Chair of the Banking Review and Winter Fuel Payments

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0:30can open and edit. Claude can now draft a dock or deck right in front of you and Claude Design now lives right inside Claude. Describe the website or prototype you're picturing, attach your design system and it comes back in your own design language ready to edit right on the canvas. It works with your files and the tools you already use like Gmail and Slack and whether you're debugging code at midnight, building a financial model or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai.solve.

1:06That's claude.ai.solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. Claude.ai.solve. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. capitalize on around-the-clock access to highly liquid global futures and options markets across all major asset classes visit your online broker and get started see what adding futures can do for you at cmegroup.com forward slash podcast derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made this is not a recommendation or offer to buy sell or attain any specific investment or service.

1:49Richard Lloyd: Hello, welcome to this Moneybox podcast. The boss of the National Audit Office explains what went wrong when HMRC stopped child benefit for thousands of parents who just went on holiday. Happy birthday if you were born this day in 1960. You'll be the last of the 66-year-olds to get the winter fuel payment in December. And VAT is cut on children's summer days out, but how much will it really save? But first, more than 15 ,000 people have responded to a government review into access to banking services in just three weeks since it opened. We reported back then that the government had appointed Richard Lloyd, a former director at the consumer group Wich, to lead the review, following a decade which has seen almost 7 ,000 bank branches close, with hundreds more going this year, some in the past few days.

2:39Richard Lloyd: In his first interview since being appointed to the role, Richard will be live on Moneybox shortly. But first, let's hear from three of the dozens and dozens of listeners who've contacted us just this week, telling us why they value face-to-face banking. The banks are all saying we're closing the branches because people are going online. People are going online because you're closing the branches. Simple. And I'm not very happy having to travel an hour to get to a bank. It's just not fair on people my age to make them travel for hours on buses Especially in the winter when the weather is not so good I am angry Supporting my brother-in-law who is in his mid-80s and doesn't do online banking In fact he's quite afraid of the internet having been scammed We visited a branch hub in a leisure centre only to find that they couldn't process checks.

3:41Instead, we referred to the post office and there we had to complete a separate paying in form and submit it via their system. Well, I go into the branches to try and get some help with problems, questions and changes, and you're being pushed to either go online or phone a call centre. And that's not what I want. I want a branch. I don't want to have to fight my way through the bank's computer systems or call centres or end up talking to a robot and going round in a loop. I want to be able to talk to a person face to face and I'm getting a little bit fed up with the banks closing things down.

4:14Richard Lloyd: With me in the London studio is Richard Lloyd, the man in charge of this review into the future of customers' access to banking. Richard Lloyd, we just heard David in Dorset, Margaret in a village near Glasgow, Ian in Nottingham. This seems as a truly nationwide problem of people feeling excluded. Well, that fear of using digital services is clearly a big driver of this problem. There is a real worry, a frustration, a concern about people in particular, vulnerable people getting access to the services they need. And that's why we're looking very hard across the UK, gathering the best possible evidence.

4:53And by the way, thanks to all the Moneybox listeners who've already been in touch. Apologies if you don't hear straight back from me or hear back from me, because so many people, 16 ,111 as of this morning, Paul, have responded. So we're gathering the best possible evidence, the best possible data. We're looking at where services are or are not now, who most needs face-to-face banking services. and thinking very hard and very fast about what needs to be done.

5:19Richard Lloyd: And you've also been visiting places, I believe, across the UK and seeing what's going on on the ground. So we've heard a lot from people around the country. I'm visiting different parts of the country. I'm talking to consumer groups, to community groups, obviously to the banking industry. Getting to understand, getting underneath what it is that's going wrong, who's being left behind and what harm is being done. because, of course, the debate up to now has all been about access to cash and there are rules in place about access to cash. But this is a different question about access to face-to-face banking services.

5:53Richard Lloyd: And it's also small businesses, isn't it? Because they find it very difficult, if there's no branch, to pay their day's money into. It is, and I've heard from a lot of small businesses and their representatives about their part in this and what they need, which might be slightly different. But what I'm getting is a much clearer picture, and we will publish in the autumn the evidence that we found, our analysis of it, and then what I think needs to be done. Do you have any view now about what might need to be done? Well, you're giving me that look, Paul, that says, come on, tell me what you think before you've got the evidence in, and I'm not going to, I'm afraid.

6:30We've got the evidence gathering going on until the 20th of July. As I've said, there's a lot coming in. What I think is clear is that there is a very, very big concern around the country about this problem. There are things happening, though, that are being done about it, including hubs, including access to services elsewhere, changes in the banking industry that are emerging now. So let's see what's going on at the time.

6:58Richard Lloyd: You mentioned hubs, banking hubs. This is where banks share one shop front to deliver services in a town. And David, of course, just telling us that he had a problem with his not doing what he wanted. The government plans for 350, I think, by 2029. Can they really replace 7 ,000 closed branches? Well, I think it depends what they offer. And that's part of the conversation I'm having with the industry at the moment. Clearly, I've heard frustrations about the limitations of what the banking hubs can do and what the post office can do and other services as well. So we're going to look at that in the round.

7:30It may be that if we think about this as a banking infrastructure problem across the whole country, that more hubs doing more services for more banks and more people is a part of the answer. But we'll look at that very hard.

7:43Richard Lloyd: Now, the high street banks make billions of pounds in profits. It's around two billion for each of the big four in just the first three months of this year in profits. They close a branch because they say it's not commercially viable. Surely don't they have a social responsibility to keep some of them open? I mean, they could be seen as loss leaders for them, really, couldn't they? OK, they make a loss, but they make the brand recognisable. Well, I think the banking industry, the conversations I've had with them so far and the evidence I'm getting from them tells me that they get this problem, this impact on their reputation, actually, that they are withdrawing at a very rapid pace, faster than probably people can cope with in some communities.

8:25So we need to see what their response to this is. Obviously, if they do keep branches open, ultimately banking services are paid for all of us as consumers in the end. But I think from what David, Margaret and Ian were saying earlier, there's this sense of unfairness. There is evidence of harm that we'll look at. And if needs be, we will look at what the role of the government or regulators, in addition to what they're already doing, should be.

8:53Richard Lloyd: And briefly, I mean, you say what the role of the government should be, but it's warned the banks, hasn't it? it's passing a new law that if you have some radical idea, you can force the banks to keep branches open. Well, there is a bill in Parliament at the moment, it's in the House of Lords right now with clause three that says the government will bring in legislation if I recommend that that is what's needed. You're not going to tell me if you're going to recommend that. You're going to try again, but I'm not going to tell you that yet. What I will do is report in September in time for when the bill is in the House of Commons in October.

9:26I'm sure we'll chat then, Paul.

9:27Richard Lloyd: OK, thanks very much. And you have just three weeks until the 20th of July to respond by post or online details on the gov.u website and add to those 16 ,111 responses that Richard is reading every night, I'm sure. Richard Lloyd again, thank you very much. HM Revenue and Customs must learn lessons after wrongly stopping child benefit payments for thousands of families, many of whom had simply got on holiday. A National Audit Office report this week criticised HMRC after it expanded a scheme which was meant to cut down on benefit fraud, but in a way that led to major errors with parents losing child benefit they were entitled to.

10:09Richard Lloyd: Sarah Rogers is here to explain more. Sarah, remind us what happened. Well, Paul, it was back in November when Moneybox got involved on behalf of listeners who'd contacted us saying that their child benefit had been stopped and they didn't know why. So, of course, we went and found out. What was happening was a scheme from HMRC to cut down on benefit fraud had started using travel data from the Home Office to check families weren't moving abroad whilst continuing to claim, of course, you need to be a resident in the UK to qualify for child benefit. So that began as a pilot in 2024 before being rolled out nationally.

10:44And that is when the problem started. Mistakes meant legitimate families like Eve, who'd just gone away on a five day break, had her child benefits stopped. It's only£22 a week, but that money is quite important to me. I'm a single mum. I work full time and my son's 13. He's very expensive. and so at the time I was actually not in work I was on sick pay which was limited and I was relying on that money to help with household bills and they'd sent me a list of demands that was completely unreasonable they gave me a month to provide three months of bank statements for all the bank accounts I hold a letter from the school which is almost impossible to get hold of doctors records, vaccination records, to the point that I wasn't going to bother doing anything about it.

11:34And I found it easier to write to Moneybox than I did to try and meet their demands. Well, we're glad that you did, because it turns out around 8000 people, just like Eve, had their child benefit wrongly cancelled. So what went wrong, Sarah?

11:48Richard Lloyd: There was a pilot scheme which worked. Why didn't it work when it was rolled out nationally? Well, it's important to say the idea itself had merit. So the National Audit Office told us that of the£13 billion paid out in child benefit every year, some£300 million is thought to be lost to fraud and error. But when this pilot was expanded, HMRC made a number of changes. It had fewer staff with the right expertise and it removed some of the vital checks, like cross-checking PAYE records to see if people were actually still earning in the UK. And what's been the response of HMRC to this report? Well, it told us it welcomes it and recognises how data can help tackle child benefit, error and fraud.

12:28It's also acknowledged that some of the mistakes that were made initially and has taken action to put things right.

12:35Richard Lloyd: Thanks, Sarah, very much. Well, I'm joined now by Gareth Davis, the Comptroller and Auditor General of the National Audit Office. Gareth Davis, how did HMRC get this so badly wrong, stopping the child benefit of more than 8 ,000 parents? some simply because they went abroad on holiday. Yes, hello. I mean, the key point is that this is a data matching exercise. So it's taking two unrelated bits of data, so child benefit claimants on the one hand and travel data on the other, and matching them to check whether any claimants are actually abroad and therefore ineligible. And it's important to understand what this travel data is.

13:16when you'll be familiar with booking a flight, taking a ferry, crossing the channel on the tunnel, you have to provide your passport information up front. It's called advanced passenger information. And it's that data that was used as this check. And of course, you can immediately see that's not perfect information for this purpose, because some people book a flight and then at the last minute, because they're ill, they can't take the flight. But that data still shows on that system. And there was a particular problem in Northern Ireland because quite common for people in Northern Ireland to fly out of Belfast but fly back to Dublin and return to Northern Ireland over the land border.

13:55In that case, the API data, the travel data, shows that you've left the country but not that you've returned. So you can see why there were automatically some problems with that approach.

14:06Richard Lloyd: Yes, I can see that. But one of the key things is to check, isn't it? And one of the checks, which HMRC can easily do because it's its data, is whether you're employed and you're paying through PAYE in the UK. And it could have matched that as well and stopped a lot of these people anyway having their benefit wrongly stopped. Yes, and it did do that in the pilot. And so the error here was removing that cheque from the early stage, to, in other words, take people out of this exercise, but only applying it after the benefit had been suspended. So why did it, sorry to interrupt you, but why did it do that?

14:45Richard Lloyd: Was it just to save money, to make it quicker? Well, the answer they gave my team was that they didn't have sufficient skilled people who could use the PAYE data, which is not as straightforward as you might think, to apply that accurately to these cases. That's their explanation. They just didn't have the sufficient skilled staff to do it at the volume required for the rollout. There were enough of them to do the pilot, but not the full rollout. So there's an issue here about making sure you don't plan to do something that you're not equipped to do safely. Yes, I'm sure. Manage the risk to claimants.

15:15Richard Lloyd: I'm sure people are saying to themselves, well, I don't just employ enough skilled people to do it. Now, 8 ,000 people in your report, you say, were identified wrongly had their child benefit stopped. Are they giving compensation for these errors? Well, the benefit's been reinstated. So that's the first thing. and then HMRC is using its standard redress process for considering claims for compensation. So if somebody can show that not only did they not get the benefit, because that's obviously been now repaid, but it caused them other financial losses, there is a scheme to claim that. The amounts involved, though, that have been paid are very small, just thousands of pounds, but HMRC says it deals with all the claims it receives in line with its policies.

15:56Richard Lloyd: Right, but shouldn't they all get compensation? I mean, if it had happened to me, I'd be very cross and I would certainly want something back from the government. If you make a mistake with HMRC yourself, you certainly get penalised. The challenge with this kind of exercise, a really important point that I want to make is that I think it's good that HMRC is considering how to use the available data to crack down on fraud. All us are taxpayers and we want our money to be used properly and not paid to ineligible people. So it's really important that the problems with this, and of course they need to be addressed and are being addressed.

16:31It's really important they don't deter government departments who pay out lots of benefits and not just HMRC, of course, other departments do as well. It doesn't deter them from innovating, using new techniques to make sure that only eligible people are getting the data. That's why it's so important when you do do it, you're very careful about how you execute that plan.

16:52Richard Lloyd: Sure, that's the lesson from this, I presume. So Gareth Davies from the National Audit Office. Sometimes we all need an extra help in hand especially with a tricky business problem you've been putting off Claude is an AI for just that It's the collaborator that understands your entire workflow and thinks with you, not for you And Claude isn't just for quick questions Handed a whole task like turning a folder or scattered notes into a report and it does the work and hands back something finished that you can open and edit Claude can now draft a dock or deck right in front of you and Claude Design now lives right inside Claude.

17:29Describe the website or prototype you're picturing, attach your design system and it comes back in your own design language ready to edit right on the canvas. It works with your files and the tools you already use like Gmail and Slack and whether you're debugging code at midnight, building a financial model or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai slash solve. That's claude.ai slash solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode.

18:05Claude.ai slash solve. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. Capitalize on around-the-clock access to highly liquid global futures and options markets across all major asset classes. Visit your online broker and get started. See what adding futures can do for you at cmegroup.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell or attain any specific investment or service.

18:40Richard Lloyd: This thank you. Now, you may have noticed it's been a bit hot this week. A rare red warning for extreme heat comes into force. It is absolutely awful. I'm exhausted. I just want to go home. It's wonderful. No, you can't get enough of it. Hundreds of schools are closing. Rail passengers are being told only to travel if it's absolutely essential. It's officially the hottest June day ever recorded in Britain, beating a record held since 1976. If you keep on telling yourself over and over again how hot it is and how terrible it is, you get hotter and hotter and hotter. Well, today may not be the hottest June day since, well, at least last Thursday.

19:21Richard Lloyd: But how about cooling down a bit and talking about winter? Because people whose 66th birthday is today are the last group born in 1960 who'll get the winter fuel payment in December, despite many being 66 for most of the winter. The qualifying date is in the autumn, but the rising state pension age means that only people born on this day in 1960 or earlier reach state pension age in time to qualify. This winter, there'll be more than ever who reach 66, but are too young for the money that they need to take the chill off those winter bills. Our reporter, Joe Krasner, took a stroll by the River Mersey to speak to people about it.

20:01As I'm sweltering on the hottest day of the year, it does seem ironic that I'm going to be talking about the winter fuel payment. So what better place to cool down than by the River Mersey? So are you born before this particular date? Yes, I was born before that date, yes. And are you in receipt of this payment? I don't really know whether I do get it or not. Do I have to go online or do I have to get in touch with an agency? It is difficult for me to really understand. Do you get the winter fuel payment? Yes, I do. It's pointless because I've got to pay it back. Because I earn over£35 ,000, they put the money in your bank but then they take it back out on your tax code.

20:43So how do you feel about the fact that it's clawed back? It's fair enough really, I earn enough money, I don't need it. I am 69 so I fall within those parameters and my income is such that I am eligible for the winter fuel payment and I have to say I look forward to it, it's great because it does go a long way to helping out with the bills. I am receiving of receipt of the winter fuel payment along with my state pension. In fact you know in the balance of the tax regime I think I would be happy not to have it. So have you considered opting out so not to receive it? Is that an option? It is. I didn't know that, so I'd need to look at the government website to know what the steps were, but in principle I think I probably would just sacrifice that, yeah.

21:29Richard Lloyd: Well, listening to that is Sarah Weston. She's a technical officer at the Low Incomes Tax Reform Group, which is there to provide free education and support about tax. And Sarah Weston, that man there saying he doesn't, how does he apply? But that's not how it works, is it? It should be automatic. If you were born today in 1960, you're eligible. Hello, Paul. Thank you for having me on the show. Yes, you're right. There is no need to apply for the winter fuel payment now, the winter heating payment. It's made automatically to anybody who's eligible. In limited circumstances, you may need to claim if you've deferred your state pension, but the vast majority of people will just receive it automatically.

22:08Richard Lloyd: And we should warn people, of course, that if they get a text about claiming that's from a thief, it's not from the government. Absolutely. So the way you'll be notified is that you'll get a letter in the early autumn and that will confirm the amount that you're entitled to. And also it will tell you how you will receive it. Usually it's into the same bank account that you receive your state pension or any other state benefits into. You certainly shouldn't be notified by text or email from HMOC or any other body. So if you receive anything from someone purporting to be from one of those sources, then please don't interact with them because they're almost certainly scammers.

22:46Richard Lloyd: So everyone that age gets it. As we heard, some have to pay it back then, don't they, if their income is more than£35 ,000. And indeed, those people are already paying back last winter's payment, which they've had. How is that money taken back by HMRC? That's right, Paul. So if your taxable income in the year you receive the winter payment is over£35 ,000, then you will have to pay it back and it's taken back in the form of a tax charge. So HMRC will collect that through the tax system. If you file a tax return, it will be collected that way through the self-assessment system. and if you pay tax through PAYE, which will be the case for a lot of pensioners, usually because they've got some pension income from a personal or workplace pension, that tax, sorry, the winter payment will be collected through an adjustment to the tax code.

23:36Richard Lloyd: You'll have more tax taken off your earnings or your other pension. And just tell us about Scotland because there's a similar payment but called something different and slightly different amount of money. Absolutely. So in Scotland, it's called the Pension Age winter heating payment. So it's a devolved matter. And the Scottish government has set the payments slightly higher. So in the UK, they range, sorry, in England, Wales and Northern Ireland, they range from£100 to£300 per person, depending on age and personal circumstances. In Scotland, those figures are£105.55 and£316.70. And any claims to opt in and out are dealt with through the Social Security Scotland body rather than through the DWP.

24:16Richard Lloyd: Yes, you can opt out in both of them. And just finally and briefly, Sarah, the lady from Liverpool said it was important to her, this money. Is this payment still vital for pensioners? I think there's no denying that for many, this payment is going to be a very helpful amount to help them meet their living costs and live comfortably. Obviously, it arrives in the winter just as the heating costs are spiking. We know that particularly for people on lower fixed incomes, this is particularly helpful. there may be some people who are receiving it who don't need it and haven't opted out for whatever reason they will have it taken back and even if you haven't opted out you can pay it back voluntarily sorry, you can opt out voluntarily to pay it back even if your income isn't over£35 ,000 Right, Sarah Weston from the Low Income Tax Reform Group, thanks And now Well,

25:10Richard Lloyd: if you're planning a rollercoaster ride this summer you may be hoping the scariest thing at the theme park won't be the bill. And it might not, because this week the Chancellor has cut the VAT charged on attractions which children visit from theme parks to restaurants. It's a small change. It should be a 12.5 % price cut. Sarah Rogers is still here. Sarah, what's happening? Well, from this week, VAT on family attractions, children's cinema and theatre tickets and kids' meals dropped from 20 % to 5%, and that's until the 1st of September as part of the government's Great British Summer Savings Scheme.

25:45Under-15s will also get free bus travel in England during August. The aim, of course, to make family days out cheaper. I looked at one major theme park advertising advance tickets from£29.75. That was down from£34, although prices do vary by date. However, businesses aren't legally required to pass the VAT savings on, so it's definitely worth checking before you book.

26:07Richard Lloyd: And this comes at a time, of course, when household bills are rising. including energy on the 1st of July. Will a small cut really make things affordable? Theme parks eating out? It can be a lot of money, can't it? Yeah, useful perhaps, but not exactly transformative. So for many families, the bigger challenge this summer will still be childcare. Children's charity Coram found that six weeks of full-time holiday clubs cost more than£1 ,000 on average last year. And from Wednesday, the regulator Offgem's energy price cap rises by 13%. that adds£18 more on a typical bill. So while cheaper roller coasters may be welcome, parents might find the financial ups and downs aren't quite over yet, Paul.

26:48Richard Lloyd: Thanks, Sarah. So do check before you go and remember it's often cheaper to book online and you can let us know if the Great British Summer Saving Scheme actually saves you any money this summer. In fact, emails are coming in about banks. Banks are your big concern. It's appalling. Banks have been allowed to close, says one listener here, Caroline. Thank you all for those. and the next programme to drop on your Moneybox subscription is the prize-winning Moneybox Live, which is back on Wednesday. It was voted Broadcast Programme of the Year at Tuesday's Headline Money Personal Finance Awards and next, Felicity Hanna is looking at the problems of selling flats.

27:23Richard Lloyd: They're seen as a cheap way to buy a first home but hard to sell when you want to move on, not least because of the service charges. You can email moneybox.pbc.co.uk about that or summer savings or any money topic and send a voice note or message to us on WhatsApp 0306 783 183. In this podcast, the reporters were Sarah Rogers and Joe Krasner, researcher Catherine Lunn, studio manager Ben Houghton. 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 are you here for? So, Alice Loxton, I'm here for the history. Well, Ben Henderson, I like the formality.

28:07And that's perfect because we have a lot of history to share. Why did tea become such a British obsession? How did English turn into the language we speak today? And yes, why do women's clothes still not have pockets? Well, in our new podcast, Here for the History, we're investigating how stories from the past shape everyday life today. Basically, the things we've all noticed but never stopped to question. Listen on BBC Sounds. Or watch on YouTube. Just search for Here for the History.

29:04and edit. Claude can now draft a dock or deck right in front of you, and Claude Design now lives right inside Claude. Describe the website or prototype you're picturing, attach your design system, and it comes back in your own design language, ready to edit right on the canvas. It works with your files and the tools you already use, like Gmail and Slack. And whether you're debugging code at midnight, building a financial model, or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai slash solve.

29:39That's claude.ai slash solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. Claude.ai slash solve.