Paul Lewis: August money news
From inheritance tax pitfalls and rising savings rates to holiday spending traps and the latest fraud scams, our money expert explains what matters this month.
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From inheritance tax pitfalls and rising savings rates to holiday spending traps and the latest fraud scams, our money expert explains what matters this month.
The Treasury has banked more than £336 million recovered from people who thought they had a good wheeze to avoid inheritance tax. In the five years from 2021 to 2026, around 2,500 assets worth £840 million were given to relatives in the hope that the donor would live seven years and no IHT would be due.
But they all fell foul of a rule called GROB – a Gift with Reservation Of Benefit. If you give something away but continue to use it or have the benefit of it then it is not a gift and when IHT is worked out it counts as your property. A home is the most common failed gift – if your daughter lives there but you even keep the keys then it may fail the test.
Take advice from a tax specialist before making gifts.
Savings rates are rising and National Savings & Investments is joining the party.
It now pays 4.69% AER on its one-year guaranteed income or growth bonds – not quite a best buy(4.85% as I write) but very competitive and up to £1 million can be deposited with total safety – the normal limit with a bank is £120,000.
If you are abroad and a shop or restaurant asks if you want to pay in sterling or local currency, never choose sterling. The charges made by the retailer and their bank will always be higher than if you pay in euro, forints or leks using a credit or debit card.
Most UK banks charge nearly 3% to make the exchange but that will still cost less – and some banks add the 3% even if you pick sterling! However, a growing number of credit and debit cards do not make that scandalous ‘foreign usage’ charge, so get one of those and avoid the rip-off fees for using plastic abroad.
Thieves continue to beat the banks when it comes to stealing your money. The bank trade body UK Finance has revealed that £1.28 billion was stolen through fraud from just over 4 million people in 2025 – up 4% and 11% respectively on 2024. Investment fraud, where people are tricked into putting money into fake investments, rose by 40% to steal £221.5 million off 14,893 individuals.
If an investment is offered out of the blue, especially one seemingly endorsed by a famous face, it will be fake and the famous face just an AI-created illusion.
Don’t be tempted. You could lose your cash – the only easy money is made by the thieves.
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Try these simple tips and fixes for Saga’s crossword, sudoku and codeword puzzles.
With the start of the new financial year on 6 April, our money expert explains the changes to your pension, benefits and taxes.
