Up to 100,000 to be released from Fuel Poverty

A deal brokered by Energy Secretary John Hutton MP will result in an extra £225m being given in social assistance schemes, to those in the most vulnerable households, to help make ends meet in an environment of rising fuel bills.

This deal has the potential to release up to 100,000 people from fuel poverty. Over 4.5 million people currently live in fuel poverty; a situation defined as spending over 10% of income on fuel bills for the home. This is a small, but nonetheless important, contribution to helping those in fuel poverty.

The deal means that the UK’s big six energy companies have now pledged to increase spending on social assistance programmes as follows:

Read on for a summary of the top UK personal finance news stories for the week beginning 7th April 2008.

Monday 7th April

New ISA year has begun – The tax year ended on the 5th April and hence now is the time to make the most of the new ISA ( Individual Savings Account) season. As well as receiving a new ISA allowance, there is even more positive news: the ISA cash allowance for this tax year has increased from £3,000 to £3,600.

The interest received on an ISA is tax-free. If you have paid off all your debts and have capital available an ISA is a fantastic place to put your money – but make sure that you search around for the best deal on the market! It is also important to consider whether you are likely to want to use the money at some point over the course of the year or not because many of the fixed deals will impose financial penalties on you if you choose to withdraw your money early.

As April is the month that many choose to put money into ISAs, and hence firms often compete more aggressively to gain your business, some of the best deals are available at this time of year. However, many of quickly withdrawn from the market so it may be wise to start to look for the best paying ISA deal ASAP.

Thursday 10th April

Self-assessment tax form relief – If you are one of the 9.3 million self-assessment taxpayers, you will be happy to hear that HM Revenue and Customs (HMRC) have said that they have produced a new form that “has fewer questions, simpler language and an improved layout.”

If you are going to fill in a paper form, the deadline for completion is the 31st October 2008. If you plan to pay online, the deadline is the 31st January 2009.

Friday 11th April

Mortgage lending could half in 2008 – The Council of Mortgage Lenders (CML) this week said that mortgage lending could fall to half its current level if the Bank of England doesn’t make more money available to lenders.

Whatever the Bank of England decides to do, the situation is such that while mortgages continue to disappear from the market it is by no means impossible still to take out a mortgage for many. If you are thinking of doing this, ask yourself the question: how much can I afford to borrow? Then go and work it out with the help of Moneybasics.

Prepared for Moneybasics by Jason Taylor, Advocacy Officer (Credit Action).