Bank of England

THE chancellor could raise tens of billions from tax reforms that don’t hit “working people”, leading economists have said.

Rachel Reeves is under pressure to fill an estimated £50billion black hole in the public finances ahead of November’s autumn statement. 

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Westminster is awash with rumours that Labour could extend the freeze on income tax thresholds.

However, critics say this would mean breaking Labour’s manifesto pledge not to increase taxes on “working people”.

But in a new report, the Institute for Fiscal Studies (IFS) urged the Chancellor to resist “half-baked” solutions like “simply hiking rates”. 

The IFS Green Budget Chapter report instead urges the chancellor to reform the “unfair” and “inefficient” tax system.

End capital gains tax relief on death

Reeves could scrap capital gains tax relief on death, the report said.

When you sell certain assets – like houses, land or other valuable items – you have to pay a tax on the profit you made on it.

However, there are some important exceptions.

For example, if someone dies and you inherit their asset, you don’t have to pay capital gains tax they would have paid.

But the IFS said Reeves should consider scrapping the relief, raising £2.3billion in 2029-30.

However, families could oppose the measure given Labour is already skimming more revenue off inherited wealth.

The inheritance tax threshold has been frozen at £325,000 since 2009.

And last year, Reeves announced she would extend the freeze until 2030.

Hit taxpayers with a ‘one-off’ wealth tax

Economists and politicians are often divided over whether a wealth tax would work.

Supporters argue that the UK’s richest 1% are wealthier than the bottom 70% – and that a wealth tax would reduce this inequality.

But critics say it would be an administrative nightmare and lead millionaires to leave the country, taking their businesses and tax revenues with them.

But if Labour does reach for wealth in the budget – it should opt for a “one-off” wealth tax, the IFS said.

The think tank argues this is a better option than a recurring wealth tax.

It would work by the government calculating how much people’s total assets are worth and taxing them over a certain threshold.

“An unexpected and credibly one-off assessment of existing wealth could in principle be an economically efficient way to raise revenue,” the IFS wrote.

However, a wealth tax that happened on a regular basis would have “serious drawbacks,” the think tank warned.

Valuing everyone’s wealth every year would be “extremely difficult,” it said.

Moreover, a regular tax could deter the highest tax payers from residing in the UK long-term, potentially hitting overall tax revenues.

But the IFS said that even a “one-off” levy could spell trouble if people don’t trust the government not to come back for more.

The report said: “The potential efficiency of such a tax could be
undermined, however, if announcing a one-off tax created expectations of, or uncertainty about, other future taxes.”

Double the council tax rates paid by highest value homes

A new council tax surcharge could raise up to £4.4billion.

Council tax is a local tax on residential properties in the UK, with homes assigned to Bands A to H based on their value.

Bands G and H generally include the highest value homes.

The IFS said doubling the council tax paid by these households could mean a £4.4billion boost.

However, critics already say the council tax system is “unfair and arbitrary”.

As reported by The Sun, families living in modest homes sometimes pay more than those in multi-million-pound mansions.

The root of the problem is simple – council tax bills are not based on what your home is worth today.

Instead, it’s based on its value way back in 1991, when homes were categorised into bands ranging from A to H. 

Decades of uneven house price growth mean this once-simple system is now riddled with inequalities.

Moreover, councils set their own tax rates – leading to a “postcode lottery”.

The average Band D council tax in England is £2,280, but councils set their own rates.

For example, in Wandsworth, people pay just £990, while in Nottingham, they pay £2,656.

This means that millions of homeowners pay much less compared to their property’s value than those in poorer areas, according to PropertyData.

Another potential problem is that the extra cash would go to local authorities rather than central government.

Local authorities use council tax to pay for local services like schools, bin collections and libraries.

So to make sure it reaps the benefits of the change, Downing Street could reduce the grants being paid to councils, the IFS said.

The UK government gives councils more than £69billion in funding – a 6.8% increase in cash terms compared to 2024-25.

But councils would likely still fight back against any funding downgrade – with sticky 3.8% inflation already eating into their grants.

Rejig inheritance tax

The IFS admits that changes to inheritance tax could ‘provoke’ strong reactions.

But its report said that the £9billion said annually is ‘modest’ – although high by historical standards.

Reforming death duties to abolish the additional £175,000 tax-free allowance could raise around £6billion, the economists wrote.

“One obvious option would be to increase the rate of inheritance tax from its current 40%,” the economists wrote.

They said an increase of just 1% would raise £0.3billion in 2029–30.

The government could also reduce the threshold at which the tax begins to be paid.

Currently, people can pass on up to £325,000 of wealth tax-free.

Then there’s an additional £175,000 tax-free allowance that can be used only when passing on a primary residence to a direct descendant.

Abolishing the second of these allowances, for example, could raise around £6billion in 2029–30, the IFS said.

Crack down on businesses underpaying their taxes

The think tank has urged Labour to tackle tax non-compliance.

Corporation tax, a tax on company profits, has become increasingly important to the Treasury’s coffers in recent years.

Over the course of the 2010s, revenue averaged 2.4% of national income, rising to 3.3% in 2025–26.

But corporation tax dodging meant 15.8% of liabilities went unpaid in 2023-24, up from just 8.8% in 2017-18.

Small businesses are mainly to blame, the IFS said, admitting that claiming the prize of missing corporation tax “would not be straightforward in practice”.

The think tank added: “More work is needed to understand why so many small companies are submitting incorrect tax returns.

“It is likely that tackling the gap would require targeted
compliance activities from HMRC, such as auditing small businesses.”

The IFS also said “more revenue could be raised from corporation tax”.

However, it did warn that, while a 1% increase would raise £4.1billion, there could be adverse consequences.

The authors wrote that investment in the UK could become “less attractive” and reduce future tax yields.

However, critics may argue that any tax hike hitting members of the public – even if targeting inheritance or council tax – will still feel like a broken promise.

What must the chancellor avoid doing?

The personal tax allowance has been frozen at £12,570 since April 2021.

Prime Minister Rishi Sunak announced the freeze would remain until April 2026 and Labour extended it until April 2028.

Extending the freeze on personal tax thresholds including national insurance contributions would raise around £10.4billion a year from 2029-30.

But IFS economists say Reeves must not do this – and instead lift the threshold amid rising inflation.

Extending the freeze would be a breach of Labour’s manifesto pledge not to increase taxes for “working people” which includes income tax, national insurance and VAT, the IFS said.

The report’s authors also said restricting income tax relief on pension contributions would raise large sums but should be avoided.

Currently, when you put money into a pension, the income tax you’ve already paid on that money is essentially returned via a government top-up.

The IFS said restricting relief would be “unfair” to penalise pensions again when pension income is already taxed.

The Chancellor should also resist the temptation to up stamp duties, the IFS said.

The think tank fears it would cause people to avoid selling their homes when they want to – hitting the jobs market and holding back growth.

“Changing rates and thresholds is all very well, but unless the Chancellor is willing to pursue genuine reform it will be taxpayers that shoulder the cost of her neglect,” the report, which forms a chapter in the IFS’s wider budget assessment for 2025, said.

Isaac Delestre, a senior research economist at the think tank and an author of the chapter, said Ms Reeves would have “fallen short” if she reaches for quick revenue without wider reform.

“Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the Chancellor could limit the economic damage,” he said.

THE Co-op has warned that up to 60,000 small shops across the UK could face closure without upcoming business rates reform for small shops.

In the 2024 Autumn Budget, Chancellor Rachel Reeves promised to provide permanent business rates relief for small retail properties.

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At the time, the Government proposed raising business rates on the biggest retail properties with values over £500,000.

This would allow for a discount on rates for small retail and hospitality premises to be permanent.

The government has not yet set the rates, but changes are due to take effect in April 2026.

But the Co-op is now urging the Government to commit to the maximum levels of relief for smaller stores in the upcoming Autumn Budget on November 24.

Research conducted by the supermarket found one in eight small high street business owners will be at risk of shutting down if reforms are not delivered.

A further 10% of small said they would need to lay off staff.

Shirine Khoury-Haq, Co-op group chief executive, said: “The proposed system would improve the financial situation of 99% of retailers.

“How much they are protected from tax rises depends on decisions made in this Budget. To boost local economies, create jobs and provide community cohesion, we need inclusive growth.”

“That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community.

” In order for them to not only survive, but to thrive, the government has to commit to the maximum levels of relief.” 

It comes as many larger retailers have voiced concerns over plans to increase business rates on larger stores, arguing the move could make them unprofitable or lead to price hikes.

In August, a letter signed by Morrisons, Aldi and JD Sports, warned that further tax rises on businesses could result in the Labour government breaking its manifesto pledge to provide “high living standards”.

It reads: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.”

Analysis carried out by the British Retail Consortium also suggested that 400 larger-format stores, such as department stores and supermarkets could close if the changes took place.

Many businesses have already seen their labour costs rise thanks to the rate of employer national insurance being increased in last year’s Budget.

The Treasury expects the new rates system will only impact the top 1% of properties.

A Treasury spokesperson said: “We are creating a fairer business rates system to protect the high street, support investment, and level the playing field by introducing permanently lower tax rates for retail, hospitality, and leisure properties from April that will be sustainably funded by a new, higher rate on less than 1% of the most valuable business properties.

“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, and we have set out our long-term plans to address ‘cliff edges’ in the system to support small businesses to expand.”

BRITAIN’S banks are giving away free cash payments of up to £200 each – and customers need to do one thing to be eligible to claim the money.

The extraordinary deals are being offered by major UK banks such as Lloyds and NatWest as part of the fight to boost customer numbers.

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Nationwide is also among the list of banking giants handing out the free cash payments for changing bank accounts.

The deals are part of switching incentives, and also come with extra perks like cashback and savings rates well above the average.

Nationwide Building Society

The first bank on the list is giving out a handsome sum of £175 to customers who complete a full switch through the Current Account Switch Service (CASS).

Those joining can pick from three accounts: FlexPlus, FlexFirect or FlexAccount.

The FlexDirect account offers 5 per cent AER interest on balances up to £1,500 for the first 12 months.

It also offers 1 per cent cashback on debit card spending with a maximum of £5 per month.

Combining this with the switching bonus, cashback and interest, smart savers could horde up to £400 in free payments in the first year of joining.

Nationwide’s Director of Group Retail Products Tom Riley said: “It’s never been more rewarding to be a Nationwide member and that’s why we want to help more people benefit by offering this switching offer.”

The building society consistently ranks top for customer service and has already attracted over a million new customers through CASS since 2013.

Lloyds Bank

For a £200 free cash payment, Lloyds Bank is giving away bonuses to customers who make a switch.

People who move their existing account to a Club Lloyds or Lloyds Premier account can get the free cash.

But the payment comes on condition they set up three or more direct debits.

Lloyds Bank is one of the UK’s largest financial services organisations and serves tens of millions of Brits.

NatWest

For account holders switching with NatWest, customers can get up to £175 on one condition.

Those choosing a Select or Reward account can get the free cash.

But they must pay in £1,250 first.

And customers also need to login to the mobile app within 60 days.

Other major banks

RBS, part of NatWest Group, is also offering £175 for switching to a Select or Reward account, as long as they pay £1,250 and login to the app in 60 days.

First Direct is offering £175 for switching to its popular 1st Account.

Customers must pay in £1,000 minimum, set up two direct debits or standing orders, and make five debit card payments within 45 days.

The Co-operative Bank’s switch deal stands at £100, with customers able to make another £75.

Customers need to meet the same requirements as First Direct switchers over the next three months.

What energy bill help is available?

There’s a number of different ways to get help paying your energy bills if you’re struggling to get by.

If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.

This involves paying off what you owe in instalments over a set period.

If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.

Several energy firms have schemes available to customers struggling to cover their bills.

But eligibility criteria vary depending on the supplier and the amount you can get depends on your financial circumstances.

For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.

British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.

You don’t need to be a British Gas customer to apply for the second fund.

EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.

Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).

The service helps support vulnerable households, such as those who are elderly or ill.

Some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.

Get in touch with your energy firm to see if you can apply.

Financial expert Kate Steere said Nationwide’s package may be the best in value over 12 months, factoring in interest and cashback.

She said: “If you max out the savings and cashback alongside the switching bonus, you could be looking at nearly £400 in your first year.”

Lloyds is offering the highest single payout though, standing at £200 upfront.

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THE Chancellor has been dealt another setback after borrowing hit the highest level in five years, making Budget tax rises “inevitable”.

The Government borrowed more money than expected last month, at £18billion, according to the latest figures from the Office for National Statistics (ONS).

This was £3.5billion more than in August 2024.

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The interest on Government debt soared by £1.9billion to £8.4billion, which added to higher spending on benefits and public services.

This offset any boost from the National Insurance Contributions hike, the ONS said.

It marked the highest August borrowing since 2020, significantly overshooting the £12.8billion expected by economists.

The level of government borrowing was £5.5billion higher than the Office for Budget Responsibility forecast in March.

Meanwhile, borrowing for the first five months of the financial year hit £83.8billion.

This was £16.2billion higher than the same period last year and well ahead of the OBR’s £72.4billion prediction.

Martin Beck, chief economist at WPI Strategy, said: “The £10billion buffer the Chancellor pencilled in against her key fiscal rule in March has almost certainly gone.

“That means tax rises in November look inevitable.”

James Murray, Chief Secretary to the Treasury, insisted the Government “has a plan to bring down borrowing because taxpayer money should be spent on the country’s priorities, not on debt interest”.

He added: “Our focus is on economic stability, fiscal responsibility, ripping up needless red tape, tearing out waste from our public services, driving forward reforms and putting more money in working people’s pockets.”

Do you have a money problem that needs sorting? Get in touch by emailing [email protected].

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

Lost decades

WE are now in a new cost of living crisis — or perhaps we never really escaped the first one.

A dismal report yesterday revealed family incomes are £20,000 less than they should have been had economic growth in the UK not flatlined after 2005.

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It means Brit households have effectively lived through two lost economic decades.

Covid, the credit crunch, war in Europe and energy price shocks were hammer blows.

But inflation is now firmly entrenched in the economy thanks to Rachel Reeves’s policies, which have directly driven up prices.

Her National Insurance rise has left hard-pushed customers facing bigger bills at the tills, as shops were forced to pass on huge extra costs.

Unnecessary Net Zero measures only add to the misery.

The irony is that yesterday’s report on living standards was by the Left-leaning Resolution Foundation.

Many of its former members are now sitting in Downing Street as key advisers to the Prime Minister and Treasury.

Yet most of their ideas to fix the economy are based on seizing ordinary people’s hard-earned savings, property taxes and taxing the rich so highly they flee the country.

Big business is already warning of the folly of this outdated 1970s-style approach.

Don’t do it, Chancellor.

Action, not talk

NEW Home Secretary Shabana Mahmood says she will not allow migrants to avoid deportation through bogus last minute claims that they are the victims of modern slavery.

She insists these “vexatious” appeals make a mockery of our laws.

Of course, she is right that migrants are gaming a broken asylum system.

But for all her tough talk, how exactly does she plan to do it?

Successive Home Secretaries have promised to do “whatever it takes” to secure our borders.

All have foundered on the immovable rock that is European human rights laws.

Those same laws which are defended to the hilt by her cabinet colleague, Attorney General Lord Hermer.

We wish Ms Mahmood well. But it’s actions that count.

Hope & glory

FOR all the talk of trade deals and tariffs worth billions there is one British institution that remains priceless.

Our Royal Family — such a vital asset to this country — once again totally charmed the world’s most powerful man, Donald Trump.

Amid the doom and gloom it’s good to remember that no-one does pomp and pageantry quite like us Brits.

HOUSEHOLDS across the country are being warned to brace for a financial squeeze as the cost of government borrowing skyrockets to levels not seen since 1998.

This now directly threatens to push up mortgage rates and could usher in a new wave of tax hikes.

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The pound has tumbled in response to the growing unease, highlighting investor concern over the UK’s economic stability. 

At the heart of the issue are government bonds, known as “gilts,” which the government issues to borrow money.

These bonds offer investors a return, referred to as the “yield.”

In recent weeks, gilt yields have been rising rapidly, making it more expensive for the government to borrow.

This morning, yields soared further, with 30-year gilts reaching 5.72% – the highest level in nearly 30 years – while 10-year gilts climbed to 4.85%.

This spike signals that investors are nervous.

They are demanding a higher return to lend to the UK, worried about stubborn inflation and a gaping £51billion hole in the nation’s finances.

The rise in government borrowing costs is putting serious pressure on household budgets in two key ways

Firstly, it’s driving up mortgage rates.

The link between government gilt yields and mortgage rates is direct and unavoidable.

Lenders use “swap rates,” which closely track gilt yields, to set the prices of fixed-rate mortgage deals.

As these rates climb, fixed mortgages become more expensive.

Since August 1, two-year swaps have risen from 3.56% to 3.74%, while five-year swaps have gone from 3.63% to 3.83%.

Major lenders like Barclays have already started increasing rates, and even a small rise can add significantly to monthly payments on a typical £200,000 mortgage.

With swap rates continuing to rise in recent weeks, experts warn that mortgage rates are likely to increase further.

Separately, Chancellor Rachel Reeves faces a difficult challenge in her Autumn Budget, scheduled for November.

Higher borrowing costs are eating into public funds, and many economists believe tax increases will be necessary to fill the financial gap.

Although the government has promised not to raise income tax, national insurance, or VAT for “working people,” other tax measures are reportedly being considered.

One proposal is applying National Insurance to rental income, which critics fear could result in landlords passing on the cost to tenants through higher rents.

Another idea being debated is replacing stamp duty with an annual property tax, which could affect homeowners.

There are also rumours of reducing pension tax relief or cutting the tax-free lump sum, moves that could generate billions but might hurt savers.

Plus, there’s speculation about lowering the VAT threshold, which would bring more small businesses into the tax system.

This could increase their costs and potentially lead to higher prices for consumers.

Reeves is expected to make economic growth the centrepiece of her next Budget, warning that Britain’s economy is “stuck” and in need of bold solutions.

What can you do about it?

None of the proposed changes have been confirmed yet, and the government hasn’t ruled them out either.

However, any new measures won’t take effect until after the Budget in November.

It’s important not to make rash decisions based on speculation.

If changes are announced, you’ll have time to act and protect your finances before they come into effect.

For instance, if stamp duty is replaced by an annual property tax from a certain date, you could move house before the deadline to avoid the extra cost.

Similarly, if the government introduces capital gains tax on high-value properties, you might consider downsizing to a smaller home before the change is implemented.

 Rob Morgan, chief analyst at Charles Stanley, said: “Taking pre-emptive action can outright backfire.

“Last year some people were concerned about restrictions around taking tax free cash from pension and took withdrawals they wouldn’t have otherwise made.

“This removed the money from a tax-efficient environment and potentially stored up tax issues that will come back to haunt them.

“Instead, it’s best to wait to see what happens, consider the consequences, and take advice as required before acting.”

Most of the proposed measures are likely to affect only the very wealthy, so you may not be impacted at all.

If you’re concerned, there are steps you can take to prepare and safeguard your finances.

Check your financial health

If you are worried about your finances then you should speak to a financial adviser.

They will be able to offer you advice about your situation and explain if any of the measures will affect you.

You can find one using unbiased.co.uk – but remember, you will pay a fee.

It’s good practice to sit down and take stock of your finances every six months and work out a plan.

Work out all your bills and outgoings and what income you have and factor in any changes, such as bills going up or new income streams.

Think about what you need to do to make the most of your money. For example, do you need to prioritise paying off debts or saving for a house deposit.

Our guide to paying less tax legally could help you avoid giving away more cash to the tax man than necessary.

Review your mortgage deal

If your mortgage deal is coming to an end soon, act now.

Locking in a fixed rate could shield you from rising rates and market uncertainty.

Aaron Strutt, of mortgage broker Trinity Financial, said “For the moment there have not been significant price hikes but it’s probably worth locking in a mortgage rate if you are buying somewhere or due to remortgage, to try and keep away from any market turbulence.”

If you are coming to the end of a fixed deal, most lenders let you lock in a new rate up to six months beforehand, which can be worth doing.

If rates fall after you agree a new deal, some lenders will let you sign a new one at a lower rate.

Think when investing

Gold prices surged to a record high of $3,546.99 per ounce (£2,643.82) on Wednesday, marking its seventh consecutive daily rise.

Investors are flocking to the precious metal as a safe haven amid inflation fears and fiscal uncertainty.

However, financial advisers suggest maintaining a balanced and diverse investment portfolio as a better strategy for managing market volatility.

A small allocation to gold (5-10%) can be useful, but it shouldn’t be the core of your investment plan, according to Charles Stanley.

Don’t forget a will

If you’re concerned about potential changes to inheritance tax, it’s essential to have a will in place.

Without a will, your estate will be subject to intestacy rules, which could result in a higher inheritance tax bill.

This is especially important for unmarried couples, as they won’t automatically inherit from each other, even if they’ve lived together for years.

Check how to make one in our guide.

Make your savings work harder

More than 31million bank customers have £186billion in savings accounts earning just 1.5% interest, according to banking app Spring.

These accounts generate £2.3billion a year in interest, but savers could earn over three times more by switching to accounts offering up to 5% interest, The Sun can reveal.

The average bank customer has around £10,000 in savings, according to Raisin.

If that £10,000 is kept in an easy access account earning 1.5% interest, it would generate just £150 in interest each year.

But switching to Cahoot’s 5% easy access account would boost that to £500, earning you an extra £350.

If your savings account pays less than the current inflation rate of 3.8%, it’s time to look for a better deal.

IF you’re wondering where your money’s going each month, it might not be big bills or bad luck to blame but small, repeated mistakes that add up fast.

From letting your savings sit in low-interest accounts, to underestimating the real cost of long mortgage terms, financial experts warn that common habits could be quietly emptying your bank accounts.

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We asked money experts and behavioural scientists to reveal the biggest habits that are holding people back.

1. Not knowing what’s coming in and going out

It’s hard to feel in control of your money when you don’t know where it’s actually going.

Many people assume they have a rough idea, but the reality is that forgotten subscriptions, auto-renewing services and small daily purchases quickly add up.

Without visibility, your budget can slowly unravel, and by the time you realise, you’ve slipped into the red.

Vix Leyton, consumer expert at Thinkmoney, says the fix starts with routine: “Take time to know what your outgoings are and what is coming in.

“Some apps, like Thinkmoney, offer a snapshot of what you’re spending, and can even ringfence bill money for you so you don’t accidentally end up facing penalties and late fees.”

Even a five-minute weekly check-in can help avoid nasty surprises and highlight where cutbacks are needed.

2. Living without a savings buffer

It’s hard to save money – but not having a buffer can leave you exposed to high credit when you need cash quickly.

Whether it’s a broken boiler, a car that won’t start or a sudden cut in hours at work, not having a cushion means falling back on credit cards or payday loans just to stay afloat.

The result is a constant feeling of stress, and a budget that can be thrown off by the smallest shock.

Thomas Mathar, behavioural researcher and host of The Money:Mindshift Podcast, says a little slack goes a long way.

He said: “Even a modest buffer, like one month’s rent, can give you the breathing space to make better decisions and avoid high-cost debt.

“It’s not just about the numbers, it’s about having mental and financial slack when life throws you a curveball.”

3. Letting debt pile up month after month

More and more people have credit card debt, which means it can be easy to think it’s business as usual, especially when the minimum payments are low.

But ultimately, you’re paying interest to the bank instead of putting that money toward your own goals. Over time, that can add up to hundreds or even thousands of pounds in lost savings.

“Too many people accept credit card debt as a normal state of affairs. It’s not,” says Mathar.

“Paying down high-interest debt quickly is one of the most powerful things you can do for your long-term well being. It’s buying yourself back freedom, and peace of mind.”

If you’re juggling multiple debts, focus on the most expensive ones first and look into 0% balance transfer options if your credit score allows.

4. Having psychological armour to support you

In the age of side hustles and flashy online success stories, it’s tempting to ditch steady work for riskier pursuits.

But without a reliable income it’s hard to build long-term security.

Inconsistent earnings often mean falling behind on bills, using credit to bridge the gap, and struggling to plan ahead.

Mathar warns that it’s important to have some sort of regular income, even if you’re pursuing other hustles on the side.

He says: “A steady income isn’t just about covering bills, it’s psychological armour.

“When you’re living month-to-month or under-earning compared to your potential, the stress compounds.

“You don’t need to chase big money, but you do need income that’s ‘good enough’ to support a resilient, happy life.”

5. Leaving savings in a dead-end account

You might feel good about putting money aside, but if it’s sitting in an easy-access account earning barely any interest, your savings are losing value in real terms.

With inflation still high, the cost of leaving cash in low-yield accounts is higher than many realise.

Adam French, head of news at Moneyfactscompare.co.uk, says this mistake is all too common.

Adam said: “The likes of HSBC, Lloyds Bank, Santander, NatWest and Barclays all have easy access accounts paying around 1.1 to 1.2 per cent interest, far below the typical returns savers could expect, which is currently 3.51 per cent.”

The top performing options can pay even more, and shopping around and switching accounts only takes a few minutes online.

6. Not making the most of your ISA allowance

More savers than ever are being hit with tax bills they could have avoided.

Frozen tax thresholds mean that even modest savers can end up over the personal savings allowance, paying tax on any interest they earn.

That means, if you’re not using your ISA allowance, you’re potentially giving money away for free.

French explains: “Saving and investing are some of the best ways to build wealth over time.

“But it’s important that savers are aware of their tax liability on any profits they make – which can add up over the course of a few years.

Plenty of savers can avoid this tax bill by making use their yearly ISA allowances.

You can save or invest up to £20,000 a year tax-free, and every pound sheltered from tax is a pound that keeps working for you.

7. Only saving for retirement, and nothing else

Putting money into a pension is smart, but it shouldn’t be your only savings plan.

Many people now take career breaks, retrain, care for relatives or start businesses, and those transitions need funding too.

Mathar says ignoring this reality can leave people exposed.

“We don’t live three-stage lives anymore – education, work, retirement… A ‘transition fund’ – even just a few months’ salary – makes those big life pivots possible without financial panic.”

8. Being too harsh on yourself when things go wrong

Money mistakes happen. But too often, people fall into a cycle of guilt and avoidance, especially if they’re already struggling.

That mindset can stop you from facing your finances or reaching out for help, which only makes things worse in the long run.

Mathar believes the solution starts with self-empathy. “Here’s the truth: we’re all a bit messed up when it comes to money.

Our brains are wired for short-term wins, not long-term planning.

The goal isn’t to be perfect with money; it’s to build enough slack, mental and financial, so that one mistake or setback doesn’t knock you flat.”

9. Not overpaying your mortgage when you could

With mortgage rates still high and household budgets under pressure, many borrowers are choosing longer terms to keep monthly payments manageable.

But unless you’re also making overpayments, that strategy can come at a serious long-term cost.

French says small changes now can lead to huge savings later: “Overpaying by £200 per month on that same £250,000 40-year mortgage could shave almost 13 years off the mortgage term, saving them around £123,000 in interest payments.

“This is all without being tied to having to consistently make higher payments every single month – boosting the flexibility of their budget and their financial resilience.”

Most lenders allow up to 10 per cent overpayment each year.

Even £50 a month can help you become mortgage-free sooner and pay far less in interest overall.

Published on
29/08/2025 – 12:28 GMT+2

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Leading banks in the UK saw their share prices hit hard as news of a proposed new bank tax emerged.

NatWest share prices lost more than 4.7% nearing midday in Europe, Lloyds saw a dip of 4.5%, and Barclays lost 3.7%. This dragged down the benchmark stock index in London; the FTSE 100 was down by nearly 0.4% at time of reporting.

“NatWest, Lloyds and Barclays were the FTSE 100’s biggest fallers on Friday morning as investors wondered if the era of bumper profits, dividends and buybacks is now under threat,” Russ Mould, investment director at AJ Bell, said.

The idea for the new tax came in a proposal from think-tank IPPR to the UK government on Friday. They suggest charging commercial banks to compensate for the losses of the Bank of England’s massive government bond buying—‘quantitative easing’ (QE)—programme. This “will cost the taxpayers £22 billion (€25.4bn) a year in every year of this parliament,” said the IPPR in their report.

The so-called quantitative easing is a monetary policy tool which provided a boost to the UK economy and yielded significant profits for a while. However, since December 2021, the Bank of England has increased its interest rate from close to zero to a peak of 5.25% and that took a toll on the programme and led to interest rate losses.

The think tank said in its report that the government could compensate for the loss partially by implementing a ‘QE reserves income levy’ on commercial banks.

It is unclear where the government stands on this issue at the time of writing the article, but analysts say that it could choke growth in the UK.

“The issue is whether taxing the banks more will end up stifling the very growth the government is keen to foster, by crimping lending to businesses and households alike,” said Mould.

However, the public opinion could be supportive, given that “HSBC, Barclays, NatWest and Lloyds are expected to earn some £44 billion (€50.7bn) between them worldwide in 2025, their third-best year ever, after 2023 and 2024,” he adds.

The investment director noted: “These companies have enjoyed a strong run on the stock market in recent years, and they’ve also played an important role in lending money to small and large businesses, which helps to create jobs and support the UK economy.”

CHANCELLOR Rachel Reeves was warned she will hit tenants if the Treasury pursues plans to hike taxes on landlords.

She is considering putting National Insurance on rental income to fill a £50billion black hole at the autumn Budget.

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But housing experts blasted the move.

TV property show presenter Kirstie Allsopp, said: “This is tenant bashing under the guise of landlord bashing. It’s like having the economy run by Baldrick.”

Ben Beadle, of the National Residential Landlords Association, said: “This will hit the very households the Government wants to protect.”

Earlier in the week, The Sun reported that firms were bracing themselves for a £2.5billion Labour tax double whammy.

They would be clobbered twice — first by an inflation rate increase in business rates in April, then by a Rachel Reeves surcharge, experts said.

Business rates are the property tax that companies must pay just to occupy their shops, pubs, factories and offices.

The Tories warned thousands of struggling firms would be crippled.

Shadow Housing Secretary James Cleverly said: “Once again, Labour is hammering the high street. Raising business rates for thousands of hard-working small businesses across England was one of Labour’s first acts in office.

“And despite our opposition to it, and clear evidence of the damaging impact it will have, they have pressed ahead — consequences be damned.”

The first squeeze would come in April when bills rise automatically with inflation.

The Bank of England expects the rate will hit four per cent next month.

Global tax firm Ryan said that would add £1.11billion to business rates across England.

The second blow would come when Chancellor Ms Reeves introduces a supplementary multiplier on larger premises next year.

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HUNDREDS of thousands of Brits could be hit by a surprise £500 tax bill as a new rule comes into effect. 

The new scheme could affect nearly 900,000 business owners across the UK. 

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The Government’s new Making Tax Digital scheme will require people over a certain income threshold to keep electronic records and file updates every financial quarter.

The move is part of the Government’s efforts to crack down on tax fraud, which cost Britain £12.4 billion from 2021 to 2022.

However, financial advisors have warned that the cost of reporting your tax figures could cost up to £500 a year once staff training, software and admin time are factored in – according to George Holmes, managing director of Aurora Capital. 

Only people who earn £50,000 from self-employment or from rental properties will be subject to the new rules.

Ahead of the change, Craig Ogilvie, director of Making Tax Digital at HMRC, said: “With April 2026 on the horizon, we are issuing letters to customers we believe will be mandated, outlining specific requirements and timelines.”

He added: “We urge those who meet the mandate criteria to join our testing programme on GOV.UK now to help shape the final service and make your transition smoother.”

An estimated 864,000 sole traders and landlords will need to comply with the new rules.

James Murray MP, Exchequer Secretary to the Treasury, said: “MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.”

Murray added: “By modernising how people manage their tax, we’re helping businesses work more efficiently and productively while ensuring everyone pays their fair share.”

The news comes after experts warned Rachel Reeves that she would have to find £50 billion to plug a black hole in Britain’s finances. 

The Chancellor has remained committed to her fiscal rules, which requires the UK to have financial cushion of £9.9billion by the end of the decade.

In order to put the UK’s finances on a firm footing, experts from the National Institute of Economic and Social Research have said that Ms Reeves will have to raise taxes.

Prof Stephen Millard, from the institute, said: “We would advocate building a bigger buffer. 

“To do that requires moderate but sustained increases in taxes.”

The think tank also upped its growth forecast for this year to 1.3 per cent but knocked their prediction for 2026 down to 1.2 per cent from 1.5 per cent.

Meanwhile, tax refund letters have started landing on doorsteps across the UK but Brits have been warned to watch out for scams.

A Freedom of Information (FOI) request by The Sun found that HMRC refunded a staggering £8.3billion in overpaid tax from 2022 until 2023 — with the average worker pocketing £943.

However, any letter or email which requires you to give your credit card details, transfer money or click a link should be avoided at all costs. 

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A SUPERMARKET giant has made a huge change to its shops, in a boost for customers who want to pay with cash.

Morrisons has introduced 40 cash machines into its supermarkets across the UK, making it the UK’s largest non-bank network.

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A further 13 ATMs are set to launch in the coming months to make it even easier for customers to access cash.

Shoppers can use the ATMs to withdraw and pay in money as part of their regular shop.

The ATMs are now available in the following Morrisons supermarkets:

• Acocks Green
• Speke
• Eccles
• Witham
• Aldershot
• Swadlincote
• Failsworth
• Blyth
• Bideford
• Swinnow Road
• Grays Buxton
• Bishop Auckland
• Wednesbury
• Hull (Holderness Road)
• Colwyn Bay
• Bromsgrove
• Kirkby
• Ilkeston
• Dover
• Cardonald
• Bellshill
• Leyland
• Letchworth
• Carmarthen
• Castle Bromwich
• Malton Nelson
• Chippenham
• Coalville
• Oswestry
• Redcar
• Crossmyloof
• Hyde
• Partick
• Oxted
• Ebbw Vale
• Sidcup
• Small Heath
• New Milton

So far, more than £1million a month has been paid into banks using these ATMs.

The machines are operated by NoteMachine and were delivered thanks to a partnership with Cash Access UK, a company funded by major high street banks to bring cash services to communities.

Ben Mildred, treasury manager at Morrisons, said: “We’re proud to be helping make banking more accessible by offering cash deposit services in our stores.

“Customers have told us they like the flexibility and convenience the cash deposit ATMs offer and so we are pleased to be rolling them out to more stores in the coming weeks.”

The news comes after UK banks closed more than a third of branches over the past five years, leaving customers without access to banking services.

Lloyds, Halifax, NatWest and Bank of Scotland are set to shut more than 100 bank branches by the end of the year.

Elsewhere, Santander is set to close 95 branches and reduce hours at another 50.

Other ways you can access cash

There are still several ways you can access basic banking services without having to travel to another town with a branch.

If all the banks in your town have closed then you may be able to get a banking hub.

Banks visit the hub on a rotating basis, and take it in turns to use the site on different days of the week.

You can use them to withdraw cash, pay in money, check your balance and pay bills.

Another option is to visit one of the Post Office’s 11,684 branches to do basic banking tasks such as paying in or withdrawing cash.

But you will still need to visit a branch to open a new bank account, take out a personal loan or mortgage.

You can find your nearest Post Office by visiting postoffice.co.uk/branch-finder.

Many banks also offer a mobile banking service, which is when they bring a bus to your area to provide services you can usually get at a physical branch.

Other banks use buildings such as village halls or libraries to offer mobile banking services.

You should check your bank’s website to see what mobile services are available and when they might next be in your area.

New super ATMs are being rolled out across the UK where branch closures have left residents unable to access essential banking services.

These ATMs will allow customers to withdraw funds, access their balance, change PIN numbers and deposit cash.

Do you have a money problem that needs sorting? Get in touch by emailing [email protected].

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

FEARS are growing that Rachel Reeves could slap a new tax on people’s homes to replace stamp duty and council tax.

The Chancellor is studying plans for a levy on houses worth over £500,000, according to The Guardian.

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The paper said the Treasury is looking at a “proportional property tax” which would be paid when owners sell their homes.

It claimed the shake-up could also pave the way for a new local levy to replace council tax, which is still based on 1990s property values.

But Treasury officials last night insisted that while tax reform is being explored, the details – including any threshold or rate – have not been decided.

A Treasury spokesperson said: “The best way to strengthen public finances is by growing the economy – which is our focus.

“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8bn and cut borrowing by £3.4bn.

“We are committed to keeping taxes for working people as low as possible, which is why at last Autumn’s Budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of Income Tax, employee National Insurance, or VAT.”

The Sun reported yesterday that homeowners would be forced to hand over £82,000 to the taxman thanks to Reeves’ inheritance tax raid.

Inheritance tax is charged on all assets above the £325,000 threshold, which is called the nil-rate band.

Anything above this threshold is charged at 40%, but your tax-free allowance rises by £175,000 if you leave your home to a direct descendant, such as a son, daughter or grandchild.

Currently, pension pots are exempt from inheritance tax – but this will all change from April 2027, when they will suddenly be subject to the 40% levy, following a tax grab announced in last year’s October Budget.

The change is expected to increase the number of estates paying death duties from 4% to 9.7%, dragging thousands of people into the tax net.

New analysis by Quilter shows that grieving families could face a nasty bill sting following the changes.

A MAJOR bank with millions of customers is make a huge change to dozens of bank accounts starting within days.

The Co-operative Bank is cutting interest rates on 36 savings accounts, delivering a fresh blow to savers.

It comes just days after the Bank of England lowered the base rate from 4.25% to 4%, marking the fifth interest rate cut since 2020.

The decision means lower mortgage payments for homeowners but often leads to smaller returns for savers.

That’s because the base rate impacts the interest rates banks offer on savings accounts and loans, including mortgages.

The Co-operative Bank has wasted no time, announcing that interest rates on dozens of accounts will be reduced starting on August 14 and October 22.

On August 14, the Base Rate Tracker accounts will see reductions, with interest rates dropping from 4% to 3.75% and from 3.75% to 3.5%.

For example, if you had £1,000 deposited for 12 months, the interest earned at 4% would have been £40.

After the rate drops to 3.75%, you would earn £37.50 – a difference of £2.50.

Similarly, with the rate falling from 3.75% to 3.5%, the interest earned would decrease from £37.50 to £35, meaning £2.50 less over the year.

From October 22, various other accounts will experience cuts, including the Future Fund, which will see its rate fall from 1.53% to 1.46%, and the Online Saver, dropping from 2.12% to 2.06%.

Other affected accounts include the Smart Saver, Select Access Saver 5, and Privilege Premier Savings, with reductions ranging from 4.15% to 3.9% and 3.53% to 3.4%. 

Cash ISA holders will also be impacted, with Cash ISA 2 rates falling from 3.25% to 3%.

Fortunately, several savings providers still offer returns of up to 5%.

With the average bank customer holding around £10,000 in savings, according to Raisin, switching could be a smart move.

To help you get the best returns, we’ve listed the top savings rates for each account type below.

What’s on offer?

If you’re looking for a savings account without withdrawal limitations, then you’ll want to opt for an easy-access saver.

These do what they say on the tin and usually allow for unlimited cash withdrawals.

The best easy access savings account available is from Cahoot, which pays 5% – and you only need to pay a minimum of £1 to set it up.

This means that if you were to save £1,000 in this account, you would earn £50 a year in interest.

Meanwhile, West Brom Building Society’s easy access account offers customers 4.55% back on savings worth £1 or more.

If you’re okay with being less flexible about withdrawals, a top notice account could be a great option.

These accounts offer better rates than easy-access accounts but still let you access your money more flexibly than a a fixed-bond.

RCI Bank UK’s 95 day notice account offers savers 4.7% back with a minimum £1,000 deposit, for example.

This means that if you were to save £1,000 in this account, you would earn £47 a year in interest.

Meanwhile, GB Bank’s 120-day notice account offers 4.58%, requiring a minimum deposit of £1,000.

If you want to lock your money away and keep the same savings rate for a set time, a fixed bond is a good choice.

The best fixed rate currently offered is Vanquis Bank’s one-year fixed bond, which pays 4.44%, requiring a minimum deposit of £1,000.

Meanwhile, Atom Bank’s one-year fixed bond offers 4.42% back on a deposit of £50 or more.

This means that if you were to save £1,000 in this account, you would earn £44.20 a year in interest.

If you want to build a habit of saving a set amount of money each month, a regular savings account could pay you dividends.

Principality Building Society’s Six Month Regular Saver offers 7.5% interest on savings.

It allows customers to save between £1 and £200 a month.

Save in the maximum, and you’ll earn £25.81 in interest.

While regular savings accounts look attractive due to the high interest rates on offer, they are not right for all savers. 

You can’t use a regular savings account to earn interest on a lump sum.

The amount you can save into the account each month will be limited, typically to somewhere between £200 and £500.

Therefore, if you have more to save, it would be wise to consider one of the other accounts mentioned above.

A WARNING has been issued to savers missing out on hundreds of pounds ahead of a key Bank of England (BoE) decision this week.

People risk the cash blow because they’re leaving money in low-paying easy access accounts.

The latest data from Moneyfactscompare.co.uk reveals someone with £10,000 in savings could earn an extra £300 by switching to an account with a higher interest rate.

Adam French, from the comparison site, said savers were in danger of their hard-earned cash “languishing” by making the mistake.

“Simply switching a £10,000 savings pot away from a high street bank’s easy access account to a market-leading one-year fix can leave you £300 better off in 12 months’ time.

“Not a bad return for a few minutes’ work, if you aren’t going to need access to the money sooner.”

The warning comes ahead of the BoE’s Monetary Policy Committee (MPC) meeting on Thursday (August 7) where it will decide what to do with the base rate.

The base rate is charged to high street banks and other lenders and usually reflected in savings and mortgage rates.

Any fall is good news for mortgage holders who tend to see rates plummet, but it spells bad news for those with savings accounts.

The bank is widely expected to cut the base rate, which currently sits at 4.25%.

The MPC, made up of nine members, last met in June when it decided to keep interest rates unchanged.

Six members voted to keep rates at the existing level while three members voted for a cut to 4%.

The BoE uses the base rate to control inflation, with a hike designed to discourage spending and keep prices in check.

The current Consumer Price Index (CPI) measure of inflation is 3.6%, over the BoE’s 2% target.

However, the MPC is under pressure to lower interest rates to get the stagnating economy growing.

How to make your savings work harder

You can’t do anything to control what the BoE does with the base rate, but you can make your savings work harder.

One way to do this is by locking your savings into a fixed-term account.

These accounts pay out an interest rate for a set period of time, from anywhere between six months and five years.

Fixed-rate savings accounts generally offer better interest rates in exchange for you not being to withdraw any cash.

Just bear in mind you may have to pay a charge for any early withdrawals.

Second, it’s worth making the most of ISAs which allow you to save money without having to pay tax on any interest earned.

You can spread a total of £20,000 across various ISA types including Cash ISAs and Stocks and Shares ISAs.

And of course, shop around for the best deals so you’re not left with a low-paying savings account.

Comparison sites like moneyfactscompare.co.uk and moneysavingexpert.com can help you find the best account suited to you.

A MAJOR high street bank has become the latest British lender to quit the Net Zero Banking Alliance, the bank said on Friday.

Barclays argued that the departure of several global lenders has left it no longer fit to support the bank’s green transition.

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Barclays’ decision to quit the foremost banking alliance focused on tackling climate change follows on from HSBC and several major US banks.

It also raises questions about the ability of the group to influence change in the sector going forward.

The bank said in a statement on its website: “After consideration, we have decided to withdraw from the Net Zero Banking Alliance.”

It added that its commitment to be net zero by 2050 remained unchanged and that it still saw a commercial opportunity for itself and its clients in the energy transition.

Earlier this week Barclays published the first update on its sustainability strategy in several years.

It said the bank made £500 million in revenue from sustainable and low-carbon transition finance in 2024.

Jeanne Martin, co-director of corporate engagement at responsible investment NGO ShareAction called the decision to leave the Net Zero Banking Alliance “incredibly disappointing and a step in the wrong direction at a time when the dangers of climate change are rapidly mounting.”

Barclays said the alliance was no longer fit for its purpose: “With the departure of most of the global banks, the organisation no longer has the membership to support our transition.”

The Net Zero Banking Alliance, a global initiative launched by the United Nations Environment Programme Finance Initiative, lists more than 100 members on its website – including leading international financial institutions.

A spokesperson for the alliance said it remains focused on “supporting its members to lead on climate by addressing the barriers preventing their clients from investing in the net-zero transition.”

It comes after it was announced that Barclays is slashing interest rates on its popular Rainy Day for the third time in less than seven months.

From August 4, the interest rate for balances up to £5,000 will fall from 4.61% to 4.36%.

The Rainy Day Saver account, which offers easy access to funds, has been a favourite among Barclays‘ 20 million customers.

It is designed for balances up to £5,000, with savers earning the higher rate on the first £5,000 – currently 4.61%.

Savings above this threshold earn just 1% interest, but customers benefit from instant access to their money at any time.

At the current rate, holding £5,000 in the account would earn you £230.50 in interest over 12 months.

However, when the rate drops to 4.36%, this will fall to £218 – a loss of £12.50 per year.

Once boasting a competitive 5.12% interest rate earlier this year, Barclays has steadily chipped away at its appeal.

In February, the rate dropped to 4.87%, followed by another cut in April to 4.61%.

In February, the bank reduced the rate to 4.87%, followed by another cut in April to 4.61%.

Now, just months later, rates are set to drop again, leaving savers questioning whether to stick with the account or explore better options elsewhere.

How Barclay Card Changes Could Affect You

ANALYSIS by Consumer Reporter, James Flanders:

Barclaycard’s change to its credit card repayment structure sounds great if you don’t dig into the details.

After all, Barclaycard says it’s “making the changes to give you greater flexibility each month”.

In practice, it means that if you can’t afford to pay off your balance in full at the end of each statement period, you can repay much less under the minimum repayment option than you have done previously.

If you only pay the minimum amounts on occasion, this is super useful.

But if you rely on this type of repayment plan in the long term, it could will cost you hundreds of pounds extra in interest.

It could also negatively affect your credit file as it’ll take you much longer to clear your debt.

More interest will be applied to your outstanding balance, too, as less is paid down each month.

For example, if you have a balance of £5,000 on a Barclaycard at 24% interest, where you only make the minimum payments and don’t spend on the card.

Under the old “2.5% of the balance plus the interest charged” rule, it would take around 14 years to clear the balance.

In total, you’d expect to pay about £3,500 in interest.

But with the new “1% of the balance plus the interest charged” calculation, it will take over 30 years to clear the same balance.

You’d then end up paying a whopping £8,500 in interest.

Before taking out a new credit card or increasing the amount you borrow, it’s vital to consider the consequences.

You should only borrow money if you can afford to pay it back.

It’s always vital to ask yourself if you actually need to borrow before committing to a new credit card, personal loan or overdraft.

If you use a credit card, I’d recommend that you always pay off your balance in full at the end of each statement period.

Lenders have a responsibility to help customers who are in debt.

If you’re in a debt crisis, your first point of call should be your lender.

They might help you out by offering you a reduced interest rate or a temporary payment holiday – so check in with your lender if you’re struggling.

HOMEWARE giant Wayfair has slashed its UK workforce by more than half in just two years, as it grapples with tumbling sales and a sharp drop in profit.

The US-based furniture retailer, which operates across Britain, cut staff numbers from 847 in 2022 to just 405 by the end of 2024, according to fresh filings with Companies House.

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The dramatic reduction follows a tough period for the business, with UK turnover plunging from £83.4million in 2022 to just £59.4million last year.

Profits also took a hit, with pre-tax earnings slipping from £2.6million to £2.2million over the same period.

Wayfair said it had made a 17 per cent cut to administrative expenses and was now focused on “driving cost efficiency” and “nailing the basics” as it tried to steady the ship.

Despite the ongoing slowdown, bosses remain upbeat about the retailer’s long-term prospects and said the group is working towards maintaining profitability and generating positive free cash flow.

The wider company reported a net revenue of $11.9billion (£8.8billion) globally last year – down $152million (£112million) on the year before.

International sales fell to $1.5billion (£1.1billion), while revenue in its core US market dropped to $10.4billion (£7.7billion).

Wayfair recorded a net loss of $492million (£363million) despite raking in $3.6billion (£2.7billion) in gross profits.

There was some relief in early 2025, as first-quarter results showed a $1billion (£740million) rise in total revenue, thanks to a modest recovery in US sales.

However, international takings continued to fall, dipping by $37million (£27million) to $301million (£223million).

Wayfair isn’t the only retailer feeling the pinch on the high street. Furniture favourite MADE.com collapsed into administration in 2022 after failing to find a buyer, leading to hundreds of job losses.

Habitat also shut down all standalone stores in 2021, moving exclusively online after years of underperformance.

Even major players have been forced to adapt.

Wilko closed its doors for good in 2023 after nearly a century in business, with more than 400 stores shutting and 12,000 staff affected.

Argos has continued to reduce its physical footprint, shutting dozens of standalone shops and moving into parent company Sainsbury’s stores to save costs.

Retail experts say changing consumer habits, rising costs and weaker demand are continuing to batter the home and furniture sector.

Many shoppers have tightened their belts amid soaring bills and higher interest rates, with big-ticket items like sofas and beds often the first to be cut from household budgets.

Wayfair bosses said the company remains “resilient” in the face of economic uncertainty and is pressing ahead with its long-term strategy to streamline operations and stay competitive.

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A major bank will axe a key bank account perk for thousands of customers in a matter of days.

Halifax, part of Lloyds Banking Group, is getting rid of “Extras” for Rewards current account holders.

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The bank currently charges a £3 monthly fee to run this bank account and customers are given freebies in return for hitting certain targets.

For example, customers can get £5 paid into their bank account or a free cinema ticket if they either spend £500 on their debit card each month or hold a balance of over £5,000.

Halfiax has plans to close down this service come September, meaning customers who meet these targets will no longer get a reward.

To prepare for this, Halifax has told customers that from June 17 they will no longer be able to add Reward Extras to their account or renew an existing Reward Extras offer.

But it is not all bad news as the bank is axing the service to make way for a number of new features.

Currently, Halifax charges a £3 monthly fee to run this bank account and customers are given freebies in return for hitting certain targets.

For example, customers can get £5 paid into their bank account or a free cinema ticket if they either spend £500 on their debit card each month or hold a balance of over £5,000.

But the bank has plans to close down this service come September, meaning customers who meet these targets will no longer get a reward.

This includes fee-free debit card spending abroad and a £100 interest free arranged overdraft to existing and new eligible Reward account customers. 

Rewards customers are currently charged a 2.99% fee for using their debit card abroad.

That means customers are currently charged an extra £2.99 for using their debit card to pay £100 abroad.

This change will come into effect on August 1.

Customers who meet the requirements will also be allowed to enter into a £100 overdraft and not face any interest.

OTHER BANK CHANGES

The Co-operative Bank announced it would be increasing the monthly charge on its Everyday Extra package bank account in July.

Currently, customers pay a monthly fee of £15, totalling £180 a year.

But starting from July 1, this fee will increase to £18 a month—an extra £36 annually.

Elsewhere, Lloyds recently hiked the cost of its Club Lloyds account from £3 to £5.

The packaged account provides extra benefits including a Disney plus subscription, cashback rewards, and access to linked savings accounts with preferential interest rates.

Skipton Building Society also recently lowered the interest on a total of 92 types of savings accounts.

How do I switch bank accounts?

SWITCHING bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).

Dozens of high street banks and building societies are signed up – there’s a full list on CASS’ website.

Under the switching service, swapping banks should take seven working days.

You don’t have to remember to move direct debits across when moving, as this is done for you.

All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.

There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.

You should get in touch with your existing bank for any old statements.

When switching current accounts, consider what other perks might come with joining a specific bank or building society.

Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.

And some banks offer free travel or mobile phone insurance with their current accounts – but these accounts might come with a monthly fee.

A BELOVED cafe that served customers classic English breakfasts for nine years has been forced to close due to the cost of living.

The owner said it is “impossible to carry on” in the current climate.

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Traditional cafe Deb’s Diner in Birmingham posted the sad update on Facebook.

“It is with great sadness that Deb’s Diner has closed it doors for the very last time.

“Due to ill health and the current cost of living crisis, it has become impossible to carry on so we have decided not to renew our lease.

“We would like to thank all of our customers for their continued support over the last nine years, it’s been a wonderful journey.”

Customers commented to express their sadness and to send best wishes.

It comes after the Chancellor’s hike to national insurance contributions and minimum wage for firms kicked in at the start of April.

The NI rise has hit investment, recruitment and prices.

Businesses were dealt the £25 billion ‘Jobs tax’ raid at the Budget with the increased contributions as confidence among entrepreneurs taking a hit.

From April 6, businesses  have to pay a higher rate of employer National Insurance contributions (NICs) of 15% from 13.8%.

The threshold at which they are paid is also being lowered from £9,100 to £5,000.

The Government confirmed it was making the changes in its Autumn Budget last October in a bid to increase revenue.

It also said the move meant it wasn’t increasing taxes for working people.

However, it will have an impact on shoppers and everyday consumers as businesses look to pass on the additional costs.

Figures show that almost a third of businesses affected by the hike are planning to cut jobs or freeze hiring.

It comes on the back of 160,000 part-time retail jobs are on the cusp of going in the next two years due to a rise in Labour costs.

2

A MAJOR building society will make a big change to 47 savings accounts in weeks.

Nationwide is slashing the rates on several of its savings accounts.

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The moves comes after rate-setters on the BoE’s Monetary Policy Committee cut the base rate from 4.5% to 4.25%.

This was the fourth interest rate cut since 2020.

The base rate is used by lenders to determine the interest rates offered to customers on savings and borrowing costs.

A base rate cut can mean that mortgage rates are lowered, which is good news for homeowners.

But it can mean that savers lose out as the interest they earn on savings will drop.

As the base rate falls some lenders, including Nationwide, have chosen to lower the interest rates on some savings accounts.

That includes its Triple Access Saver account which will see interest lowered from 1.95% AER to 1.80% come July 1.

AER, or Annual Equivalent Rate, is used to show you what you could earn from a savings account over a year. 

Its Cash Child Trust Fund will also have its interest lowered.

The rate will be lowered from 3.55% AER to 3.30% next month.

Meanwhile, the interest on its Help To Buy ISA will be lowered from 2.90% to 2.70%

You can take a look at the full list of account changes below

• Branch Limited Access
  • Previous rate: 1.90% AER/gross (variable)
  • New rate: 1.75% AER/gross (variable)
• Limited Access Online Saver
  • Previous rate: 1.90% AER/gross (variable)
  • New rate: 1.75% AER/gross (variable)
• Limited Access Saver
  • Previous rate: 1.90% AER/gross (variable)
  • New rate: 1.75% AER/gross (variable)
• Branch Reward Single Access ISA
  • Previous rate: 3.35% AER/tax-free (variable)
  • New rate: 3.25% AER/tax-free (variable)
• Branch Single Access ISA
  • Previous rate: 3.35% AER/tax-free (variable)
  • New rate: 3.25% AER/tax-free (variable)
• Reward Single Access ISA
  • Previous rate: 3.35% AER/tax-free (variable)
  • New rate: 3.25% AER/tax-free (variable)
• Branch Single Access
  • Previous rate: 3.35% AER/gross (variable)
  • New rate: 3.25% AER/gross (variable)
• Single Access Saver
  • Previous rate: 3.35% AER/gross (variable)
  • New rate: 3.25% AER/gross (variable)
• Triple Access Online ISA
  • Previous rate: 1.80% AER/tax-free (variable)
  • New rate: 1.60% AER/tax-free (variable)
• Branch Triple Access ISA
  • Previous rate: 1.95% AER/tax-free (variable)
  • New rate: 1.80% AER/tax-free (variable)
• Triple Access ISA
  • Previous rate: 1.95% AER/tax-free (variable)
  • New rate: 1.80% AER/tax-free (variable)
• Branch Easy Access ISA
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• Easy Access ISA
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• Easy Access ISA 2
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• e-ISA
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• Fixed Term ISA Maturity
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• Fixed Term Cash ISA Maturity
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• Inheritance ISA
  • Previous rate: 1.55% AER/tax-free (variable)
  • New rate: 1.30% AER/tax-free (variable)
• Branch Reward Saver
  • Previous rate: 3.30% AER/gross (variable)
  • New rate: 3.20% AER/gross (variable)
• Reward Saver
  • Previous rate: 3.30% AER/gross (variable)
  • New rate: 3.20% AER/gross (variable)
• Help to Buy: ISA
  • Previous rate: 2.90% AER/tax-free (variable)
  • New rate: 2.70% AER/tax-free (variable)
• e-Savings Plus
  • Previous rate: 1.90% AER/gross (variable)
  • New rate: 1.75% AER/gross (variable)
• Branch Smart Limited Adult
  • Previous rate: 2.85% AER/gross (variable)
  • New rate: 2.75% AER/gross (variable)
• Branch Smart Limited Child
  • Previous rate: 2.85% AER/gross (variable)
  • New rate: 2.75% AER/gross (variable)
• Smart Limited Access Adult
  • Previous rate: 2.85% AER/gross (variable)
  • New rate: 2.75% AER/gross (variable)
• Smart Limited Access Child
  • Previous rate: 2.85% AER/gross (variable)
  • New rate: 2.75% AER/gross (variable)
• Future Saver
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Children’s Future Saver Issue 1
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Branch Future Saver
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Cash Child Trust Fund
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Child Trust Fund Maturity ISA
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Junior ISA Maturity
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Smart Junior ISA
  • Previous rate: 3.55% AER/gross (variable)
  • New rate: 3.30% AER/gross (variable)
• Branch Flex Saver
  • Previous rate: 1.65% AER/gross (variable)
  • New rate: 1.50% AER/gross (variable)
• Flex Online Saver Issues 1 and 2
  • Previous rate: 1.65% AER/gross (variable)
  • New rate: 1.50% AER/gross (variable)
• Flexclusive Saver
  • Previous rate: 1.65% AER/gross (variable)
  • New rate: 1.50% AER/gross (variable)
• Flex Saver
  • Previous rate: 1.65% AER/gross (variable)
  • New rate: 1.50% AER/gross (variable)
• Corporate Savings
  • Previous rate: 1.56% AER/1.55% gross (variable)
  • New rate: 1.30% AER/1.30% gross (variable)
• Branch Flex ISA
  • Previous rate: 1.60% AER/tax-free (variable)
  • New rate: 1.50% AER/tax-free (variable)
• Flex ISA
  • Previous rate: 1.60% AER/tax-free (variable)
  • New rate: 1.50% AER/tax-free (variable)
• Instant Access Saver Issue 10
  • Previous rate: 1.85% AER/gross (variable)
  • New rate: 1.70% AER/gross (variable)
• Single Access ISA
  • Previous rate: 3.35% AER/tax-free (variable)
  • New rate: 3.25% AER/tax-free (variable)
• 1 Year Triple Access Online ISA
  • Previous rate: 4.00% AER/tax-free (variable)
  • New rate: 3.75% AER/tax-free (variable)
• 1 Year Triple Access Online ISA Issues 16 and 17
  • Previous rate: 4.00% AER/tax-free (variable)
  • New rate: 3.75% AER/tax-free (variable)
• 1 Year Triple Access Online ISA Issue 18
  • Previous rate: 4.00% AER/tax-free (variable)
  • New rate: 3.75% AER/tax-free (variable)
• 1 Year Triple Access Online Saver Issues 3, 5, 9, 12, 15, 16, 17
  • Previous rate: 4.00% AER/gross (variable)
  • New rate: 3.75% AER/gross (variable)
• 1 Year Triple Access Online Saver Issue 18
  • Previous rate: 4.00% AER/gross (variable)
  • New rate: 3.75% AER/gross (variable)

If you are not happy with the change, it is always worth looking at other providers to see if you can get a better deal.

Websites such as MoneyFacts share the best offers on the market for savings and other types of bank accounts.

OTHER BANKING CHANGES

Nationwide is not the only bank lowering the interest on some of its deals.

Leeds Building Society is slashing the rates on 58 of its savings accounts.

That includes its Five Access Saver which will have its interest rates lowered from 3.77% AER to 3.55% come June 27.

Meanwhile, Vault customers will see interest rates on their account from 3.80% AER to 3.65% come June 26.

The change will take place from June 23, but dates can vary from offer to offer.

Online bank Monzo also lowerd the intertest on its Personal Instant Access Savings Pots from from 3.50% AER to 3.25% AER.

SANTANDER is slashing interest rates for two of its savings accounts from today – and customers should check if they’re affected.

The major bank is cutting savings rates from June 3 (today) on its Good for Life ISA and Rate for Life accounts.

1

The interest rate on the Good for Life ISA account will drop from 4.5% to 4.25%, while the rate for the Rate for Life account will drop from 4.75% to 4.5%.

Those who have saved less than £1,000 in the Rate for Life account will still continue to earn the same rate (1%) on these balances.

It comes after the Bank of England (BoE) cut the base rate from 4.5% to 4.25% last month – the fourth cut since 2020.

The base rate is used by banks to determine the interest rates offered to customers on savings and borrowing costs.

While a rate cut is good news for borrowers, it’s usually bad news for savers, who will usually see savings rates fall when the base rate is cut.

This means they will earn less on their cash.

For example, the average easy access savings rate was 2.78% on May 8, when the base rate was cut.

Now it has dropped to 2.72%, according to comparison site Moneyfacts.

Santander is not the only bank cutting rates on savings accounts. HSBC has also cut rates on eight of its savings accounts today.

Nationwide Building Society cut savings rates on 63 of its accounts on Sunday, from easy-access ISAs to children’s accounts.

NatWest cut savings rates on four of its accounts last Friday.

Meanwhile, rates on three of its savings accounts and a kids’ current account will be slashed from July 15.

How to get the best savings rate

As savings rates tumble, now is a good time to check what the interest rate is on your existing account.

Around £280billion is sitting in accounts paying zero interest, according to latest data from the BoE.

If you have an interest rate below the rate of inflation – which is currently 3.5% – then consider moving your money elsewhere, otherwise the spending power of your savings is eaten away.

Use price comparison sites such as moneysavingexpert.com or moneyfactscompare.co.uk to browse the best savings accounts on the market.

The best easy access savings rate (based on a balance of £1,000) is offered by Atom Bank at 4.5 per cent.

Experts are predicting that more cuts to the base rate this year are likely, so it may be worth considering locking up your money in a fixed rate savings account if you can afford to do so.

The best one year fixed rate savings account is offered by Hampshire Trust Bank at 4.45%.

However, be aware that you usually can’t make withdrawals out of fixed term savings accounts, even in an emergency.

Anne Bowes from The Private Office said: “Review your savings accounts and switch if you are being paid an uncompetitive rate.

“Double check the terms and conditions of any account you are looking to open – or indeed close – as some accounts may have very short-term bonuses or restricted access.

“That means you might not earn as much interest as you hoped, or get hold of the money in as timely a manner as you were expecting.”

How to switch banks

For customers not happy with the latest shake-up, you may want to consider switching banks.

Switching bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).

Dozens of high street banks and building societies are signed up – there’s a full list on CASS’ website.

Under the switching service, swapping banks should take seven working days.

You don’t have to remember to move direct debits across when moving, as this is done for you.

All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.

There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.

You should get in touch with your existing bank for any old statements.

When switching current accounts, consider what other perks might come with joining a specific bank or building society.

Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.

And some banks offer free travel or mobile phone insurance with their current accounts – but these accounts might come with a monthly fee.