fuel Bank Foundation. Thank you very much. how you're getting on with your energy bills. Are you keeping up or can't you afford it? Felicity Hanna's here on Wednesday to answer your questions on how to heat your home and...

what to do if you can't pay your bill. Always talk to your supplier first because they can and must help in some cases. You can email moneybox at bbc.co.uk with your energy thoughts and leave a phone number if you can.

Now, there'll be more people remortgaging their homes this year than in any of the last seven years. UK Finance, that represents lenders, says 1.6 million people will be coming off fixed-rate deals in the next 12 months, many of them much lower. Thank you. and it's only slightly less for a five-year fix. But if you have a big deposit and a good credit history, you might be able to remortgage for five years under...

4%, I say as little as under 4%, but of course that can be four times the rate of some fixes coming to an end. Our reporter Tamsin Craftman spoke to some homeowners out shopping in Leeds. I think I'll be alright because our mortgage isn't due for renewal until two years away. We got a really good rate when we got our mortgage in lockdown and seeing the rates that some of my friends have got recently in the last 12 months has been a real worry for when we do have to renew.

Our deal follows the base rate. Fortunately, we can get out. There's no penalty fee to get out of that. So there's like a three and a half percent rate, which I think my partner are going to take on. I have a two-year mortgage, which actually I'm regretting now. Because it'll be up for renewal towards the end of this year. So I was quite worried because the price was going up and up. I'd say that they're coming back down. But when I got my mortgage, actually, it was already pretty high.

It's a worry actually. What are you worried about exactly? Just like affordability and the stress of having to go through and choose another mortgage and worry, you know, how long should I get it for? Is it the right rate? Et cetera, et cetera.

Some views from people in Leeds. Well, listening to that is Nick Mendes, the mortgage technical manager at Brokers, John Charcoal. Nick Mendes, inflation rose slightly this week to 4% from 3.9%. That's at a time when mortgage rates have been creeping down. Is that rise in inflation going to make any difference to the deals on offer?

Hi, Paul. Essentially, not so much. We had seen swap markets go down at the back end of last year, and then they essentially preempted that inflation was going to remain quite stagnant. As a result of that, the forecasting is that we're not going to see any bank rate as early. as as march likely it's going to be more june august time but the long-term picture is that bank rate will come down so the fact is um

Two and five year pricing at the moment is steadily coming down and the margins are closing between the two. Yes, you mentioned swap rates. That, of course, is how these are funded. So if they go up, then mortgages go up. If they come down, mortgages go down. We don't need to know how they work. That's the simple thing about them. Now, mortgage rates are changing quite quickly, aren't they? You have to be quick to get the best deals.

You do. What we're seeing at the moment is that lenders are trying to really be as competitive as possible. But as a result of that, what you might find is that one lender has gone a bit too far than the rest of the pack. We had the co-op that release a product on Tuesday, but due to how they were priced essentially quite a lot cheaper than the competitors, they had to pull by the Thursday. And that was 3.84. Now, there are still sub 4% deals. But if you do see a deal, that's essentially...

quite well priced i wouldn't hesitate definitely try and secure it as quickly as possible yeah if you can get it of course i mean you mentioned 3.84 now no longer but i think there is still a 3.88 deal on the market but you need a big deposit you need 40 deposit and a perfect credit record. Most people can't get those, can they?

No, and this is a really fine balance between sort of average rates and best buys. Now, there will be a mixture of lenders in between that. So I wouldn't be disheartened if you sort of see high fives and six percents. There are a range of lenders below the average rate. a mixture of high street building and building societies that might have a more flexible view but yes unfortunately you do need to have quite a a healthy score and deposit or equity

Yeah, that big deposit. I mean, that's for remortgages rather than first-time buyers in most cases, a 40% deposit, isn't it? And if you can't even get any deal, I mean, what's the standard variable rate now that we talk about? Because that may be what you're left with.

if you're not a good credit risk and don't have a decent deposit? Well, if you do, essentially, circumstances change, what you'll find is that there is a variation between SVR. So Virgin, for example, at 9.49, and then you could have someone as...

for example, as HSBC at 6.99. So depending on who you're with, you are essentially culpable at risk of their SVR. What I would say is if you do find your circumstances have changed, is don't avoid, or essentially avoid going on the SVR because you can still look at alternative options. options such as a product transfer, which will likely be a cheaper rate with that lender.

And of course, to do that, you do need a good independent broker. I'm sure you're not going to disagree with me on that. Absolutely not. People who are listening, though, who are worried about this, they're struggling. They're afraid, like that lady we heard from earlier, you know, what am I... going to do when I have to remortgage? What can they do briefly to actually make sure that they can cope with their mortgage?

For me, there's a few various things that clients... Just briefly, if you would. Yeah, absolutely. Essentially, make sure you budget. and understand what your income and outgoings are and what flexibility you have. But also understand, prepare yourself, typically seven months prior to the end of your fixed rate, understand what the market's saying, understand what your monthly repayments will go up by, and then that way you can be fully prepared.

Nick Mendes of John Charcoal, thank you very much indeed. Now, a deadline approaches for more than 7 million people who must fill in a self-assessment tax return for the 2022-23 tax year, but they still haven't done it. If you missed the deadline of the 31st of January, and that's a week on Wednesday, you will be fined £100 and charged interest on unpaid tax. So don't be one of the...

37,000 people who left it last year to the very last hour before midnight on the 31st. Here's how to prepare from Sarah Coles of Hargreaves Wednesday. If your tax return is still on your to-do list, then as soon as you can, make sure you have your unique taxpayer reference number and that you can access the Government Gateway. So if this is your first time and you've not registered for the Gateway yet, it could take up to 10 days for an activation code to reach you.

If you've used the gateway before, but you've lost your ID or your password, then you can recover them. But you don't want to be doing this at the 11th hour. This year, the HMRC self-assessment helpline won't offer any help with queries it feels can be solved easily online. That's unless you're a vulnerable customer. And you don't want to be scrolling through the site in a panic as the clock ticks down.

Once you start completing the tax return, don't rush the pensions section, because this is a common area for mistakes. So higher rate taxpayers need to claim higher rate tax relief, which isn't always done automatically. Finally, check you've actually paid. So it sounds obvious, but you'd be surprised how many people are so focused on the admin that they forget this bit. And if it's a lot of money, your bank may not let you pay it all at once.

Then once you're done, make sure you press send to submit it. Many have been known not to. Sarah Coles with great tips. And if you complete the form and then find you can't afford the tax you discover you owe, ask HMRC for a time to pay agreement. Go to gov.uk and search. time to pay. Well, I must rush off now because I am one of the 7 million people still to do my form and pay my tax by the end of January. And even if you have done it, you should still rush off to tell your friends to

to this podcast, what conversations you'll be able to have. And remember, you can listen live to the programme every Saturday, midday, BBC. Radio 4. A reminder now that every Wednesday Felicity Hanna peers more deeply into one money topic. As I said, next up is paying those rising electricity and gas bills. Catch it live or catch up.

on BBC Sounds. You can email all your money, hopes and fears to us, moneybox.bbc.co.uk. We do read them all and you might get on a future podcast. In this podcast, the team was Dan Whitworth. Tamsin Craftman and Joe Krasner. Studio Manager, Chloe Wilson. Our editor is Jess Quayle. I'm Paul Lewis and this was a BBC News Money and Work production for BBC Sounds. And now...

What would you risk for 20 million quid? Cobalt. A thriller from BBC Radio 4. Hey Dad. The person you're trying to reach is not available. £603 to Rwandair. That's the price of a one-way ticket to Zimbabwe. Good afternoon, ma'am. We're looking for Mr Manfred Zibanda. Is there a problem? Not yet. They've been in a few times this week looking for the Cobalt that went missing. Would you risk it for 20 million? What the hell is that doing in Zimbabwe right now? Cobalt on BBC Sounds.

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.