Bereavement payments receive a controversial overhaul

Posted by Sophie Regester in Personal Finance on 10 February 2017 - Sophie is a Senior Credit Analyst at checkmyfile.

The government is planning an overhaul of bereavement payments and allowances set to start from April this year. Currently the system is there to help those married with children who find themselves suddenly the sole breadwinner.

Couples who are unmarried currently receive no benefit from the system and will continue to be ineligible under the new plans, even if they have children to support. Married young couples without children will find themselves eligible for the first time.

The pay-outs are funded from the National Insurance payments the deceased made over their lifetime, they make up a monthly allowance to contribute to all the day-to-day necessities needed to run a household and to support the children. Under the old system the payments were ongoing until to youngest child left school, under the new system the bereavement payments will support the family of the deceased for 18 months after they pass away but after that they are on their own.

In monetary terms, the worst affected could be £31,000 worse off, with the average working widowed parent finding their bank balance down by around £12,000. Some will be better off, including of course widows and widowers with no children who previously received no support.

The changes are billed as a modernisation of a system originally created in 1925 when typically there would be one breadwinner, now that there is a higher potential that both parents will be working the new system steps in for only 18 months when the help is most needed.

Under the changes it will be easier to make a claim, which will not be subject to tax and will not impact on the receipt of other benefits, therefore giving additional help to those on the lowest incomes.

This all sounds jolly nice but if you consider the tens of thousands of pounds the deceased may have paid out in National Insurance that would have gone to their pension that they will no longer be claiming, you might argue that this should dictate when the payments should stop.

Someone should benefit from the payments made and given the time the deceased spent away from their family working and earning a crust, the family should possibly receive an allowance until their family member’s NI payment pot is exhausted. Most will be worse off under the new system, which will affect those bereaved after April 6th this year.

Check Your Multi-Agency Credit Report

30 Day Free Trial

What To Do If You’re a Victim of Data Breach

Another day, another high-profile data breach, with the morning news bringing word of another leak of personal information that affects millions of consumers. This time it’s the turn of Dixons Carphone - the company behind PC World, Currys and Carphone Warehouse.

Published on 14 Jun 2018 by Jamie Mackenzie Smith

Full Article

What Does Bongo Know About You?

“What does Bongo know about you?” A slightly off-the-wall question I’ll grant you, but one that you might have been asked at some point in time.

Published on 7 Jun 2018 by Richard Catlin

Full Article

Why Don’t Millennials Take Out Credit?

As a millennial, it can feel like my generation is besieged with criticisms on a daily basis, and not all of them are entirely fair (though lots are). We are frequently told that as a generation we are entitled, we have it so much easier than our elders and arguably, worst of all: we buy too many avocados. While I don’t buy avocados, I do have access to credit, which makes me a minority among my age group.

Published on 16 May 2018 by Beth Jennings

Full Article

Why Is My Loan Balance Wrong On My Credit Report?

One of the single most important pieces of information to appear on your credit file is the information relating to your credit agreements and how you repay them - with this information lenders can see your borrowing history across the last six years and use it to help them decide whether or not to offer you finance.

Published on 7 May 2018 by George Coburn

Full Article

How long do closed accounts appear on my credit report?

Some people believe that as soon as a credit agreement is settled and closed, it will no longer be reported to the UK’s Credit Reference Agencies and therefore will no longer have an influence on future credit applications. However, this is a popular misconception, one that could affect your ability to get credit if not correctly understood.

Published on 2 May 2018 by Tom Magor

Full Article

How to Save Big in the Bank Holiday Sales

Bank holidays may not guarantee a day of sun-soaked fun, but as is British tradition, we’d probably be quite happy barbecuing in the snow if it came to it. But no matter what your plans are, if you want to grab a bargain, you can use the Bank Holiday sales to save some serious money.

Published on 26 Apr 2018 by Kiah Phillips

Full Article

Should I Buy or Finance an Aston Martin Valkyrie?

We’ve all been there. £3 million burning a hole in your pocket and a track-going version of Aston Martin’s latest hypercar sat in front of you. But as a shrewd, savvy business-type, you know that dropping £3m in one go on a 1,100bhp car could be considered a questionable, perhaps even ‘baller’ move. But what about putting it on finance?

Published on 13 Apr 2018 by Jamie Mackenzie Smith

Full Article

How to Build Credit History Without a Credit Card

When it comes to the best way to build up a credit history, conventional wisdom is to take out a credit card and use it for everyday purchases, while paying it off (on time) at the end of every month. There’s plenty to support this advice too, as a credit card allows you to spend as much or as little as your limit will allow, while building a history in a reasonably short amount of time.

Published on 26 Mar 2018 by Jamie Mackenzie Smith

Full Article

Which Credit Report Information Can Landlords See

Whenever you rent a property, you will be required to pass some checks set by the landlord or letting agent to prove that you will be a good tenant and that you’ll be able to afford to rent the property.

Published on 19 Mar 2018 by Kevin Pearce

Full Article

Do Student Loans Affect My Ability to Get Credit?

For many people, a student loan is the single largest chunk of borrowing they ever take out, second only to a mortgage. With course fees alone now coming to more than £9,000 per year and then the added maintenance loan on top of it, you can easily end up borrowing £40,000 during your studies.

Published on 8 Mar 2018 by Jamie Mackenzie Smith

Full Article


We have loads of great customer reviews