A Reader asks... Paul Lewis answers your questions
Paul Lewis answers readers' questions about refunds, staying safe from scam calls, inheritance tax, and more.
"I’ve Been Refused A Refund — What Can I Do?"
Q: Tony writes: “I bought my wife a pair of ‘in-ear’ headphones for Christmas, but she discovered none of the three different-sized earpieces would stay in her ear. The retailer refused to exchange them as they had been ‘used’.”
Paul: Tony, the shop would not exchange them on the grounds they could not be resold. But you were not returning them under its voluntary policy. You were taking them back as they were not fit for purpose. They are designed to stay in the ears, but they would not — and of course, your wife had to try them! In my view, you have a right to a refund. Email the chief executive — go to ceoemail.com to find out who that is — citing the Consumer Rights Act 2015. Say you were sold an item that wasn’t fit for your purpose and you expect a full refund. Be polite but firm. It helps if you take the first steps towards legal action through moneyclaimonline.gov.uk. Fill in the forms up to where you have to pay a fee. Don’t pay it, but take a screengrab to send with your email.
"Protecting My Assets — Is It A Scam?"
Q: Susan emailed: “Today I received a cold call from a firm that offered to protect my financial assets from depredation by my local authority to cover the potential costs of personal care in old age. I have seen glowing reviews of this company online. Still, I am suspicious. Can you advise?”
Paul: Susan is right to be suspicious. If you embark on any scheme with the intention of avoiding the local authority means-test (imposed if you need to go into a care home), the action you take can be ignored by the local council as if you had not done it. So you will pay fees to the firm and also pay for your care. But most people never go into a care home. And if you do, the value of your home is not used to pay for care if you have a partner or relative over 60 living in it. So even if these plans worked, they “protect” you against something that will probably never happen. Their business is to charge you fees, and some are out-and-out scams. Put the phone down. Stay safe.
"Inheritance Tax — How Much Can I Give Away?"
Q: Rosemary writes: “We would like to help our son’s family with a deposit for a house. I’ve read that £3,000 is exempt. Can I give £3,000 to my son and the same amount to my daughter-in-law?”
Paul: You are referring to the annual exemption from Inheritance Tax on up to £3,000 of gifts. You can give up to £3,000 total during each tax year and it will be ignored for Inheritance Tax when you die. So that gift to your son would use up one year’s allowance. However, if you gave nothing last year you can bring forward that year’s allowance too, so you could give £6,000. The allowance is personal, so if your husband gave nothing last year, then he could give the same — a total of £12,000. In addition, you can give up to £250 each to any number of individuals and they will not count, but not to anyone who benefited from the £3,000. Remember two things: if you live at least seven years, then any gifts made before that are left out of Inheritance Tax. The first £325,000 you leave is free of tax, and adds up to £175,000 for the value of a family home you leave to a direct descendant — a total of £500,000. Only above that will IT be due.
"Is It Possible To Get A Refund If The Shop Has Gone Bust?"
Q: Cynthia bought a knife sharpener from a branch of Debenhams in July. She asked if it sharpened serrated knives and was told it did. However, when she got it home she found it did not. She wrote to Debenhams but her letters were ignored and now the business is going into liquidation. She writes: “I don’t know whether I have any rights at all, but feel very sore about the whole thing!”
Paul: I bet you do, Cynthia! If Debenhams was in business and you returned the item quickly, I would be confident you would get a refund or an exchange. The sharpener was misdescribed to you by the salesperson and you had a clear right to a full refund. However, you are now one of the thousands of creditors of the company, so I don’t hold out any hope you will get your refund from the administrators, though it is worth registering your claim with them via email at casedebenhamsInterestedparties @frpadvisory.com You paid by debit card, so you might have claimed a refund through your bank under a procedure called a chargeback. Sadly it’s too late, as that must normally be claimed within 120 days.
"Why Has NS&I Slashed Its Rates?"
Q: Michael writes: “Last year I invested into NS&I Income Bonds paying 1.15% gross. But I notice the rate payable is now just 0.01%. I wondered why?”
Paul: Good question, Michael! National Savings & Investments is a branch of the Government and the money we save with it — around £200 billion in total — is used to reduce the national debt. NS&I savers are in fact lending to the Treasury. Each year the Government gives NS&I a target amount to raise. At the start of the Covid crisis, it increased the target for 2020/21 from £6 billion to £35 billion. NS&I kept its rates high to attract new money. Savers poured in billions, especially into those 1.15% Income Bonds. The result was that by the end of the second quarter of the year, NS&I had already exceeded its target for the whole year. So it slashed the rates and although a great deal of money was then taken out, it hopes to meet its target over the year as a whole. NS&I rates are now effectively zero, so there is some hope they might rise a little when it gets a new target for 2021/22. But nothing is predictable.
QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com
Paul cannot answer you personally, but he may reflect them in his RT column.