Credit Action News Round-up (4 October 2011)

Council tax freeze to continue next year: Chancellor George Osborne has revealed plans to extend the freeze on council tax into the next tax year (2012/13). This comes as part of his bid to help pensioners and families with the cost of living. The freeze in 2013 will cost the Government £800m and will be paid using unspent cash from Whitehall departments. Whilst the Government cannot force councils to freeze bills, it is offering to make up the money needed to cover costs to those councils that limit spending rises to 2.5%. This follows last year’s freeze, the first year that no town hall raised council tax since its introduction in 1993.

150,000 workers in the social care sector paid below minimum wage: According to research by Kings College London, at least 150,000 social care workers may be getting paid less than the minimum wage. Office for National Statistics (ONS) figures suggest that only 27,000 social care workers currently work for less than the national minimum wage level. However King’s College’s research, which studied figures from one of the largest data sets on social care pay, indicates that around 9% care workers in England are paid below the level of the minimum wage. If extrapolated across the UK this amounts to between 150,000 and 200,000 workers.

Energy providers ignore rules on eradicating switching penalties: Despite rules issued by the energy regulator Ofgem that should allow customers to switch tariffs from a variable-rate deal following a supplier’s price rise without penalty, energy firms are continuing to wrongly charge their customers. Chris Huhne, the Energy Secretary has called for a fairer playing field for gas and electricity and Ofgem wrote to suppliers in August to remind them of the new obligation. Yet customers are still being given confusing and conflicting information, and are being charged up to £100 to switch their contracts. The rules for switching without penalty do not apply to those on fixed-price contracts but all other customers (including those on fixed-term but variable-price contracts) should be able to exit their contract without fees. "We would advise consumers on fixed-term deals to shop around when prices change and switch within the 30-day period to make sure they don't pay more than they need to," said Hannah Mummery, an energy expert at Consumer Focus.

Inflation switch could leave teachers £7,000 worse off: Change in the way inflation is applied to public sector pensions will mean that the average retiring teacher will face £7,500 of losses over a decade, according to the financial group Wesleyan for Teachers. The changes apply to how pensios are calculated: they will move in line with the Consumer Price Index (CPI) rather than the Retail Price Index (RPI). The changes will also hit about 12 million people in the public sector and about four million in the private sector. The state pension will also be uprated by CPI in future, which will affect everyone. Ros Altmann, of Saga, said: "People do not understand how significant this is. They may find that the value of their pension, and their quality of life, slides during retirement."

Amount of energy consumed increases due to love of technology: The Energy Saving Trust has warned of the effects of our desire for gadgets and appliances, such as smartphones, TVs, laptops and electric toothbrushes.  If we continue using them as we are, we are likely to fall short of 2020 targets to cut domestic electricity emissions by 34%, says the independent organisation that advises on saving energy and lowering carbon emissions. According to the report, the number of domestic gadgets and appliances in the average UK household increased by three and a half times over the ten years to 2009. Despite visible efforts to switch to energy-efficient products, UK households are consuming more energy than five years ago; nearly a third of all UK carbon emissions currently come from the home. Dr Paula Owen, who authored the report from the Energy Saving Trust said: “we are obsessed with gadgets and in these austere times people need to think about what they buy, if they need it and how they use it."

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