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Martin Lewis urges Chancellor to tackle consumer issues as March Budget nears

Martin Lewis has written to Chancellor Jeremy Hunt to highlight several areas of concern (Jonathan Brady/PA)
Martin Lewis has written to Chancellor Jeremy Hunt to highlight several areas of concern (Jonathan Brady/PA)

Martin Lewis is urging the Chancellor to fix some key consumer issues, including rules around child benefit which “unfairly” penalise some families with a single income or one dominant earner.

The founder of MoneySavingExpert.com and the Money and Mental Health Policy Institute has written to Chancellor Jeremy Hunt ahead of the March 6 Budget, highlighting several areas of concern affecting parents, first-time buyers and mobile and broadband customers, among others.

Mr Hunt appeared as a guest on ITV’s Martin Lewis Money Show earlier in January and when Mr Lewis pushed on some key campaigning points, the Chancellor’s response was to ask Mr Lewis to write to him.

Among the concerns, Mr Lewis highlighted the high-income child benefit charge. The tax charge is triggered when one parent in a household claiming child benefit has taxable income of £50,000 or more.

The letter from Mr Lewis says: “The high-income child benefit charge unfairly penalises single-income families.

“This was by far the biggest single topic the public asked me to raise with you. In our interview, I read a question from Alan which highlights the unfairness in the way child benefit gains start being withdrawn depending solely on one parent/guardian’s income hitting £50,000 (and wiped at £60,000).

“‘My son’s partner tragically died 34 days after giving birth to twins. My son has taken a new job that now pays him £60,000 and is struggling with the cost-of-living and mortgage repayments after the loss of a second income. HMRC has asked him to repay the child benefit. This seems grossly unfair that a couple can bring in nearly £100,000 but a single breadwinner loses out once they earn more than half of this. Are there any plans to change this?’.

“I can see few people arguing that it is right that Alan’s son’s family should lose their child benefit even though their total family income is lower.

“I was very pleased that you accepted there is an ‘unfairness’ in the structure that penalises single-parent families, single-earner families, and families where there is one dominant earner.”

“While I agree, as you pointed out, that there are many structural problems in the tax system, this one is exacerbated by the fact the £50,000 (and £60,000) thresholds have been frozen since 2013.”

The letter also urges Mr Hunt to cancel the Lifetime Isa (Lisa) withdrawal penalty for first-time buyers.

It says: “You can only use a Lisa on a qualifying property, which is one worth up to £450,000.

“That £450,000 limit has remained frozen since the Lisa launched in 2017. Average house prices have risen more than 30% in that time.”

Housing Market Stock
Martin Lewis said in many London boroughs a first-time buyer property typically costs more than £450,000 (Yui Mok/PA)

The letter points out that in many London boroughs, a first-time buyer property typically costs more than £450,000.

It says: “To withdraw for any purpose other than buying a qualifying home (or from aged 60), you pay a 25% penalty.

“For many, who have saved in a Lisa and now find themselves priced out as the home being bought is above the threshold, they have to pay the 25% penalty to withdraw their money.”

In the letter Mr Lewis also calls for action to tackle mid-contract, above-inflation broadband and mobile price hikes and for regulation around buy now, pay later firms to be brought in as soon as possible.

A Treasury spokesperson said: “Martin is a fantastic champion of consumer rights and, as ever, we thank him for his suggestions following the Chancellor’s appearance on the Martin Lewis Money Show.

“The cost of living is a concern for many, but our decisive action helped to more than halve inflation last year while putting in place one of the largest support packages anywhere in Europe.

“We are also supporting low-paid workers with a record increase in the National Living Wage and cutting taxes so that people can keep more of what they earn.”