New proposals to crack down on subscription traps, have been unveiled by the Department for Business and Trade as the government launches a consultation on measures to make it easier for consumers to get a refund or cancel unwanted subscriptions.

“Subscription traps” are instances where consumers are frequently misled into signing up for a subscription through a “free trial” or reduced price offer. In some cases, if the consumer does not cancel the trial within a set amount of time, they are often automatically transferred to a costly subscription payment plan.

It comes as new figures reveal consumers are spending billions of pounds each year on unwanted subscriptions due to unclear terms and conditions and complicated cancellation routes. Nearly 10 million of 155 million active subscriptions in the UK are unwanted, costing consumers £1.6 billion a year.

Subscriptions can be for anything from magazines to beauty boxes, with many subscriptions having complicated or inconvenient cancellation processes such as phone lines with long waits and restrictive opening hours that can leave consumers feeling trapped.

The consultation sets out proposals to make the refunds and cancellation processes simpler, with a requirement on retailers for greater transparency on their subscription programmes in a way that is proportionate to balance consumer rights without placing unnecessary burdens on businesses.

Determining an acceptable level of pension income for retirement depends on individual circumstances, including lifestyle expectations, health, and financial commitments. However, several guidelines and studies provide benchmarks to assist in planning.

Retirement Living Standards

The Pensions and Lifetime Savings Association (PLSA) outlines three retirement living standards in the UK:

• Minimum Lifestyle: Covers essential needs with some social activities. As of 2024, a single person requires £14,400 annually, while a couple needs £22,400.
• Moderate Lifestyle: Offers more financial flexibility, including short-haul holidays and increased leisure activities. This standard suggests £31,300 per year for singles and £43,100 for couples.
• Comfortable Lifestyle: Allows for luxuries such as long-haul travel and a new car every five years. The recommended income is £43,100 annually for singles and £59,000 for couples.

Average Retirement Incomes

According to government data, the average weekly income for pensioners in 2023 was £267, equating to approximately £13,884 per year. This figure varies regionally, with higher living costs in areas like London potentially reducing disposable income.

Gender Disparities

Studies indicate a gender gap in retirement incomes. Women are projected to receive an average of £12,000 annually, compared to £17,000 for men. This 33% disparity highlights the need for targeted financial planning, especially for women.

Replacement Ratio

A common measure is the replacement ratio, which is the percentage of pre-retirement income needed to maintain lifestyle post-retirement. Typically, replacing 60% to 80% of pre-retirement income is recommended. However, the average retirement income often falls short of this benchmark, underscoring the importance of personalized retirement planning.

State Pension

The UK State Pension provides a foundational income. As of April 2024, the full new State Pension is £221.20 per week, totalling £11,502.40 annually. Eligibility depends on an individual’s National Insurance record, with 35 qualifying years required for the full amount.

Planning Considerations

To achieve a desired retirement income:

• Assess Lifestyle Needs: Determine the lifestyle you wish to maintain and estimate associated costs.
• Calculate Required Income: Use tools like the MoneyHelper pension calculator to estimate the income needed to support your desired lifestyle.
• Review Pension Savings: Evaluate your current pension savings and contributions to ensure they align with your retirement goals.
• Seek Professional Advice: Consulting a financial adviser can provide personalized strategies to optimize retirement income.

In summary, while benchmarks offer general guidance, an acceptable pension income is highly individual. Regularly reviewing and adjusting your retirement plan is essential to meet your specific needs and aspirations.

HMRC has been busy promoting the benefits of using its app. A new advertising campaign launched by HMRC is targeted at 18 to 34 year olds and showcases how the app can help them with their tax affairs and finances.

HMRC’s free tax app is available to download from the App Store for iOS and from the Google Play Store for Android. The latest version of the app includes updated functionality.

HMRC has recently reported that more than 1.7 million people are already using the HMRC app every month. Users of the app can access services such as making a Child Benefit claim, finding their National Insurance number and a tax calculator to estimate their take-home pay.

Between July and September 2024, 711,382 new users downloaded the app, and there was a 39% increase in app activity compared to the same period last year – up from 20.93 million sessions to 29.22 million. And nearly £300 million has been paid to HMRC via the app so far this financial year.

HMRC’s Director General for Customer Services, said:

‘One of the main priorities for HMRC is improving its customer services and this incredibly useful and user-friendly app is a great example of how tax can be made much easier for people.

Whether you’re a student looking for your National Insurance number or a new parent wanting to claim Child Benefit, the HMRC app has a range of tools for you, at your fingertips. I urge everyone to download it today.’

If you believe you have overpaid tax to HMRC, you can typically claim a tax refund for the excess amount. The process for making a claim varies depending on factors such as whether you submit a self-assessment return and how much time has passed since the tax was overpaid.

According to HMRC you may be able to claim a refund if you have paid too much tax on:

• pay from a job
• job expenses such as working from home, fuel, work clothing or tools
• a pension
• a self-assessment tax return
• a redundancy payment
• UK income if you live abroad
• interest from savings or payment protection insurance (PPI)
• income from a life or pension annuity
• foreign income
• UK income earned before leaving the UK

An online tool to help assist in claiming a tax refund is available at https://www.gov.uk/claim-tax-refund/y

Claims can usually be backdated for up to four years after the end of the tax year. This means that claims can still be made for tax refunds dating back as far as the 2020-21 tax year which ended on 5 April 2021. The deadline for making claims for the 2020-21 tax year is 5 April 2025.

If you need any assistance in making a claim for overpaid tax, we are here to help.

The limit on Income Tax reliefs has applied since 6 April 2013. This measure was the first time a limitation to existing reliefs had been introduced.

The cap is set at the greater of 25% of income or £50,000. This limit applies to the total amount of relevant reliefs claimed in a tax year and is calculated individually for each tax year in which relief is claimed.

The main reliefs subject to this limit are:

• trade loss relief against general income and early trade losses relief claimed on the self-employment, Lloyd’s underwriters or partnership pages;
• property loss relief (relating to capital allowances or agricultural expenses) claimed on the UK property or foreign pages;
• post-cessation trade relief, post-cessation property relief, employment loss relief, former employees deduction for liabilities, losses on deeply discounted securities and strips of government securities claimed on the additional information pages;
• share loss relief, unless claimed on Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) shares claimed on the capital gains summary pages; and
• qualifying loan interest.

The limit applies in addition to other provisions that restrict the amount of relief that can be used to reduce total taxable income for the year. The limit does not affect the amount of trading losses which may be claimed against capital gains.

HMRC’s guidance explains, with supporting examples, how the limit is calculated, the measure of income used to calculate the limit, which reliefs are subject to the limit, and how different circumstances are treated. As the 2024-25 tax year begins to draw to a close, taxpayers should seek to ensure that wherever possible, they structure their finances to avoid the cap.