Such payments would continue to be available but future increases could be frozen, the BBC understands.

A spokesman said they were "in the mix" ahead of October's spending review.

Deputy PM Nick Clegg, speaking as the coalition marked 100 days in power, said no final decisions had been taken.

One option open to the government is to pay the benefits to all, whatever their income, but to "taper" them so that the poorest in society get the most money.

Ministers are already committed to raising the age at which the winter fuel allowance can be claimed from 60 to 65 by 2020.

However, it has not ruled out bringing this change forward.

(As reported by the BBC)

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The number of people taking one out has quadrupled since 1996 according to the watchdog Consumer Focus.

That is despite some companies charging interest rates of more than 2,500% a year.

The organisation is now calling on the industry to bring in more safeguards to protect vulnerable borrowers.

''Payday loans are a valid form of credit and it's much better for people to take one out rather than go to a loan shark," said Sarah Brooks, head of financial services at Consumer Focus.

"But we do think there needs to be a limit on the number of loans people take out and how many loans they are able to roll over."

Research by Consumer Focus suggests that 1.2 million people are now taking out a payday loan every year, borrowing a total of £1.2bn.

For many people such a loan is a quick and efficient way of getting hold of short-term credit.

If the money is paid back promptly on the next pay day, this type of lending can be cheaper than paying an unauthorised overdraft or a credit card charge.

However, if the loans are rolled over, debts can quickly escalate.

Dressmaker Stephanie Derby from Finsbury Park in London took out a pay day loan after she fell behind on rent and bill payments.

She was already overdrawn and at her limit on her credit cards.

''I didn't feel I had any other option, I had just graduated and all my debts were mounting up, it really was a last resort," she said.

"I borrowed £400 hoping to pay it back a few weeks later but I was unable to.

"Each month it cost another £56 to renew the loan and after six months the initial loan of £400 ended up costing me nearly £800," she explained.

(As reported by the BBC)

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His comments came as the Bank lowered its economic growth forecast, and said inflation would stay higher for longer than previously forecast.

The Bank now expects the economy to grow by about 2.5% in 2011, down from its previous forecast of about 3.4%.

It added that a lack of bank lending would limit economic growth.

"It will take many years before bank balance sheets and fiscal positions return to anything like normal," said Mr King."In the meantime they will act as headwinds to the recovery."

Mr King also warned that the UK economy faced a difficult rebalancing "away from private and public consumption and towards net exports", and that this could also hit economic growth.

However, he added that there were some factors helping to keep the economy expanding, most notably the continuing economic stimulus measures, and the fall in value of the pound.

The Bank's Quarterly Inflation Report came after the latest official unemployment data showed a further fall in the jobless total.

The number of people unemployed in the UK fell by 49,000 to 2.46 million in the three months to June, according to the Office for National Statistics.

This is the second consecutive month that the jobless number has fallen.

(As reported by the BBC)

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HM Revenue & Customs said its tax credit helpline was "extremely busy" on Saturday, and it would now look "sympathetically" on late callers.

It said this would be done on a "case by case basis", where claimants can show they tried to ring on Saturday.

Four million families risk losing their tax credits if they are not updated.

To do this, they had to inform HMRC about any changes to their income or childcare costs before the 8pm deadline on Saturday, 31 July.

HMRC had put extra staff on its helpline, but the BBC has had numerous e-mails and texts from people who said they were unable to get through on both Friday and Saturday.

The standard helpline telephone number is 0845 300 3900 - or for customers who are deaf or hearing or speech impaired there is a textphone number 0845 300 3909.

At present, tax credits are based on a family's own estimate of its income for the coming year, with households allowed to earn an extra £25,000 before they have to pay money back to the government.

But from next April, that leeway, or buffer, will be reduced to £10,000. The following year it will be cut to £5,000, meaning many more families face being asked to pay money back.

As a result, some experts have warned that the number of over-payments and subsequent repayments could rise sharply.

(As reported by the BBC)

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About 18,000 variable and tracker rate customers are being contacted about the changes, believed to range from less than £25 to hundreds of pounds a month.

The banks, which are both owned by National Australia Bank, said the error was "exacerbated" by last year's unprecedented falls in interest rates.

The banks appear to have miscalculated capital repayments.

This led to the banks collecting less than the minimum monthly payment required for customers to pay their mortgage within their agreed term.

Affected customers were underpaying on capital repayments and now have a shortfall on their accounts.

A Clydesdale Bank spokesperson said: "First and foremost we are very sorry that this error has happened."

(As reported by the BBC)

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A total of 58.6 million trips were made last year, 10.4 million fewer than in 2008.

The number of visitors coming to the UK also fell, but at a slower rate of 6.3%, with 29.9 million overseas residents entering the UK.

Business visitors both to and from the UK showed the steepest fall in numbers.

UK business travel fell by 23%, while 19% fewer business trips were made by non-residents to the UK.

The ONS report, Travel Trends, shows that although visits abroad had fallen in both 2007 and 2008, these falls were much smaller at 1% and 2.7%.

The long-term average since the data first began to be collected in the 1970s showed overseas travel growing at an average of 4% a year.

(As reported by the BBC)

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About 42,000 home loans were granted in May, up 2% on the previous month and 15% higher than May 2009, the Council of Mortgage Lenders (CML) said.

Mortgage interest payments accounted for the lowest proportion of home movers' income for 35 years, it added.

It predicted that mortgage borrowing would slow in the rest of 2010.

A temporary increasing of the threshold at which purchasers must pay stamp duty had led to activity picking up in the second half of 2009, said CML director general Michael Coogan.

"With the government's austerity drive picking up momentum we are unlikely to see a repeat of those buoyant numbers this year," he added.

Lending for house purchases has risen for 11 consecutive months.

With the Bank rate at record lows, the environment for low rates has meant that homeowners' mortgage payments have also proved to be low.

For those moving home, just 9.5% of average income was spent on mortgage interest payments in May - the lowest since comparative data began 35 years ago.

There were 27,100 loans given to those moving home in May. This was up 2% on the previous month, and 19% higher than the same month a year ago.

With many people staying on cheaper standard variable rates, the number of people remortgaging in May was still 14% lower than in May 2009. However, the 26,000 loans granted was 6% higher than in April.

First-time buyers were also benefiting from relatively cheap rates, the CML said, if they could raise a significant deposit.

Interest payments accounted for 13.2% of their income, the lowest since March 2004 but finding a large deposit is still a stumbling block for many,

In May, first time buyers typically borrowed 75% of the value of the property, at an average of 3.14 times their income.

Taking the average house price from the Land Registry in May, this would put the cost of a 25% deposit at £41,328.

At the start of the year, the CML predicted there would be £150bn of mortgage lending in 2010.

It now describes that forecast as "a little optimistic".

(As reported by the BBC)

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And a couple with two children need £29,200 for a minimum acceptable standard of living, the Joseph Rowntree Foundation (JRF) said.

The figure indicates a growing gap between the national minimum wage and the minimum income standard.

The charity claimed this was due to rising inflation for necessities.

"This research shows what ordinary members of the public think is needed - not just to survive but to take part in society," said Julia Unwin, chief executive of the JRF.

"It provides powerful evidence for the new government to use as it develops policies to deal with poverty."

The JRF report is an attempt to raise the debate about the level of relative poverty in the UK beyond the official poverty line of 60% of average earnings.

Inflation is calculated using a typical basket of goods. Similarly, since 2008, the JRF has gathered information from focus groups to set a benchmark for an "acceptable standard of living".

For example, it now considers a computer and home internet connection as essential for all working age households. In previous years this has only been necessary for people with school-age children, it concluded.

Pensioners, however, thought the internet was growing in relevance - but not yet a necessity.

Key findings from the report included:

The minimum household budget needed to rise by 3% to 4% in the year to April - broadly in line with inflation.
In the last 10 years, inflation had risen by 23%, but key essentials cost 38% more.
This included food prices (up 37%), bus fares (up 59%), and council tax (up 67%).
The essentials required for a minimum standard of living have not been reduced in people's thinking, despite the level of economic uncertainty, the Foundation said.

For example, a week's holiday a year in the UK was still considered necessary to participate at an acceptable level in society.The JRF, which has produced a minimum income calculator, said that the Budget's announcement of a £1,000 hike in tax allowances from next year would make a family £320 a year better off, after inflation, if both partners were working.

But all of these gains could be lost by other Budget changes, such as cuts in tax credits, the freezing of child benefit, the rise in VAT, and the cap on housing benefit.

"This new research underlines how people living close to the minimum income standard can end up not having enough, if economic trends start going against them," said one of the report's authors, Donald Hirsch, of Loughborough University.

"For example, a single person who a decade ago had just enough to get by, and whose income has risen in line with official inflation, cannot afford a minimum budget today.

"Big rises in the prices of things like food and council tax means that they are nearly £20 a week short of what they need, and must think of what essentials they will go without."

A spokesman for the Department for Work and Pensions said: "Work is the best route out of poverty and we are determined through our programme of welfare reform to make work pay in order to encourage people off benefits and into jobs. The current system is broken.

"We are firmly committed to tackling poverty and improving the lives of low-income families. We remain focused on our goal of ending child poverty by 2020 and are conducting a review into poverty and life chances."

(As reported by the BBC)

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Figures from the Bank of England show that write-offs rose to £1.25bn in the first three months of 2010.

That was the second-highest quarterly amount on record.

Last year, a record £4.12bn was written off by credit card lenders, amounting to about 10% of all money lent on credit cards.

The amount of money written off on mortgages fell to £160m, the lowest quarterly figure for 18 months, as house prices rose again and the number of homes being repossessed fell back.

The number of repossessions the UK fell by 7.5% in the first three months of 2010, from 10,600 in the last three months of 2009 to 9,800.

The Bank of England said in its latest Financial Stability Report that losses on credit card lending had been a prime factor in driving up the interest rate margin charged on them.

Its statistics show that the average UK credit card rate was 16.51% in April this year, slightly higher than in July 2007 when it was 15.2%.

But in that time bank rate has fallen from 5.75% to just 0.5%, where it has been since March 2009, giving the card companies a much larger cushion.

(As reported by the BBC)

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These changes are designed to save £11bn per year by the end of the parliamentary term.

That adds up to a quarter of the annual target of £40bn of spending cuts and tax rises by 2014-15.

A big saving comes from linking benefits, except the state pension, to the lower consumer prices measure of inflation.

Although they both measure changes in living costs, the latest Consumer Prices Index (CPI) is at 3.4% while the Retail Prices Index (RPI), which is currently used to set benefits, is at 5.1%.

The chief difference between the two is that the RPI includes housing costs such as mortgage interest payments.

The CPI is typically lower - over the past 20 years it has been higher than the RPI only three times.

More than half the savings - £5.8bn of the £11bn in 2014-5, for example - will come from the switch between inflation indexes.

The BBC's economic editor, Stephanie Flanders, says savings for the government will not go unnoticed by those who rely on these benefits.

She called the change a "big deal".

"Quite apart from the many other benefit changes he has announced, this change will feel like a significant cut in living standards for households that are dependent on benefits.

"Research has tended to show that the cost of the basket of goods bought by poorer households often rises faster than the basket of goods included in the CPI."

The TUC claimed that child benefit would be £2 a week lower if it had been linked to CPI rather than RPI since 2000.

Its research suggested that child benefit for the first child would now be £18.05 rather than the current £20.30.

Carer's allowance would have been £48.64 rather than the current £53.90, it claimed.

"[The change] will knock a bit off benefits and that will soon mount up to a cut that will make a real different to some of our poorest and most vulnerable families," TUC general secretary Brendan Barber said.

(As reported by the BBC)

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