Money blog: Never pay income tax again - one European country's offer to women (2025)

Work and Pensions Secretary Liz Kendall has announced a raft of welfare reforms and benefits cuts.

This includes changes to Personal Independence Payments (PIP) that the government says will save £5bn by 2030.

Here's what the minister said and what it means for you.

Work

The government will merge jobseeker's allowance and employment and support allowance, Kendell said.

It will alsoscrap the work capability assessment for universal credit in 2028, whichKendall described as "complex" and "time-consuming" for people trying to apply.

A "right to try" initiative will be introduced so people who want to attempt to get back into work won't lose their benefits while they do.

The minister pledged £1bn a year for employment support, while announcing a consultation on whether the health top-up to universal credit should be delayed for those aged under 22, with the savings spent on work support and training opportunities.

The health top-up refers to extra cash given to those with health conditions or disabilities that limit their ability to work.

Universal Credit

The standard universal credit allowance will rise by £775 in 2029-30.

The government will "rebalance the payments in universal credit from April next year, holding the value of the health top-up fixed in cash terms for existing claimants and reducing it for new claimants".

Kendell said there will be "an additional premium for people with severe lifelong conditions".

People with the most "severe disabilities and health conditions" will not need to be reassessed on their suitability to work, she said.

PIP

Personal Independence Payments will not be frozen after backlash from Labour MPs, but peoplewill need to score at least four points in one activity to qualify.

PIP assessments use a point system to ascertain how difficult an applicant finds certain activities, such as eating, washing and using the toilet, in order to determine the level of support for which they qualify.

Points range from 0 to six, eight or 12 depending on the activity. For example, four points would be awarded to someone in the toiletry needs category if they needed help to get on or off the toilet.

The Office for National Statistics (ONS) is making major changes to how it gathers data that shapes decisions on wages, benefits, and public spending.

One of the biggest shifts involves how inflation is measured, which is changing today.

The Consumer Price Index (CPI), which tracks the cost of everyday essentials like food, energy, and transport, is being updated with a new system that aims to capture price changes more accurately.

This matters because inflation figures influence the Bank of England's decisions on interest rates, which in turn affect the cost of borrowing, savings, and even rent.

For workers, inflation also plays a role in wage negotiations. This is because when prices rise, there's often pressure on employers and the government to increase salaries, pensions, and benefits.

The ONS will continue sending researchers to shops to check prices and speak to retailers, but from this month, a new digital system will speed up how the data is processed.

It's also testing a new method using real checkout data from supermarkets. Instead of just recording shelf prices, it will track what people actually pay, including discounts from loyalty schemes like Clubcard and Nectar.

This should give a more accurate picture of real spending habits, with full rollout expected by 2026.

The change has been brought about over concerns the previous method measured price changes but failed to capture how consumers changed what they buy as a result.

Take the example of butter, which has gone up in price by 18% in the past year.

That increase was reflected in the CPI, influencing the overall inflation figure. However, many consumers will have switched to a dairy spread or margarine rather than keep paying for the more expensive butter.

While this should improve inflation accuracy, tracking individual product prices may become harder.

Other changes are being introduced due to concerns over reliability, including job figures, GDP estimates and migration data.

Read more about them here...

The eligibility criteria for disability benefits will be narrowed in a bid to slash £5bn from the welfare bill, Liz Kendall has announced.

Speaking in the Commons, the work and pensions secretary said the number of new people claiming personal independence payment (PIP) is "not sustainable".

She said the government will not freeze PIP -as reports had previously suggested- but instead make it harder to qualify for the daily living allowance component from November 2026.

Personal Independence Payment (PIP) is money for people who have extra care needs or mobility needs as a result of a disability.

People who claim it are awarded points depending on their ability to do certain activities, like washing and preparing food, and this influences how much they will receive.

Ms Kendall said that from November 2026, people will need to score a minimum of four points in at least one activity to qualify for the daily living element of PIP.

Currently, the standard rate is given if people score between eight and 11 points overall, while the enhanced rate applies from 12 points.

The changes will not affect the mobility component, Ms Kendall said.

Read our full report here...

Brokers are divided over a new mortgage scheme targeting buyers with small deposits and no access to family help.

Residential lender Gen H has launched New Build Boost, which allows buyers to take out an 80% loan-to-value ratio with a 5% deposit.

Gen H says it will close the gap with a 15% interest-free boost supported by the house builder.

"This looks to be a great initiative from Gen H, removing the interest payments issue many Help-to-Buy borrowers complained about after those initial five years," Justin Moy, managing director at EHF Mortgages, told Newspage.

If property prices remain flat for the next few years, this could be a "great opportunity", he said, but buyers need to remember the loan will cost more in the long run if prices rise.

Other brokers were less impressed. Ranald Mitchell, director at Charwin Mortgages, called the scheme "Help to Buy 2.0 - a repackaged trap".

"A lower 15% equity loan doesn't fix the real issue: getting out," he said.

"Buyers will step into shiny new homes, only to find limited mortgage options down the line, leaving them stuck.

"Homeownership should be simple - if you can't afford it, don’t buy it. Instead, we're seeing complex schemes that lure people in but offer no easy exit.

"We've been here before with Help to Buy and have we learned nothing."

The National Lottery is hosting its "Open Week" - which offers ticket holdersunlimited free entry and cheap tickets to hundreds of lottery-funded properties, castles and museums across the UK.

Between 15-23 March, anyone who has bought a ticket can visit as many of the Open Week venues as they like.

There are some 500 venues taking part.

To get in, you must present one lottery ticket per person at the entrance of a participating venue.

The cheapest ticket available at present is the "Prize Ball Red Instant Win" game for 25p, available via the National Lottery app - which is free.

If you've been reading the Money blog this month, you might have caught two features looking into the UK's falling fertility rate and the financial challenges facing new mums returning to work.

Mothers reported soaring childcare costs were taking a huge financial toll, while experts predicted dire economic consequences for Britain if people continued to face disincentives to have children.

Now, one European nation is taking a radical approach to both problems.

Mothers in Hungary who have two or three children will be exempt from paying income tax for life.

Meanwhile, women with one child will be exempt until they turn 30.

"We are opening a new chapter in the history of the Hungarian economy. We are creating the world's first family-centred economy," Viktor Orban, the country's prime minister, said.

It's an expansion of an existing scheme that makes mothers of four or more children completely tax-exempt.

Hungary had a fertility rate of 1.5 in 2022, according to the latest World Bank data available. By comparison, the UK had a rate of 1.6.

A rate of 2.1 is thought to be required to sustain a nation's population level.

To read more on these topics, tap the links below...

BySarah Taaffe-Maguire, business and economics reporter

As the dollar continued to fall, the pound kept on rising, briefly hitting a more than four-monthhigh at points this morning.

At about 8.30am and 10am, £1 bought $1.30, a high last seen on the election of Donald Trump on 5 November.

A weaker dollar shows reduced confidence in the US economy as tariff fears became a reality, rather than being used as a mere bargaining tool with trade partners.

The new rate means consumers using the pound can buy dollar-priced goods more cheaply than in recent weeks and months.

It's good news for anyone going on holiday to America, though the $1.30 exchange is far below the $1.34 seen in September.

Manchester United fans have expressed outrage and disappointment after the club increased the price of most season tickets by 5%.

The club said the hike - from which under-16s were exempt - was necessary to stay financially stable, but it has been branded "ridiculous" and "greedy" by some fans.

Season ticket holders will pay an extra £2.50 per game on average.

"For several months we have argued long and hard that the club need to look at the big picture and freeze ticket prices for next season," said The Manchester United Supporters Trust.

"Other clubs have done that already and at United it would have sent a powerful message about the need for everyone to pull together to get the club out of the very difficult position it finds itself in."

Its the third year in a row in which season ticket prices have risen.

Fans on social media have been protesting the decision, with one calling Manchester United a "greedy club".

Another wrote on X: "Our owners spoke about the importance of fan engagement, then announced these ridiculous ticket increases after zero consultation. Utterly despicable."

But some more readily accepted the price rise, with one X user writing: "Not as bad as I was expecting to be fair."

Omar Berrada, chief executive of Manchester United, said: "We appreciate the loyal and patient support of our fans, and particularly our season ticket holders who represent the core of our match-going support base.

"We understand the importance of their backing for the team and have worked hard to come up with a pricing package that is fair and reasonable."

By Sarah Taaffe-Maguire, business and economics reporter

For the first time ever, VR headsets are being used in the official calculation of price rises.

It comes as spending on the tech has grown and is expected to continue growing.

A basket of more than 700 goods is used by the Office for National Statistics (ONS) to calculate the inflation rate. Each year the list is refreshed to reflect changing buying habits and ensure the figure is accurate.

It means that what's in and what's out can tell us about purchasing trends.

Oven-ready gammon joints are out while pulled pork is in, highlighting the move to convenience foods.

Increased home fitness gear spending is apparent with the addition of yoga mats to the basket, while men's sliders or pool sandals show changes in the footwear market.

As the move to online news consumption continues apace, local newspaper adverts have also been removed.

The government says it will freeze thousands ofgovernment issued credit cards accounting for hundreds ofmillions of pounds this week.

Almost all of around 20,000 procurement cards will be frozen after spending on government cards rose from £155m in 2020-21 to £675m in 2024-25, the Cabinet Office said.

It wants to cut the number of cards by at least 50%, with frozen ones only reallocated to those who can justify a need for them.

"It's not right that hundreds of millions of pounds are spent on government credit cards each year without high levels of scrutiny or challenge," Cabinet Office minister Pat McFadden said.

"Only officials for whom it is absolutely essential should have a card."

A minority of staff, including diplomats working in crisis areas, will be spared.

Bloomberg reports new limits will be introduced, with any spend over £500 requiring senior approval.