THOUSANDS of parents are paying more than they need to for baby milk because of a lack of competition in the market, a government watchdog has warned.

At the moment there are two dominant baby formula companies – Danone and Nestle – who make up 85% of all sales.

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As a result, there is little incentive for these manufacturers to compete to offer the best price, the Competition and Markets Authority (CMA) warned.

The news comes after the boss of Iceland Richard Walker last year hit out at “exploitation” of new parents and called for action to be taken in the industry.

Over the past few years it has become more expensive to manufacture infant formula and these costs have been passed on directly to customers.

Parents often choose baby formula for the first time when they are in vulnerable situations such as in hospital straight after birth.

Often they make the choice when they do not have access to clear, accurate and impartial information, the watchdog warned.

Parents are also often under a lot of pressure to do what is best for their baby.

As a result, they can often choose a more expensive product as they assume that a higher price will mean it is better quality.

This is not true as the NHS advises that “it does not matter what brand you choose, they’ll all meet your baby’s nutritional needs, regardless of price”.

Parents also often listen to advice from friends and family when choosing a formula, which means the brand’s reputation plays a much larger role in the decision making.

Sarah Cardell, chief executive of the CMA, said it is concerned that companies “don’t compete strongly on price”.

She added: “We have identified options for change, but now want to work closely with governments in all parts of the UK, as well as other stakeholders, as we develop our final recommendations.”

The CMA has set out several potential options which could help to improve the industry and reduce the cost for parents.

It wants to provide new parents with clear, accurate and impartial information, for example in hospitals.

The CMA may also allow companies to publicise their prices and price reductions, which they are currently not allowed to do.

It also wants to strengthen labelling and advertising rules as branding is a large part of the reason that parents choose a certain product.

This could be done by requiring manufacturers to use entirely different branding for their infant and follow-on formula.

The CMA may also implement stricter rules around certain messages on packaging.

In the long term the government may also be forced to take more significant action to bring down costs, such as introducing price caps.

The CMA will publish a final report on baby formula in February 2025.

What help is there for parents?

If you receive certain benefits and are pregnant or have at least one child under the age of four then you can apply for Healthy Start vouchers.

You will get:

• £4.25 each week of your pregnancy
• £8.50 each week for children from birth to one year old
• £4.25 each week for children between one and four years old

The money will stop after your child’s fourth birthday or if you no longer receive benefits.

If you are eligible you will be sent a Healthy Start card with money on it that you can use in some UK shops.

The money will be added onto this card every four weeks.

You can use the card to buy:

• Plain liquid cow’s milk
• Fresh, frozen and tinned fruit and vegetables
• Fresh, dried and tinned pulses
• Infant formula milk based on cow’s milk

To be eligible for the scheme you must be receiving one of the following benefits:

• Income support
• Income-based jobseeker’s allowance
• Child tax credit if your family’s annual income is £16,190 or less, and not getting working tax credit
• Universal credit if your family’s monthly earned income is £408 or less from employment
• Pension credit

You can apply for the scheme on the NHS website.

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Good morning and welcome to your Morning Briefing for Friday 8 November 2024. To get this in your inbox every morning click here.

Firms in the dark on commercial pensions dashboards delivery date

Firms seeking to operate commercial pensions dashboards services (PDS) have no timescale when this will happen despite the Financial Conduct Authority publishing rules they must follow when designing and operating them.

FCA set out rules for pensions dashboards service firms in a policy statement published yesterday (7 Nov.)

Rachel Vahey, head of public policy at AJ Bell, said the lack of timescale is a “huge let down for customers”.

Closing the advice gap

How do we close the advice gap?

That’s the million-dollar question I’ve heard debated time and again since I joined Money Marketing.

The consensus is that artificial intelligence and the introduction of new technology will free up advisers’ time and enable them to take on and serve more clients.

But could it be the banks that hold the key to closing the gap?

Quote Of The Day

There are some more bullish voices out there, including Goldman Sachs who have forecast UK base rate to fall to just 2.75% by next Autumn. The fact the decision to cut rates was almost unanimous will put some powder in this argument.

-Laith Khalaf, head of investment analysis at AJ Bell, comments on latest interest rate decision from the Bank of England.

In Other News

The Pension Protection Fund (PPF) has published its fifth Responsible Investment report, which reinforces its commitment to promoting sustainability in the pensions industry and demonstrates the power industry engagement and collaboration across its asset managers, portfolio companies, industry bodies and peers has had over the last 12 months.

The annual report summarises the stewardship and governance activities carried out by the PPF that have not only driven greater participation and engagement industry wide, but also have improved reporting, risk analysis, transparency and driving positive change.

Barry Kenneth, chief investment officer at the PPF said: “The last 12 months has been a period of evolution and engagement, and this report outlines our continued commitment to align with the Stewardship Code, showcasing the steps we have taken and measures we have advanced to protect and drive value across our portfolio.

Isio, a provider of pensions and employee benefits consultancy, has announced the launch of its new individual service designed to streamline support for NHS employees affected by the McCloud pensions tax roll-back.

The McCloud remedy addresses age discrimination in the 2015 public service pension reforms. It involves rolling back the 2015 scheme benefits into the previous final salary schemes for affected public sector members.

But many senior NHS staff will have to also revisit up to seven years of self-assessment tax forms by 31 January 2025 (or 3 months after being notified if later).

The new service will help these NHS Pension Scheme members, who will receive a Remediable Pension Savings Statement (RPSS), to collect the required data and submit it to HMRC.

Isio’s service manages the entire process, allowing members to easily claim tax refunds where appropriate (and in some cases pay additional tax charges). The service is to be also available for senior police employees affected by the same issue.

Did You See?

Greg Neall, chartered financial planner at Wake Up Your Wealth, chides journalists, experts, and commentators over their “scaremongering” articles in the lead up to the autumn Budget.

He writes: It’s impossible to count the number of headlines written over the last few months declaring the 25% tax-free pension lump sum was in danger of being scrapped in last week’s Budget to boost clicks and comments.

Anyone with a working brain and the slightest bit of political nous could see there was no way the chancellor would do something so politically suicidal, especially after the Winter Fuel Allowance fiasco. Shame on those claiming it was ever likely.

There was also a glut of poorly-researched pieces on how the lump sum allowance might come down to £100,000.

Read the full article here.

THOUSANDS of hard-up households could get £115 free cash paid directly into their bank accounts before Christmas.

Struggling households can claim the money through the government’s Household Support Fund (HSF) now.

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The HSF was extended for the sixth time from October 1, meaning households can claim help from a fresh £421million pot of funding.

Councils across the country have received a portion of the cash to distribute to those in need.

But there is a postcode lottery to determine who qualifies as each local authority can set its own eligibility criteria.

Despite this if you have a limited amount of money or savings in the bank, or are deemed to be vulnerable or on benefits, you will probably qualify for help.

Money will either be given to you as a direct cash transfer, shopping vouchers, energy support or in another form.

The amount handed out varies and the local council will determine this.

In York people of working age who receive Council Tax Support can apply to receive a payment of £115 directly into their bank account.

Those eligible for the payment will receive a letter this month with the instructions to register.

Those who need assistance with food, energy or water bills who do not receive Council Tax Support or are over pension age can also apply for a discretionary payment.

If you apply for a discretionary payment you will need to complete a means-tested assessment including personal financial information.

If you don’t live in York you should check with your local authority to see what support it is offering.

Rotherham Council is now offering struggling families £250 grants to fight the cost-of-living increase.

Those living in Birmingham can claim £200 to help with soaring winter energy payments.

Meanwhile, Wakefield Council is offering support to pensioners who will miss out on the winter fuel payment this year.

What is the Household Support Fund?

The Household Support Fund was introduced in October 2021 by The Department for Work and Pensions (DWP) to support households most in need.

The funding is distributed between councils, and they are then responsible for dishing out the cash on an application basis.

For example, Birmingham City Council have announced they will hand out free £200 cost of living payments to help its residents cope this winter, as one of its approaches to the fresh fund.

How do I apply?

In order to be eligible for help, you may have to be in receipt of benefits or provide proof of being in financial difficulty.

Each council has a different application process – so you’ll have to ask your local authority or find out via your council’s website.

Not all councils have decided how they will distribute the cash yet, so you may have to wait to get all the information.

To find out how to contact your local authority, use the gov.uk authority tool checker.

In the last round of funding, some residents received their share automatically, while others had to apply.

For example, Haringey London Council is issuing automatic payments to eligible residents, as well as a support fund which can be applied to.

It is also issuing payments to schools, which means they can distribute free school vouchers.

In previous years, other authorities have offered cost of living vouchers – such as Coventry City Council.

This has included a Community Supermarket scheme, where all Coventry residents could pay £5 weekly and receive a basket of food worth up to £25.

Residents of Effingham, near Guildford, have been able to claim up to £300 free cash to help with the cost of living crisis.

Surrey council previously poured £300,000 into food banks, where photo ID and proof of address is required, but no referral needed.

While some schemes, such as the Surrey Crisis Fund, which can offer up to £100 to those immediately in need, are reserved for those who also rely on other means-tested benefits.

How has the Household Support Fund evolved?

The Household Support Fund was first launched in October 2021 to help Brits pay their way through winter amid the cost of living crisis.

Councils up and down the country got a slice of the £421million funding available to dish out to Brits in need.

It was then extended in the 2022 Spring Budget and for a second time in October 2022 to help those on the lowest incomes with the rising cost of living.

The DWP then confirmed a third extension of the scheme through to March 31, 2024.

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Former chancellor Jeremy Hunt extended the HSF for the fourth time while delivering his Spring Budget on March 6, 2024.

In September 2024, the Government announced a fifth extension.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

How do we close the advice gap?

That’s the million-dollar question I’ve heard debated time and again since I joined Money Marketing.

The consensus is that artificial intelligence and the introduction of new technology will free up advisers’ time and enable them to take on and serve more clients.

But could it be the banks that hold the key to closing the gap?

After the Retail Distribution Review was introduced in 2012, most UK banks stopped offering financial advice to all but their wealthiest clients. This was mainly due to the higher risks and costs now involved.

If this means that more people can get access to financial advice, it’s not necessarily a bad thing, says Ball

Their departure created a big opportunity for Hargreaves Lansdown, St James’s Place and other wealth managers. But the tide could now be turning.

In August, HSBC announced plans to double its assets under management to £100bn and become one of the top-five wealth managers in the UK in the next five years.

“In order to fulfil this vision, we are growing our national team of wealth advisers and relationship managers at scale,” it said.

But it’s not just HSBC. Barclays and Lloyds have also made moves back into wealth management. And, according to two experts, that can only be a good thing.

Mass-affluent market

Many advice firms no longer touch anyone with less than £250,000 in assets because it is not profitable for them to do so.

So, could banks help solve the problem? Hoxton Wealth chief executive Chris Ball believes so.

We should embrace the banks with open arms if we really want to close the advice gap

“These banks are focusing on the ‘mass affluent’ market — as in people with £75,000 to £250,000 in deposits,” he says. “There’s a massive opportunity here, because this group of clients need advice nearly as much as the ultra-high-net-worth individuals do.”

NextWealth managing director Heather Hopkins agrees.

“NextWealth research shows that the average portfolio size for financial advice firms is over £400,000. There is a huge, untapped market out there,” she says.

“One of the challenges we face as a nation is that people don’t seek out advice. The more firms that shout about the value and availability of advice, the more people will seek it out.”

The resurgence of the banks may put some wealth managers’ noses out of joint, but Hopkins says they needn’t worry.

Many advice firms no longer touch anyone with less than £250,000 in assets

“Demand for advice far outstrips supply, so I don’t see banks competing with traditional wealth managers.”

Ball agrees that banks do not pose a threat.

“If it means that more people can get access to financial advice because the banks make it cheaper to do so, I don’t necessarily see that as a bad thing.

“As a profession, we should really focus on the positives of what we are doing and not the negatives of what the banks are doing.”

Independence

Ball thinks the banks will have tied products, and “a lot of it will be around product sales rather than giving proper, holistic financial planning”.

The resurgence of the banks may put some wealth managers’ noses out of joint, but Hopkins says they needn’t worry

Therefore, his message to wealth managers is simple: “Keep doing what you’re doing — giving great, independent financial advice. That independence bit, I think, will be key.”

The Lang Cat consulting director Mike Barrett agrees.

“For these types of services, advice is rarely the product. It’s about the banks wanting to sell more of their own funds.

“As a consequence, the vast majority of the advice profession should have nothing to fear from these offerings.”

When I spoke to the FCA’s Nick Hulme, head of advisers, wealth and pensions, he told me the regulator was open to banks entering the sector.

“Financial advisers can do their bit — they are already active in the market and very knowledgeable.

It’s not just HSBC — Barclays and Lloyds have also made moves back into wealth management

“If there are other players that are going to come in to help reduce that advice gap, which this country really needs, then we’re agnostic to who that is.”

Hulme added that the regulator was “absolutely on board and behind anyone with the right intentions and motives”.

As for an old friend we haven’t seen for a while, we should embrace the banks with open arms if we really want to close the advice gap.

Dan Cooper is news editor

This article featured in the November 2024 edition of Money Marketing. 

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GETTING a foot on the property ladder can often feel like a pipe dream for many, but there are many schemes available to make it easier.

A shared ownership scheme can help you to buy a home of your own even if you think you cannot save for a deposit or keep up with mortgage payments.

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Instead, you can buy a share of the property and pay rent to a landlord on the rest.

You can apply if your household income is £90,000 a year or less in London or £80,000 a year or less in the rest of the UK.

More than 103,000 shared ownership homes have been built and sold in the last decade, according to the National Housing Federation.

However, experts have warned that shared ownership comes with several hidden dangers such as high service charges, short leases and even the risk of being evicted.

Here, we explain the positives and negatives of shared ownership so you can decide if it is right for you.

Benefits

Low deposit

One of the big advantages of shared ownership is that you only need a small deposit.

This is because by owning a share of a property rather than the whole thing you can apply for a smaller mortgage.

For example, if you want to buy a property worth £250,000 then you would need a nest egg of £25,000 to put down a 10% deposit.

But if you buy a 45% share in a shared ownership property worth £250,000 then you would only need to save £11,250 for a deposit.

Some shared ownership properties will also let you put down a 5% deposit.

For the same house this would mean saving just £5,625.

Do not need to be able to afford the whole house

Another benefit of shared ownership is that you do not need to be able to afford the full market value of a property you are interested in.

Instead, you buy a share of the total property, which is usually between 25% and 75%.

But you can buy a share worth as little as 10% on some homes.

For example, if you want to buy a 10% share of a property worth £300,000 then you would need to take out a mortgage for just £30,000.

The smaller your mortgage the lower your monthly repayments will be.

Increase the proportion you own over time

You can increase the amount of the property you own up to 100% through a process known as “staircasing”.

You may want to do this if your circumstances change, for example if you get a pay rise or are given some money from a friend or relative.

For example, you could start by buying a house with a 25% share then staircase to 50%, then 75% and finally buy the whole home.

Usually you can buy shares of 10% or more at any time but this will depend on your lease.

Some older leases may only allow you to staircase by 25% or more but newer leases may let you buy shares for as low as 5%.

Every time you staircase the housing association will carry out a property valuation of your home. 

This is to ensure that you buy each share at the current market price, not the price at the time you bought the first share of your home.

If the value of your home has risen this could mean that you pay more for additional shares in your home than you did in the first share.

You will also need to remortgage, which is when you take out another mortgage with a new lender or stay with your existing one.

Meanwhile, you will also have to pay stamp duty on the whole value of the property when the portion you own equals or exceeds 80%.

This could cost you thousands of pounds on top of the cost of buying additional shares.

Mobeen Akram, New Homes Director, Mortgage Advice Bureau, warned: “If you increase your share through staircasing, your rent will decrease but the other fees will likely remain the same.

“You may also need to pay additional costs associated with getting a mortgage when you staircase, such as valuation fees and legal costs.”

Value of the portion of your home you own may increase

House prices constantly go up and down depending on the property market.

Usually house prices grow steadily over time, which could mean that the proportion of the home you own may also increase in value.

If this happens then you have built up equity in a property, which you could use to take the next step on the property ladder.

For example, if you bought a 50% share in a property which is in total worth £300,000 then your share is worth £150,000.

If the value of the property increases by 10% then its new market value will be £330,000.

Your share is still 50% but it is now worth £165,000.

Drawbacks

High ground rent and service charges

When you buy a shared ownership home you usually need to pay a service charge which covers the cost of cleaning and maintenance.

This can be charged monthly, yearly or twice a yearly.

You can ask your landlord for a summary showing how the charge is worked out and what the money is spent on.

The cost of the service charge does not depend on the share of the property you own.

This could mean that even if you own a 25% share you will still pay the same level of service charge as someone with a 75% share.

The initial service charge fee is also not fixed, which could mean that the cost soars after a few years.

Beware of short leases

Shared ownership properties are leasehold, which means that you own the building for a set number of years.

Unlike freehold properties, you also do not own the land that it is on.

When the term of the lease expires, the property will belong to the landowner unless you extend the lease.

Applying for a lease extension from your landlord could cost tens of thousands of pounds.

As the number of years left on the lease gets shorter the property becomes harder and harder to sell.

You could be forced to reduce your asking price to encourage someone to buy the property.

It may not be cheaper than getting a mortgage

High monthly mortgage payments and rent could mean that you do not save any money compared to just getting a mortgage.

Typically, your annual rent is charged at 2.75% of the portion of the property that you do not own.

For example, if you bought a 25% share of your property, your monthly rent would be 2.75% of the remaining 75% share.

If you buy a new-build shared ownership home then the rent limit is 3% of the value of the share the landlord owns.

But for resale homes the starting rent will be set at the same level as the previous shared owner was paying.

The landlord will review the rent at a time set out in your lease, which is usually once a year.

The rent may go up when it is reviewed but it will not go down.

You are still a tenant

As you pay rent on the portion of the property you do not own you are still a tenant of your landlord.

This means that you could be evicted on many grounds, for example if you fail to pay rent, sub-let your home or are a nuisance.

If you are evicted then there is a risk that you could lose the proportion of the home you have already bought as you do not own it fully in the eyes of the law until you have staircased up to 100%.

The housing association is not legally obliged to reimburse you if you are evicted.

Instead, you are only legally entitled to be paid for your share on the sale of the property.

You must make sure that you can afford your mortgage payments and rent before applying for shared ownership.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

PERSONAL Independence Payments (PIP) are a lifeline for many Brits with physical or mental health conditions that make it hard to carry out everyday tasks or get around.

Worth just under £10,000 a year for someone on the higher rate for both the daily living and mobility elements, a sudden stop to payments can cause a serious black hole in people’s finances.

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Worse, if the change is unexpected, it could mean bills going unpaid as there’s not enough in the bank to cover outgoings.

The government has said that around 3.1 million PIP claims have been reviewed since 2016. 

According to Citizens Advice, tens of thousands of people have their payments stopped or reduced as a result of these reviews.

The charity says that there are eight key reasons that payments could be decreased or stopped altogether, and has explained what you need to do about each of them. Here’s everything you need to know.

You didn’t return a review form in time

If you failed to send back your review form by the deadline given, you need to call the Department for Work and Pensions (DWP) as soon as possible.

If you have a good reason, the benefits office might give you an extension. Make sure you then fill in the form as soon as possible and send it off.

If your claim is successful, you’ll be paid the money you should have got if your claim hadn’t stopped.

If you aren’t given more time, and don’t have a good reason that you can use to challenge this (such as ill health or an emergency) then you need to start a new PIP claim.

You should do this as quickly as possible because the process can be time consuming.

If you want to challenge the DWP about a stopped PIP claim, you need to do so within a month. Read our guide on how to make a challenge.

You’ve reached the end of your fixed-term PIP award

If your fixed-term award came to an end, the next step depends on whether you’ve been sent a review form or not.

If you didn’t get a form, but think you should still qualify, you should start a new claim as soon as possible.

If you did receive a form, but didn’t return it on time, you should follow the process above.

If you sent your form back within the deadline and haven’t heard anything, ring the DWP. You can check whether your form has been received – and ask when you can expect to get a decision on your award.

You had a medical assessment and the DWP decided your condition has improved

The DWP can decrease or stop your benefit payment entirely if they believe that your mental or physical health condition has improved.

However, you can challenge the decision if you think you should still be getting the benefit.

Make sure you gather evidence before making any challenges, for instance, a note from your doctor or a specialist saying that your condition hasn’t improved or that you still struggle with everyday tasks.

Read our guide on how to make a challenge explains the specific steps you need to take and the deadlines you should consider.

You missed a medical assessment

If you missed your medical assessment, the DWP will stop your claim. In the first instance, ring up and ask whether you can get a new appointment. This is more likely to be successful if there’s a good reason you missed the first one.

If you are given a new assessment date, make sure you turn up. If you’re successful in your PIP application, you’ll be paid the money you would have got in the interim if your claim hadn’t stopped.

If the DWP won’t let you arrange a new appointment to be assessed, you’ll need to start a new PIP application and should do this as soon as possible.

You told the DWP about a change of circumstances and they decided you can’t get PIP any more

You must alert the DWP if you go abroad, go into hospital or a care home, go into prison or custody, or if your immigration status changes.

Depending on what has changed, your benefit payment could be stopped. For instance, if you go abroad for more than 13 weeks or you’re in hospital for more than four weeks.

You don’t need to tell the benefits office about changes such as getting a job, changing earnings, or moving in with a new partner.

If your circumstances change again, for instance if you come out of hospital or return to the UK, call DWP. Citizens Advice says that you might be able to restart your claim, or you might need to make a brand new claim instead.

If you think the DWP has made an error, you can challenge the decision, using our guide.

The DWP is taking back a benefit overpayment

If you’ve been paid too much benefit, the government will usually reduce your future benefits payments until you’ve repaid what you owe.

You should get a letter explaining why they think you’ve been overpaid, including a list of reasons. If you haven’t been told why you can ask to be sent the reasons in writing.

You can challenge the decision if you think it’s wrong. We have a guide to how overpayment happens and what you need to do to make a challenge here.

Even if you have been overpaid, if the reductions are causing you financial hardship, for instance, if you can’t afford your rent or to eat, ring the DWP’s debt management centre.

You might be able to work out a more affordable plan, or even have the overpayment ignored.

The two main numbers are:

• Telephone: 0800 916 0647 
• Textphone: 0800 916 0651

You have been accused of benefit fraud

If you’ve been accused of fraud, your payments will stop while the DWP investigates. Citizens Advice says that you should try to find a solicitor that can help you while you’re being investigated.

The charity has a helpful step-by-step guide explaining how to get help and what else you need to do here.

If your health condition worsens, or if you have a new disability or condition, you might be able to make a new claim, but otherwise you’ll have to wait.

If the DWP decides your claim wasn’t fraudulent, you’ll get all of the money you should have received while the investigation was going on.

You are subject to immigration control

If the DWP say your PIP has stopped because you’re subject to immigration control, you should get help from a Citizens Advice adviser.

You can speak to the charity online, or by ringing 0800 144 8848 in England or 0800 702 2020 in Wales.

Personal Independence Payment (PIP)

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Here’s everything you need to know about claiming PIP