In this insightful discussion, Dan Whitworth, a reporter for Money Box, delves into the looming financial challenges faced by middle-aged households in light of the forthcoming budget. With rising costs forcing difficult choices, he highlights a staggering rise in households struggling to balance heating and food. The conversation also tackles the implications of changing interest rates and warns about the pitfalls of unregulated 'finfluencers' giving potentially harmful financial advice online. Discover how to navigate these turbulent financial waters!
The upcoming budget is expected to increase taxes significantly, particularly impacting middle-aged individuals facing economic hardship amid rising living costs.
The rise of 'finfluencers' has led to increased scrutiny by regulators, emphasizing the need for consumers to verify financial advice for credibility and safety.
Deep dives
Upcoming Budget Speculations
The forthcoming budget has generated significant anticipation due to the expected increase in national insurance contributions, projected to raise at least £20 billion annually. This tax rise, however, will only address half of the £40 billion gap identified by Rachel Reeves, leading to speculations about potential changes to inheritance tax, capital gains tax, and the tax benefits relating to pensions. In reaction to the rumors, there has been a notable surge in capital gains tax receipts as individuals rush to crystallize their gains before any changes take effect. Public sentiment is filled with both hope and concern, with many individuals inquiring whether the tax threshold for pensioners will be increased amidst fears of additional financial burdens from unseen taxes.
Changing Landscape of Financial Vulnerability
Recent research has illuminated a shift in financial vulnerability among different age groups, particularly highlighting that 30% of individuals aged 34 to 55 are grappling with economic hardship. This new data contrasts with the stereotype that financial struggles predominantly affect the elderly, suggesting that middle-aged individuals, especially those with dependents, are now more frequently in precarious situations. Personal stories, such as that of a full-time NHS worker, reveal the severe choices many are forced to make between essential expenses like heating and food. The findings stress the need for proactive governmental support and greater awareness of existing assistance programs to mitigate these challenges.
The Perils of Unsanctioned Financial Advice
The increase of social media influencers providing financial advice poses a potential risk for young people, with many falling victim to scams or misleading information. The Financial Conduct Authority has responded to the rise in unregulated advisers by scrutinizing the content shared on platforms like TikTok and Instagram. Young individuals often express a preference for advice from family over online sources, recognizing the questionable credibility of many social media figures. To avoid financial pitfalls, consumers are encouraged to verify the legitimacy of financial advisors and products through the Financial Services Register, ensuring informed and secure financial decisions.
There are just a few days to go until Rachel Reeves stands up in Parliament to deliver her first Budget as Chancellor. Since the Labour Party won the election in July, there's been a huge amount of speculation about what she might do to plug what she calls a 22 billion pound black hole left by the previous government. The Treasury says it does not comment on speculation around tax changes outside of fiscal events. But what tax changes might she make and how are people already preparing?
Figures seen by this programme suggest 2.5mn households will face tough decisions this winter about choosing whether to heat their homes or put food on their table. That's an increase of 400,000 in just a few months. The numbers come from official data modelled by the consultancy firm Baringa and indicate many of those who will be affected this winter are middle aged people struggling to get by.
What do changes to Premium Bond rates mean for savers and where are the best deals at the moment?
And, as the Financial Conduct Authority cracks down on some so-called “finfluencers” – for potentially giving money advice illegally – how can you spot the good from the bad?
Presenter: Paul Lewis
Reporters: Dan Whitworth, Jo Krasner and Emma Smith
Editor: Jess Quayle
(First broadcast 12pm Saturday 26th October 2024)
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