CAB Your rights to holiday pay on furlough
I will reach state pension age next month, but intend to keep working full time for a while yet. I was wondering if I should take the option to postpone getting my state pension until I really need it. Is this a good idea?
For people who postponed, or ‘deferred’, getting their state pension before April 2016, there were two options – you could receive an increased weekly amount of state pension when you did claim it, or, you could receive a lump sum payment.
The lump sum was an attractive option to many people who had worked on and didn’t have a lot of other income. They could ask that the lump sum was paid at the start of the coming tax year so they paid less tax on it.
Things changed in 2016. Now you could earn extra state pension at one per cent of the weekly pension for every nine weeks you put off claiming.
You have to put off claiming for at least nine weeks to get extra state pension. So, for example, if you have a pension of £150, but defer it for nine weeks, when you do claim it you would get an extra £1.50 per week.
While you can no longer defer your state pension for years in order to receive a lump sum, if you claim your pension less than a year late, you will still receive a backdate – a large payment covering the amounts you have missed to that point. There are no special tax rules for a backdated benefit.
If you have other pensions and savings and want to understand how you might be best off in your retirement, you should consider getting independent financial advice. You can find a list of financial advisers on the unbiased.co.uk website.
At my employer’s request I took holidays last month while still on furlough. We are expecting to be busy to the end of the year, so I thought this was fair enough. However, when I received my pay it was just the furlough rate, and only 80 per cent of my furlough pay. I questioned this, and was told it was correct. Is this right?
How your holiday pay is calculated depends whether you are in a job which has consistent working hours and wages, or in a job with hours which vary a lot, as is often the case for people with zero hour contracts.
For people with consistent hours, time on furlough should not affect the amount of holiday pay due for any time off. You should still receive 100 per cent of your contractual wage while on holiday.
If your earnings varied week to week in “normal times”, your holiday pay should be calculated by taking an average of the amount you have been paid by your employer for the last 52 weeks.
Anything you were paid for the weeks you were on the furlough scheme will count towards the average and for many people will have the effect of reducing holiday pay slightly.
Any week you didn’t work or receive any payment won’t be counted or affect your average pay. If you still think you’ve been underpaid, you should explain why to your employer.
If you need help to do this, or are considering further action like raising a grievance, you can receive impartial advice on the rules from ACAS on 0300 123 1100 or help from an adviser at Citizens Advice on 0141 889 2121.
I bought a sofa on hire purchase (HP). It was a four-year contract, and I have had the sofa for over a year and a half. I’ve moved in with my partner and no longer need the sofa. Can I just return it?
Check your contract to make sure that this is a hire purchase agreement, and not some other kind of finance.
As you legally only have to pay for half the cost of the item, you should be able to work out what you owe by deducting what you’ve already paid in instalments from half the value of your agreement.
We do hear of people being hit with additional costs when returning items on HP. If you think charges are unfair, you can receive advice from Advice Direct Scotland on 0808 164 6000 or from your local bureau. If you’ve paid off half the item or more, you legally don’t have to pay any more.