Martin Lewis has written to the new Labour Chancellor Rachel Reeves, urging her to make four urgent tax and benefits changes. The money expert, who remains non-partisan, wants to work with the government to improve people's situations without huge expenditure.
First, Lewis called for a review of the High Income Child Benefit charge, which requires repayment for earners over £60,000 and full repayment over £80,000. He warned this unfairly penalises single earners or households with one high earner, citing a case where a couple earning nearly £100,000 faces no charge while a single breadwinner loses out above £60,000.
Second, he highlighted the 'unfair Carer's Allowance cliff edge', where earning £151.01 a week results in losing the entire £81.90 allowance, unlike other benefits which taper gradually. He described the system as 'broken, old fashioned, unjust and in need of urgent change'.
Third, Lewis urged the cancellation of the Lifetime ISA (LISA) withdrawal penalty. The £450,000 house price limit, set in 2017, has not been updated, making it difficult to buy a home in many areas. Those withdrawing for non-qualifying homes face a 25% penalty, losing £1,250 of their own funds. He proposed allowing first-time buyers to withdraw for deposits on properties over £450,000 without penalty.
Finally, he called for renaming Tax-Free Childcare, which is actually a 25% top-up on childcare costs. The misleading name means 800,000 eligible families miss out. Lewis said the misnaming has caused damage, reducing understanding and uptake.
