Teachers' Pensions and Car Insurance Compensation

This BBC podcast is supported by ads outside the UK. Mmm, I love ravioli. Since when do you speak Italian? Since we partnered with SAP Concur. Their integrated travel and expense platform and breakthrough solutions with AI gave me time back to dive into our financial future. We expand into Europe in 2027.

So, I'm getting ready. Well, you can predict the future? I can predict you'll like that message. What message? Hey, we all got bonuses. You can save for college now. I don't have kids. You don't say. SAP Concur helps your business move forward faster. Learn more at Concur. dot com. Check engine, ABS, or maintenance light on. Take the guesswork out of your warning lights with O'Reilly Veriscan. The service is free and provides a report with solutions verified by ASE certified master technicians.

And if you need help, we could recommend a shop for you. Ask for O'Reilly Veriscan today. Oh, oh, oh, O'Reilly. Auto Parts.

Hello, welcome to this Moneybox podcast. Are you among hundreds of thousands of motorists underpaid by £200 million when their vehicle was stolen or written off? Winter fuel payments will be arriving soon, but we can reveal the government will be taking them back twice from better-off pensioners. And we fact-check fake news stories about the state pension, which have been worrying many listeners. But first...

Teachers who retire in England and Wales are facing long and growing delays before their pension is paid. The teachers' pension scheme is one of the biggest in the country, with two million members. But Moneybox can exclusively reveal the National Association of Head Teachers is so concerned about how the scheme is being managed, it's written to the Department for Education. to demand action over how the outsourcing firm Capita is running it

Moneybox has also had many emails from worried teachers. Dan Whitworth went to Bury and Greater Manchester to talk to one, Joanne Hurst, a primary school head whose pension payments should have begun nearly a month ago. Hello. There you go. Good morning. Are you OK? I'm very well, thanks. So we're a local authority-maintained primary special school, predominantly for pupils in Bury, but we do have some pupils who are out of Borough. This is your office? Yeah, this is. Smile your face. Yeah.

Although she officially retired in August, Joanne Hurst was persuaded to stay on as head teacher part-time at her school in Greater Manchester to help the governors whilst they search for her replacement. And I see a big rack with lots of stickers in.

They've got to earn them first of all, yeah. So I started my career as a nursery nurse 40 years ago and I'm finishing my career as a head teacher in a special school. But Joanne kept her retirement plans in place and... as such was due a one-off lump sum payment and monthly pension payments going forward as from the 1st of September.

Plans for my retirement is to be mortgage free, to have enough money to live quite a comfortable life. And my plan is to retire up in Northumberland, which is very close to my heart. And it's somewhere that I go all the time. One problem with Joanne's meticulous planning, though, she didn't count on the teacher's pension scheme.

The paperwork needed to be submitted in May. It was submitted well before that deadline and I should have received my lump sum on the 1st of September with a pension partway through September itself, neither of which I've received. And it's had a huge impact on me financially because something that I should have paid off at the beginning of September, I haven't been able to do. You mean something you should have paid off, your mortgage? Absolutely. I'm quite careful with money.

I don't buy things rashly. So this was all planned in two years ago with this date in mind. It's not happened. That's then had an impact on my mental health and well-being because I'm worried about when will this money come through. money out that I shouldn't be paying out and losing interest on money.

that I would, should already have in the bank. Each time I ring teachers' pensions, I'm given different advice, conflicting advice. Even though I may ring three times a week, I may get three lots of information. What do you make of that, Joanne? I think it's diabolical. I think it's grossly unfair for people who have worked all their lives paid into a system. It's something that...

It's not a charity. It's something that we are owed because we have paid into it. What are you going to do from a money point of view? Because you don't know when you're going to get your pension, which you need four weeks ago. I've got some savings that I'm going to have to live on. But again, that's not fair when you've planned your retirement meticulously, as I've done, for it then to be thrown into disarray because teachers' pensions haven't paid on time.

What do you make of that? I think it's grossly unfair. I think it is an absolute failing on behalf of a system that people have had a lot of faith in, that people have paid into month after month after month throughout their working lives. Then at the final hurdle for this to happen, it almost feels that we're being punished. It just feels like a bit of a nightmare, really, and something that I don't know is going to come to an end.

Joanne Hurst. Well, after talking to Joanne, Dan went to find out more about the scale of the problem from James Bowen. He's the Assistant General Secretary of the National Association of Head Teachers, which wrote that letter demanding changes.

So we've been quite shocked by the scale of the problem. On an almost daily basis, we're getting phone calls and emails from school leaders hugely frustrated with their interactions with the scheme. People saying they can't get through when they do get through. they're getting conflicting information depending on which day they phone and it's having a huge impact so we have members who want to retire but can't put those plans in place because they're not getting the information

they need and at the extreme end we're even seeing school leaders who have already retired who aren't getting the lump sum aren't getting the monthly payments they're entitled to some of them are being left in sort of financial dire straits these are people who are expecting in some cases to receive

several hundred thousands of pounds, which was going to be key in terms of their financial planning, have been left in complete limbo and in a really difficult situation. Why do you think the TPS is overwhelmed at the moment? What do you think's brought that about?

So I think probably a lot of this dates back to the McLeod judgment. And without getting too technical, basically that was a court ruling that found that changes that were made to the teacher pension scheme were effectively discriminating against younger... younger members of the scheme and at that point as a result of that ruling

People had to make a decision when they got to retirement. One of two choices in terms of how their pension was calculated. Was it final salary? Was it career average? Now, that undoubtedly has had a big impact. It's generated a lot of workload. There's lots of form. that need filling in, lots of calculations that need to be done. And I've no doubt that is a huge part of this. But I'm not sure it explains it all. I think probably there is also just a shortage of capacity.

there as well um and those two things combined are probably creating a situation we find ourselves in now what do you want to see happen i mean i've got a copy of your letter here Given the breadth and seriousness of these issues, you write, we urge the department to investigate and take immediate steps to rectify the problems facing scheme members. What are those immediate steps you want to see happen?

I think the first thing we need to see is some leadership. We need someone to sort of get a grip of the situation. And secondly, I think really it's about capacity. As I say, it seems like the scheme is entirely overwhelmed and it's hard to see a solution that doesn't evolve.

frankly, just putting more people in to be able to answer those queries and handle the demand they're facing. What is your advice to people? It's your members that are part of this scheme. It's one of the largest in the UK, around 2 million members are part of it. What's your advice to people in this situation?

Well, this is one of the biggest problems really, because these people are entirely beholden to the teacher pension scheme. There kind of is nowhere else they can go. They need the teacher pension scheme to get back to them to give the information they need. So they're in a really difficult position. I mean, the only advice I can really give them is...

keep trying, you know, keep putting those queries in, let your union like us know so we can apply the pressure. But I think that just illustrates how difficult this is because they are entirely reliant on the teacher pension scheme. getting back to them, giving them accurate information and then processing their queries. And then just a final point on this, please, James. How would you sum all of this up from the point of view of your members? I think it's just an...

incredibly difficult situation uh and almost kind of unheard of you know you you expect that if you spend your life and your career paying into a pension which you're told is a good pension as most teachers were as I was told you expect when you come to retirement you'll be able to

take that money and enjoy your retirement. But actually, we've got people who can't retire or who have retired and then... haven't received any income or the money they're entitled to and i think anyone listening will recognize that is a really unsatisfactory situation it's frankly not good enough

James Bowen from the National Association of Head Teachers speaking to Dan earlier this week. Dan's in our Salford studio now and Dan, you have some news. Yes, so I had a text from Joanne just this morning. She has now been paid her lump sum, albeit nearly... four weeks late and her first monthly pension payment but she says both are less than she was promised. And what's the Department for Education said to you generally about these delays Dan?

Well, in a statement, the DfE told me, quote, Thanks, Dan.

For years, Moneybox has heard from listeners that insurers have not paid them enough when their car was stolen or written off. Now the Financial Conduct Authority has confirmed that some insurers were paying less than the real cost of replacing the vehicle. It says a quarter of a million people are eligible for a share of £200 million worth of compensation. underpaid claims. Our reporter Catherine Lund has been looking into this. Catherine?

The regulator looked at 12 insurers covering around 90% of the markets and it found that some were routinely knocking down the valuation of a car or van when settling claims. Now the result of that was that drivers... couldn't afford to replace a vehicle with a similar one. It's an issue Moneybox listeners have written to us about before Howard got in touch about his experience when his car was written off after an accident that was not his fault.

I didn't really think £2,500 was adequate. I then spent some time looking on the web to see if I could find a similar vehicle in a similar condition. for £2,500 and I couldn't find anything under £3,500 within 100 miles of our house. I thought it was completely unsatisfactory. So why were insurers paying less than the cost of replacement with a similar vehicle? Well, Paul, I asked Stuart Masson from the CarExpert website that very question.

In some cases, they were assuming a car was sort of a base spec model. They kind of assumed an average level of damage rather than looking at the car and saying, you know what, this car is above average. is worth more than the average car they weren't taking into account optional extras or more desirable colors or things that helped the value of a car they were just basically saying this car's worth six grand

That car's worth eight grand and offering customers what was essentially a lowball offer and customers would accept it. So what we're looking at is more than, as I said, quarter of a million motorists. 200 million pounds, but that works out to about 740 pounds per customer. Gives you an idea of how much they feel on average they were undervaluing these cars by.

And Catherine, of this £200 million compensation, insurers have already paid some, haven't they? Yes, they have. Insurers have already paid out £129 million to 150,000 people. Well, that leaves...

Around £70 million, that's to be paid to another 100,000 or so motorists. Insurers should have been getting in touch directly with these customers, as Stuart Masson explains. The FCA has... work this through with the insurers they are obliged to go through their records and contact customers whose cars have been undervalued so you don't have to actually do anything the insurance companies will get in touch and

confirm that you will be given some kind of compensation. If you don't hear from your insurance company, it's because the reality is the vast majority of customers. The evaluations were fair and reasonable. You certainly don't need to join any kind of claims management actions or class actions or anything like that. The onus is on the insurer to get in touch with you and resolve the situation.

But Catherine, you know, listeners might be wondering if this is still going on. Well, the regulator has warned firms it will step in again if similar practices do resurface. And the Association of British Insurers has told us its members have made changes to their settlement approach and taken the necessary steps to support customers.

Thanks very much, Catherine. And do let us know your experiences of claiming on your motor insurance. It is, after all, the one insurance that is compulsory. Email moneybox at bbc.co.uk or send us a message or a voice note on WhatsApp 0306. 783 183 What are you talking about? SAP Concur uses advanced AI to audit and automatically detect out of policy expenses.

It's the breakthrough I needed to focus more on our future. These are my future expenses? Yes. And self-defense classes are out of policy. I'll need self-defense classes? You will. For what? It's a big dog. SAP Concur helps your business move forward faster. Learn more at concur.com. At the BBC, we go further so you see clearer. Through frontline reporting, global stories and local insights, we bring you closer to the world's news as it happens. And it starts with a subscription to BBC.com.

Giving you unlimited articles and videos, ad-free podcasts, the BBC News Channel streaming live 24-7 plus hundreds of acclaimed documentaries. Subscribe to trusted, independent journalism and storytelling from the BBC. Find out more at bbc.com.

Moneybox has been told by HM Revenue and Customs that it will be recovering two winter fuel payments from better-off pensioners in just one tax year. The winter fuel payment of £200 or £300 will be made in the next couple of months to everyone who was aged 66 or more last Sunday, the 21st. But any individual with an income of more than £35,000 this tax year will have the money. taken back.

The government expects two million pensioners will face that. This winter's payments will normally be recovered in monthly instalments from April. But HMRC has told us that in April the following year, 2027, those monthly payments... will double as it recovers two years' payments in one tax year. More on that in a moment, but first here are some questions from our listeners. I'm concerned how it will be clawed back. Would it be through PAYE?

Would they be asking for a lump sum, if you like, a one-off payment back to the DWP or HMRC? Who may ever be involved? I'm concerned that the club act arrangements by the government haven't... really been explained well enough to pensioners so as they know to make the correct decision, i.e. whether or not they want to opt out of the payment or whether or not they want to have the payment made and then to be clawed back.

Only a portion will be taken back according to the tax rates paid. Those on the basic tax rates will only lose 20%. I'm not too sure what they mean by 35,000 because... Is that gross with the personal allowance not taken off, or is it the net figure which...

Andrew, Margaret and Tony. Well, listening to that is Antonia Stokes. She's technical officer at the Low Incomes Tax Reform Group. Antonia Stokes, we have been getting a lot of questions about this. First, Andrew's question. What does the government mean by 35,000?

income. Hi Paul, thank you for having me on today. So in terms of the £35,000 limit, that is your gross income. So that's before tax has taken off and that is before the personal allowance. So for many listeners, that's going to include things like the state pension.

which is taxable, private pension income, rental and trading profits, and non-ISA investment income. And also just to point out on the interest, that's before any personal savings allowance as well. So if you're a basic rate taxpayer and you have... interest of less than a thousand. You won't normally pay tax on that, but that does still count towards your £35,000 limit. Oh, important point. Thanks. Now, Margaret asked if people will only use 20% because it's based on their tax rate.

Yeah, that's probably a kind of understandable misconception. But with the winter fuel payment, it's not being charged to tax as such. it's just being clawed back entirely. And it's operating on a cliff edge. So if you have income of £35,000 exactly, you get to keep the entire winter fuel payment.

If it's £35,001, then the whole amount is taken away. Not a percentage of it, just the whole amount is taken away and clawed back via the tax system. And that'll be done through PAYE, so there'll be a big cut in your tax code and nobody... People on self-assessment will have it taken away when they do their tax return, as I understand it. We also had this question on social media. What about a couple, both 66, where one has an income more than 35k and the other less than 35k?

Well, so Antonia, for couples, that winter fuel payment of £200 or £300 is normally split in two, so they get £100 or £150 each. Whose income will be tested? Well, it's not operating on a household basis. It's operating on an individual basis. So if we have two people living together, we would look at each of their individual incomes and decide who's going to get a claw back, if anyone. So it could well be the case that one...

person in a household is having their winter fuel payment taken back because their income is over £35,000. And if the other person has income of less than £35,000, they'll get to keep their payment. Yes, that is a bit confusing, isn't it? And what about this question of when? Now, as I understand it, next year, it'll be £16.67 if you've got a £200 payment in monthly chunks every month off your extra. tax. But in 2027, HMRC will start taking double that, £33. Why?

Yeah, that's right. And I completely appreciate that that seems quite counterintuitive and unfair. And I wouldn't really disagree with that. So the reason being is that where HMRC is collecting either tax or a payment such as... such as this through a pay as you earn tax code, they're always eventually trying to get to the stage where they're doing it in the same year that the either, you know, that income or this particular charge is being received.

People will probably notice that they've seen it for bank interest. So in a pay as you earn tax code, they'll see an estimate for their current year's bank interest being included in their pay as you earn tax code. So it's being collected. you know, in the year where HMRC believes they're going to receive it. And that's the kind of position that they want to move to. But in order to do that, there's a sort of transitional year where they're collecting the previous years.

winter fuel payment and then collecting for the current year's estimate of the winter fuel payment. That will mean, won't it, payments going out in April to repay a winter fuel payment that you won't actually get until the next November.

Yeah, and that's another very sort of... awkward part of this whole thing the you know the winter fuel payment is just a one-off payment received in november it's not received smoothly through the year um so yes for for people it's going to be confusing and a bit difficult to get their head around and in scotland it's a few pounds more, it's called the pension age winter heating payment, will the recovery process be just the same?

Yes, it's identical. So even though the scheme is very slightly different in Scotland and it's administered by Social Security Scotland rather than by the Department of Work and Pensions, the clawback is exactly the same and is all taken care of by HMRC.

Antonio Stokes from Low Income Tax Reforms Group, thanks. And there's more information on the gov.uk website, of course. And remember that for almost everyone, these winter fuel payments will arrive automatically. If you get a text asking you to claim, assume it's from your thief. Delete it. Don't click on any links.

And talking of fake messages, you may have noticed some alarming headlines on social media about the state pension being cut or changes to the state pension age. Here's a listener from listener Carina, read by one of our team. Can you tell me if there is any truth in the rumour that the UK state pension may be cut by £140 per month? My pension, which is my only source of income, is only £152 a week.

And if £140 is deducted each month, I shall just be left with £468 per month. I already have great difficulty living on £608 per month and can't see how I will live with less. Well, it's important to say right away to Corena that state pension is not being cut in April.

Quite the opposite. And with us to explain more is Sarah Pennells. She's Consumer Finance Specialist at the pensions provider Royal London. Sarah Pennells, these are pretty outrageous and untrue headlines. Karaina very clearly frightened. Yeah, I mean, it must have been terrifying for Karenia to read that she could lose a quarter of her income because of this so-called change to the state pension. Now, as you said, they are completely untrue. There are no plans to cut the state pension.

But these headlines, I mean, they are designed to provoke a reaction, in this case, fear, to get you to click on them. But they are very worrying and irresponsible. And I think not just for people who already have the state pension, such as Carina, but for those who are heading towards retirement. And especially, I suppose, in a sort of atmosphere where people are discussing whether we can afford the state pension. They may well think they're true. And there's also been...

State pension age, now that's rising in April from 66, but I've seen stories on social media saying that rise has been scrapped. Yes, and again... Completely incorrect as well. So as you say, the state pension age is going up from next April. So currently you can claim the state pension once you reach 66.

But from April the 6th next year, it's rising to 67 over a two year period. So that's going to affect people born from April the 6th, 1960 to... 5th of March 1961, they'll have a state pension agent between 66 and 67.

And if you're born later than that, then currently under current plans, your state pension age will be 67. But again, I think these start often with a grain of truth, because as you say, there is some debate about the affordability of the triple lock, but no plans to cut the state pension. And the state pension age is rising. So people may have heard this age of 67 and think, well, actually, this claim sounds quite plausible. Now, the state pension age, there is currently a consultation about.

plans for it to rise again in the future and whether that could be brought forward. But that's nothing to do with scrapping this rise that's coming in next April. No. And if they are untrue, is it just to get clicks? So people see adverts and that... them money well that's generally what it's about you know it's clickbait so it's designed to provoke a reaction whether that's you thinking you're getting something for nothing

or in this case, bad news, where you think the state pension is being cut. So it's exactly that. It's designed to drive people to the website or the social media account for advertising. And very briefly, Sarah, where can people find the truth? Well, if you see a shrill headline before you worry about it or do anything, check on something like the gov.uk website.

or the independent and government-backed Money Helper website. Sarah Pennells from Royal London, thank you. Or, of course, you can listen to Moneybox, where we never have fake news. Remember, you can hear Moneybox first and live on Saturdays at noon on BBC Radio. Radio 4. And Wednesdays are the day to hear Felicity Hanna with Moneybox Live. Next up, she's looking into private healthcare. What's the experience like and, indeed, what's the cost? You can let her know.

or tell us about any of your money concerns or worries by emailing moneybox at bbc.co.uk or send a message or a voice note on WhatsApp 0306 783 183. In this podcast, the reporters were Dan Whitworth and Catherine Lund, researchers Ema Devlin and Joe Krasner, studio manager Paul Everett. Our editor is Jess Quayle. I'm Paul Lewis, and this was a BBC News money and work production for BBC Sounds. Hello, I'm Amol Rajan and from BBC Radio 4, this is Radical.

We are living through one of those hinge moments in history when all the old certainties crumble and a new world struggles to be born. So the idea behind this podcast is to help you navigate it. What's really changed is the volume of information. That has exploded. And also by offering a safe space for the radical ideas that our future demands.

at the Chancellor and say, radically cut the taxes of those with children. Telling our stories is powerful and a radical act. Listen to Radical with Amol Rajan on BBC Sounds. At the BBC, we go further so you see clearer. Through frontline reporting, global stories and local insights, we bring you closer to the world's news as it happens. And it starts with a subscription to BBC.com.

giving you unlimited articles and videos, ad-free podcasts, the BBC News Channel streaming live 24-7, plus hundreds of acclaimed documentaries. Subscribe to trusted, independent journalism and storytelling from the BBC. Find out more at bbc. Thank you.