TRICIA PHILLIPS

Q A

I HAVE earned £800 annually on my savings. Do I need to declare this?

IT depends whether you are a basic rate taxpayer or a higher rate taxpayer. Basic rate taxpayers can earn up to £1,000 in savings interest every year without paying tax, while higher rate taxpayers can earn £500. If you do need to pay tax you will need to contact HM Revenue & Customs.

QWE are helping our son save into a Lifetime ISA to build up a deposit for a home. But he has lost his job and is struggling financially.

Is he able to access this money?

AYES, he can access the cash in his LISA but he will pay a penalty for accessing it for any reason other than the deposit for a first home, or before he reaches age 60.

The good news is the

Treasury announced last week it was decreasing the penalty from 25% of the total fund to 20%.

QI AM buying a fridge via a rent-to-own deal. I’ve asked for a temporary payment freeze as my income has dropped and I can’t afford

Firms are not allowed to remove essential items if you have asked for a payment freeze the repayments. However, the firm is now saying they are coming to take back the fridge. Can they do this?

ATHE guidance from the Financial Conduct Authority around payment freezes on rent-to-own deals is that if the buyer needs the item, ie it’s an essential, then they should not repossess it.

A payment freeze should just mean that – you stop making repayments for up to three months, interest is added to the amount you owe and your payment term is then extended by three months when you restart payments.

I would suggest that you contact the firm to say they’re breaking the FCA rules and if they won’t help you, call Citizens Advice on 0808 223 1133.

QYOU said in a recent feature you need 35 years’ National Insurance contributions to get the full state pension. I’ve got 41 years but when I checked my pension forecast I still won’t get the full pension. Why?

AIT needs to be 35 years of full National Insurance contributions – ie a full 12 months for each year. Also, many workers are unaware they were contracted out of the additional state pension by their employer.

This means they paid lower NI contributions or more was paid into their workplace/ private pension. Because of the lower NI contributions they receive less than the full state pension.

This has caused lots of confusion for those who end up with lower state pensions.

From April 2016 the rules changed and people are no longer able to be contracted out.