HMRC has done its campaign to be recognised as the most loathed organisation in Britain no harm at all following its admission that it has charged six million people the wrong amount of tax.

The government body estimates 4.3 million people have overpaid, which will result in some welcome bonus payments for those concerned, but the 1.4 million who have underpaid without their knowledge and through no fault of their own have every reason to feel aggrieved, not least because the extra income they received every month is likely to have been swallowed up by the day-to-day cost of living without even being noticed.

HMRC puts the average amount individuals owe at £1,380, which will be repaid through changes to next year’s tax code in the majority of cases, but some people will have to pay back over £2,000.

After the understandable public outcry, those owing less than £300 will now not be expected to pay the money back, but everyone else will be subject to an interest rate of 3% – six times the Bank of England base rate – if they cannot pay up immediately. Needless to say, those owed money by HMRC will not receive anything like as generous a deal, with outstanding balances attracting a rate of 0.5%.

In the meantime, the government has pledged to increase the number of call centre staff to help deal with the inevitable surge of enquiries from worried individuals; as someone who spent days on end without success trying to get through to this shambolic organisation when it had mislaid our tax credit application last month, this really does seem like the very least it could do to repair the damage.

Just not adding up

For some individuals affected by the HMRC tax fiasco, this could not have come at a worse time.

The Consumer Credit Counselling Service says it has had to inform over 30,000 people – a third of its total callers in the first half of this year – that there is no “appropriate solution” to their debts other than to earn more money (which may seem blindingly obvious and was probably not what these desperate people wanted to hear).

The advice service says these are simply cases where outgoings exceed the amount of money that is regularly paid into accounts, by an average of £449 a month. In many cases this is because people have been made redundant, suffered a wage freeze or incurred an extra expense such as a new baby.

In some instances, individuals were unable to declare themselves bankrupt because they would lose their homes or simply because they could not afford to do so. This incurs a charge of £600 for debts of over £15,000; a final kick in the teeth on the way to rock bottom.

Settling down

Better news for anyone thinking of selling a home, however, with evidence from the Halifax that prices appear to be stabilising.

The bank claims prices rose by 0.2% in August – although this contradicts its rival Nationwide’s figures of a 0.7% slump – and now predicts that properties will be worth roughly the same at the end of 2010 as they were at the start.

This is potentially more significant than it may first appear, as many buyers have held off house-hunting in the hope of substantial price falls, and is certainly a welcome boost for anyone hoping to move in the near future.

The real sticking point for the housing market, though, remains the availability of mortgages. Many first-time buyers with relatively small deposits – on which the whole health of the property ladder depends – remain frozen out, but there is at least a greater choice for those able to put down 20%.

Since the start of this year the number of mortgages in this category has almost doubled, from 166 to 326, potentially putting loans within the reach of those first-time buyers who have used the past couple of years to squirrel away that little bit extra each month for their first home.

Retirement, but not as we know it

It seems to me that more and more of us are unwittingly relying on cashing in on rising house prices to fund at least part of our retirement, either through downsizing or equity release.

A survey by Newsnight revealed that 70% of people now think it will be impossible to build up a pension pot that will allow them to fund a retirement of up to 30 years, while 8% said they did not think they would ever be able to afford to stop work.

In one way, the poll is reassuring by demonstrating that people are aware of the issue, as taking any kind of action to increase pension provision now could make life much more comfortable further down the line.

Most pensions and investments – even those with lifestyling benefits built into them – remain heavily influenced by stock market performance, however; so perhaps we’re all heading for a situation where the strength of the economy rather than age or mental/physical ability is the primary factor in when we finally call it a day.

It’s a dangerous game, as anyone who put off retiring in 2007 when house prices and stock markets were at their peak will be able to testify.

An unequitable mess

Those caught up in the Equitable Life fiasco, where around a million customers saw the value of their pension pots dwindle after the company’s near-collapse in 2000, will be hoping the government takes a more generous stance towards their plight than an official report commissioned by the previous administration.

The report written by retired judge Sir John Chadwick, which came out in July, estimated policyholders lost around £4.8 billion as a result of the saga but proposed a payout of no more than £500 million; around £500 each.

The company itself has now made a last-ditch attempt to persuade the government to pay out at least £4 billion in compensation but with October’s spending review looming large it could hardly have picked a worse time to beg for clemency.

The coalition government initially made sympathetic noises on the subject when it first came to power but ministers have since appeared to align themselves to Chadwick’s report.

A final decision is due next month and in all probability will be much closer to Chadwick’s proposal than that sought by Equitable itself, but it should at least see some kind of payout and hopefully put this sorry story to bed.

Chequing out

Finally, it seems as if the fat lady is beginning to warm up her vocal chords as far as the good old-fashioned cheque is concerned.

The use of this method of payment declined by 10% in the second quarter of this year, according to figures from the Payments Council, with people preferring to settle up by card or using the Faster Payments system to transfer money online.

The use of cash also fell by 3.2%, suggesting people are happier to use cards for lower-value transactions when out and about. At a time when money remains tight for most people this is a risky business; there’s little doubt that handing over a wedge of notes or cold, hard cash makes you think far harder about that unnecessary extra than merely ramming a piece of plastic into a terminal.

It will though, I suspect, be some time before we can write the final obituary for the humble cheque. Thousands of smaller firms still begrudge paying card-handling fees and sole traders would sooner walk away from a job with the security of a cheque than rely on customers to make an online transfer.

And, of course, it removes one of the oldest excuses for late payment in the book: “I’m sorry, have you not had that? It must be in the post.”