Pensions, Benefits and Care Costs
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General disclaimer

NOTICE : I understand that the Financial Conduct Authority (0845 606 1234) do not like unqualified people giving financial advice.  I would like to state that none of the following should be considered as advice.  I just like to point people in the direction of useful information. To find an Independent Financial Adviser (IFA) try Details on this page are, to my knowledge, correct at the time of uploading but are supplied as information only and in no way implies advice and the author cannot be held responsible for any actions which you take as a result of what is written. Also, as interest rates and investment charges can change at any time, it is imperative that, before acting on the information below, you check with the organisation concerned. If you find any of the rates are inaccurate, please email me at  Links on this page change rapidly. Apologies if you get a 'Page not found' error. It is often because a web author has moved the page.

Broadband  BT is offering broadband at less than half price to people on benefits, starting at 15 a month. The benefts in question are U&niversal Credit, Pension Credit, Jobseekers Allowance, Income and employment support allowances.  This will continue for a year before a review.  BT reckons that 4.6 million households will be eligible.

NEWS MARCH 2021. The government has discovered that a large number of individuals have not been paid their rightful due. This amounts to 2.5 billions owed and they are still working it out ! For once this is not a scam !
It relates to :

Following a change in the law in 2008, when their spouse became entitled to a State Pension, some people should have had their basic State Pension automatically reviewed and uplifted. Underpayments occurred in cases when this did not happen.

Read the full article HERE  The government's pension advisors.  Currently working from home

More on this subject :

The current State Pension age is 66, rising to 68 by 2046. But you will also need 35 qualifying years of National Insurance (NI) contributions in order to qualify for the full new State Pension amount. You’d need at least 10 qualifying years to receive any new State Pension at all. 

Lots of women often don’t realise that they won’t have enough qualifying years to receive the full new State Pension. It’s usually because women take more career breaks, for example to care for children.

When women do return to work, they might do so on a part-time basis and earn less, meaning they might not have earned enough for those years to be ‘qualifying’. 

With over a third of women viewing their State Pension as their main source of income in retirement, there’s an increasing concern that lots might struggle once they’ve finished working.

That concern heightens for some same-sex couples, as the gender pension and the gender pay gap is effectively doubled.

If you’re worried that you aren’t going to reach the number of qualifying years to be awarded the full State Pension, there are a few things you can do. 

The first is to look at how many qualifying years you have and check your forecast of how much you might get from your State Pension. 

Which's wide ranging description of the benefits system for older people

Changes to Pension Credit and Housing Benefit have been (quietly) announced in connection with the continued roll out of Universal Credit. Pension Credit is an income-related benefit to give you some extra money in retirement, and if you’re struggling to cover your rent, you could claim Housing Benefit to help with your housing costs:

The changes to both of these benefits will see the right to claim them withdrawn from future claimants who happen to have a partner who hasn’t yet reached their own pensionable age,

Millions of pensioners will receive a pay rise of 3.9% in April 2020, in line with average earnings – equating to an increase of up to 343.20 for the year. The 3.9% rise was confirmed after the Office for National Statistics (ONS) revealed today that inflation remained at 1.7% in September. The state pension payment is protected by the ‘triple lock’ guarantee which means it increases each April by the greater of September’s price inflation,earnings growth or 2.5%. This year, the highest measure was average earnings,

2019 : Important Changes in Pension Credit

Age UK  called on all pensioners living on a low income with a partner of working age to urgently check their eligibility for Pension Credit and Housing Benefit and to put in a claim before the Government changed the rules on 15th May 2019 or risk missing out on up to 7,000 a year .The charity is warning that the new policy could place some pensioners in the absurd position of being financially better off if they split up and live apart from their younger partner. This is because once the change was implemented, the older partner became eligible for significantly more money by claiming Pension Credit as a single person than if the pair of them claimed Universal Credit as a couple.

(call Age UK Advice free of charge on 0800 169 6565, visit or contact their local Age UK for further information and advice)

Although in theory this change will not impact on existing claimants Age UK issued the warning that if a so-called ‘mixed-age couple’ temporarily loses their eligibility for these benefits because of a change in their personal or financial circumstances, from May 19 they would be unable to regain it and will be thrown back onto the Universal Credit regime, the problems of which are well documented.

Age UK state that over recent years the means-tested benefit systems for pensioners and people of working age have been growing further apart: The standard rate of Pension Credit guarantee is paid at a higher level than the standard rate of Universal Credit: While the Pension Credit guarantee has been uprated in line with earnings, while working-age benefit levels have been frozen or increases restricted.

Differences in how any earnings are treated: For Pension Credit, usually just 5 a week (10 for a couple) of earnings from work are ignored after which earnings reduce payments 1 for 1. Under Universal Credit, earnings reduce benefit by a 63% taper. So, for example, if earnings rise by 100 a month, benefit reduces by 63.

Read the latest on State Pensions:

The government has finally responded to the Competition and Markets Authority’s (CMA) care home market study, accepting that consumers needed better protection from ‘unfair practices’ by care homes. It has promised ‘immediate action’ to improve consumer protections in the sector and to seek changes in the law if improvements don’t happen. It has also accepted that there is ‘unacceptable variation’ in care home availability locally, and that planning is needed to ensure there will be enough places for the future. This could include changes to the law. We must keep them to this.

The still complex matter of Benefts has been brought together at

or check here::

People who get the New State Pension may get up to 3.4% more from April 2020. They benefit from the Triple Lock Guarantee. The main reason for this is a large increase in the average annual wage by September 2019. But people who were eligible for the state pension BEFORE April 2016 (men born on on or after 6th April 1957, women born on or before 6th April 1953) will only receive the inflation rate of.1.7% more because (unfairly?) their pension increase does NOT take into account the national average wage,

A useful site for pensions, benefits and savings  Friends of the elderly give grants to people living alone with few saving

The variety of benefits that may be available to you if you are on a low income is very confusing. The government admits that millions have been left unclaimed.  But there is no 'back pay', so make sure you get what you are due.  It would be a good idea to make an appointment at your local Citizens Advice Bureau to see if you are missing out :

1. Attendance Allowance
Attendance Allowance is extra money you can claim if you’re over 65 and need regular help with your personal care. It is non-
means tested, so you can claim it whatever your income or savings.

2. Pension Credit
Pension Credit tops up low income if you've reached the qualifying age. Lots of people who qualify for it aren’t claiming it, so
it’s worth checking if you’re eligible.

A recent government report on this says : "Even though we have reduced pensioner poverty close to historically low levels, many older people are still not claiming the support they are entitled to."
Pension Credit is a non-taxable benefit based on a person's income. The benefit tops up pensioners' weekly income to 159.35 for single people or 243.25 for couples.
Additional amounts may be payable for people with caring responsibilities, severe disabilities or certain housing costs.
Many recent new pensioners who receive the flat-rate state pension have the benefit wrapped into their regular pension.
Caroline Abrahams, charity director at Age UK, said: "It is extremely worrying that there has been no progress in the benefit take up figures despit

3. Carer's Allowance
Carer’s Allowance is a benefit for carers. If you spend time looking after a partner, relative or friend who has an illness or
disability, you may be able to claim it.

N.B. To get this allowance it is necessary for the person to have Care Assessment (to prove that they need care and have someone willing to care for them. See

4. Personal Independence Payment and Disability Living Allowance
If you’re under 65 and have ill health or disability, you could be eligible for extra money to help with additional costs, through

5. Working age benefits
If you’re of working age, there are various benefits you may be able to claim if you’re on a low income, or have no money
coming in

6. Bereavement benefits
We all need support after the death of someone close. Bereavement benefits provide extra money to ease the financial strain after
the death of a spouse or civil partner. You can get support even if you’re not on a low income.

7. Help with your Council Tax
Council Tax Support can help you if you’re on a low income and responsible for paying the Council Tax on your home.

8. Help with health costs
There’s a variety of help with health costs available for over-60s. Some of it depends on your income and savings, and some of
it is available to everyone.

9. Help in cold weather
Fuel bills can be a worry in winter, but it’s important for your health that your home stays warm. Find out if you’re eligible for
extra money to help with the cost of heating your home when the weather gets colder. Most fuel suppliers have a fund to help people who are having difficulty keeping warm.

10. Help with housing costs
If you are on a low income and finding it difficult to pay your rent or your mortgage, you may be able to apply for support.

11. Universal Credit
Universal Credit does not currently affect people of pension age. If you are of pension age and your partner is not, you can
currently claim Pension Credit, but the rules are changing (2018).

12. Benefits in hospital and care homes
If you're going into hospital or a care home, your benefits may be affected. You must tell the appropriate benefit office about
any changes in your circumstances.

13. Help from your local council
Each council has funds available to help people on a low income with emergency costs who have no other way to pay. What’s
on offer varies, so check what’s available in your area. For a list of these Local Welfare Assistance schemes, go to the Child
Poverty Action Group website: You’re not automatically entitled to this help, so contact your local council to check who’s eligible and what’s available – check the telephone directory or go to You won’t usually be able to get cash, but you might get a grant, loan, or vouchers, or certain essential goods, such as beds or fridges.

14. Short-term benefit advances
If you’re waiting to receive your first benefit payment, you could get a short-term advance to tide you over if you are experiencing financial difficulties. If you’re eligible, you’ll usually receive the advance by the next working day after you request it. How much you receive will depend on your circumstances and you’ll normally need to repay it within three months.
To arrange an advance, contact:

Pension Credit (0345 606 0265)
State Pension (0345 606 0265)
Carer’s Allowance (0345 608 4321)
Income Support, Employment and Support Allowance, Jobseeker’s Allowance (0345 608 8545)

Benefit Cap
There may be a limit on the total amount of benefit your household can receive.  If your income goes above this amount, your
Housing Benefit or Universal Credit is reduced until it drops below the limit again.  This is called a benefit cap.


The government admits that people have missed hundreds of millions in benefits.  But there will be no payment after the payment dates have gone.  It is very much up to YOU or your carer to be aware of the benefits to which you are due.  If in doubt, consult the Citizens Advice Bureau. But If you want to try to work out the very complex rules about Carers Allowance, Pension Credit and Guaranteed Pension Credit do have a look at this explanation :

The government made a rapid u-turn on the possibility of allowing people to sell their annuities (the so-called second-hand annuity market).  Whilst some people would have welcomed getting some ready cash for poor paying annuities they were forced to buy, the government have realised that it would likely result in pensioners being ripped off for a second time.

The triple lock Pension. Things have changed  since the 2016 Budget. George Osborne is no longer Chancellor and Baroness Altman is no longer chief honcho on pensions,  Since leaving the position she has indicated that the Triple Lock Pension guarantee may not be sustainable in the long term,  Since 2010, the "triple-lock" policy has meant state pensions rise by the inflation rate, average earnings or 2.5% - whichever is highest.
Although Downing Street has reiterated its commitment to the Triple Lock, Baroness Altman pointed out that in a low, nil or negative inflation rate, promising a 2.5% increase will cost billions, which might not be justifiable.  However, for now (April 2019) it is still alive.   An excellent site that covers a wide range of benefits.

Article by Hargreaves Lansdowne. What happens to your pension when you die

Age UK's CareHome Checklist  (video)

AgeUK's Befriending Scheme (video)

Christmas 2015
.  Changes afoot in the Attendance Allowance 
Ministers plan to give local councils responsibility for a 5bn benefit paid to older people who need help with daily living in one of the biggest shifts of resources within the welfare state for 25 years.  The move, expected to be signaled by Christmas, when councils in England get news of their grant allocation for next year, has also raised fears that the benefit – called attendance allowance (AA) – could be restricted or capped.
At present, AA is paid to 1.5 million people aged 65 or over in the UK, regardless of their personal means. It is seen as a vital support for hundreds of thousands who live independently but might otherwise need to go into residential care.
The benefit is paid at two rates, a basic 55.10 a week or a higher 82.30 for people who need help day and night, and there are no restrictions on how it may be spent.

Not strictly Pensions but a clarification of 'Rights to Buy' for Council tenants. A big article but interesting

Think you can only get cash grants for energy saving measures if you are on benefits ?  The government's commitment to make it a green and pleasant land means that you can get free loft and wall insulation; and a substantial grant towards the replacement of an older, inefficient boiler. Check with the Energy Savings Trust on 0300 123 1234. Council house and Housing Association tenants have their own arrangements.  Many people are missing the benefits to which they are due.   

Read the Mature Times page on this issue :

Although the new flat rate pension will especially benefit people who have not been able to accumulate sufficient contributions during their working lives... e.g. people who have cared for elderly parents, those who chose to stay home with their kids and the self employed, it points out that, because the SERPS (additional pension) element will be phased out, people who have not yet retired could lose up to 1,400 per annum in pension payments.   This AgeUk site might have bee of interest to people who wished to stay in their own home to the end of their days but are finding it increasingly difficult to maintain it (and afford it). It meant that gifting their house to AgeUK in exchange for considerable benefits. Unfortunately it proved too popular and has been withdrawn.

Pension top-up. Out of the blue the government announced that retired people could top up their State Pension by handing over a lump sum.  As I thought, this scheme seemed a bad bargain and was dropped like a hot potato soon after.People were not keen on the idea of giving the government a sizeable sum in exchange for a small addition to their pension.

I feel sure this article from Age Action Alliance is very right for many older people

The health secretary faces a growing backlash after quietly (he got that wrong) shelving a key Tory manifesto commitment to cap care costs for the elderly, as experts claimed that the policy fiasco has cost taxpayers up to 100m.(there was wide publicity about the proposal before the election - which, no doubt, swung it in their favour.

For people coming up to retirement the official site to find out what your state pension is likely to be is at

I just had my statement of next year's State Pension with a booklet attempting to explain the (still) complex structure of other pension benefits. A good read but, as you probably have one, I will not attempt to clarify it here. In general benefits rise by 2.5%.  Make sure you are getting what you are due at

Useful numbers and links.Also at

For people born after 1935 they maybe able to transfer part of their (spare) tax allowance from one legal partner to the other.  If you think you might qualify you should REGISTER via this site>>> :

State Pensions Policy update

With people, on average, living longer it is inevitable that the government will gradually raise the age when we receive the State Pension (SPA) so that the taxpayer can afford the enormous cost. - a rise in the SPA by one year would currently save around 13 billion per annum.  Currently the SPA for men is 65 with women's SPA rising to equal that by 2018, Both ages rise to 66 by 2020 and to 67 between 2026 and 2028, so this will affect many people of current working age. The government has said it will review the situation every five years but that it will be kept in line with expected age levels so that they could expect to receive the pension for the last third of their lives.  Alongside this is the new system of auto enrollment being offered by employers - and the greater freedom being given to people who have a 'pension pot' to do whatever they want with it. Many will splurge it or pay off debts and mortgages. But watch out! The tax man may have designs on it.

The Warm Home Discount Scheme -  An extra 200,000 pensioners will get this help with their energy bills this winter, the government has announced. It is paid for by the energy companies and is now worth 140 per household. The scheme is being expanded, to include everyone who receives Pension Credit Guarantee.Pensioner groups welcomed the move, but warned that thousands of elderly people who do not claim Pension Credit will miss out on the payments. Hundreds of thousands of people on low incomes are also eligible to claim the discount, which in most cases is applied automatically by energy suppliers. However many people do not get the discount, unless they ask for it. Such households are being advised to contact their energy company directly, as eligibility criteria vary between different suppliers. So ASK !

Free Will Month :  Make a will or get yours updated for a donation to a number of charities such as Red Cross, Save the Children...Click the link to find participating solicitors

Welfare changes for disabled delayed

Article deleted until I understand the latest 'scheme': Universal Credit. I may be some time.

The  unpopular tax on spare council house bedrooms (intended to encourage people to move to smaller accommodation to relieve the shortage of houses for people with larger families) seems to be in trouble with many people finding it difficult to pay and many appeals pending.

The State Pension Due to the rapid rise in life expectancy the government is brinngging forward plans to raise the age when you can receive the pension and there are plans to link this age to life expectancy, which may see the age rise eventually to 70 or even more. But my usual readers need not worry too much as the changes will be gradual, the rise to 66 starting in 2019.  Even now, when you reach State Pension age you have three choices. 1. Take it and stop working. 2.  Take it and continue working. 3. Defer taking the pension.  If you take option 2 yon do not have to pay National Insurance. If you defer taking your pension, (Option 3) when you do take it you can receive an extra amount or take a taxable lump sum equivalent to the amount you deferred (plus interest).If one is fit to work on from retirement age (and wishes to do so) it can be fiancially worthwhile.


Household Flood Insurance. From 2015 a new agreement between the Insurance Industry and the government may make Flood Insurance more possible and more affordable for people in houses at risk of flooding. The additional funding is to be funded by a 10.50 levy taken from every home insurance policy. The industry says this will not drive up premiums. (Though I can't see how that can be !) But, if you have been refused insurance before it might be worth trying again.. Mind you, after the recent disastrous flooding,  one wonders whether this scheme will get off the ground.

A VERY useful site showing the benefits available to disabled people and their carers can be found at

n.b. You can see a Life Insurance Calculator at  Also the Yours magazine will search for the best annuity if you phone 0800 915 4711 or visit .  The service is free.

Making a will  It was a surprise to me that when someone marries (in England and Wales) their will becomes void. With many older people remarrying it is important that they remake their will after they marry. Otherwise, children who were named in the earlier will may find that they have been excluded by the fact that, without a will all property will go to the new spouse, who can do what they wish with it. Indeed, if the new partner remarries, then dies, the property may then belong to someone who has no relationship to the children.

Winter Fuel Payment  Winter Fuel Payment is an annual payment to help people older people (or some on benefits) with the costs of keeping warm this winter. Please read the complicated criteria.

Since the European Court decision that insurance costs should not vary as to whether you are male or female became law in the UK insurers must charge the same regardless of sex.  This affects CAR and LIFE INSURANCE premiums and also the amounts that are paid as ANNUITIES. As a general rule female drivers will have to pay more and those applying for annuities will get less. But men purchasing an annuity are likely to get LESS. 

I am sure you know but: You can get free NHS prescriptions if, at the time the prescription is dispensed, you are:  

Watch out when completing benefit forms.  You can be fined if you complete a form and, as a result, get more than you are entitled to. This is NOT  is different for cases of fraud (which get much higher penalties).  No, this is just for careless mistakes or misunderstandings !  But DWP staff will not be fined if they make an error resulting in you receiving the incorrect amount !

AgeUK also have a series of videos by a financial advisor dealing with debt, annuities and retirement.   They have helped thousands of people gain extra benefits.

I was surprised to find that I had not got a link to one of the principal organisations which help Carers.  (checked 2019)

An AgeUK magazine suggests some pointers if you are considering a move to a care home :

Disabled Living Allowances there are some useful explanatory  (government) films about these with sound, subtitles and BSL  

The LaterLife site has produced a page on pensions at  Follow he links therein.

The Mail suggests the following links for financial help :  As a rule Org Uk addresses are 'not for profit'

SIPPs. SIPPs. One of the most tax efficient ways for under 75s to 'put something away' is via a SIPP (Self Invested Personal Pension). You choose where to invest your contributions from thousands of funds, shares, ETFs, investment trusts, bonds, gilts and cash. Contributions attract up to 50% tax relief – the higher your rate of tax, the higher the tax relief you receive. So someone who pays 16,000 into a SIPP and is on the basic 20% tax rate actually has 20,000 invested in their pension, as the taxman automatically adds 4,000. Higher and top rate taxpayers can claim back even more through their tax return –up to another 4,000 (extra 20%) for higher rate taxpayers and up to 6,000 (extra 30%) for top rate taxpayers. This means 20,000 in a pension could cost as little as 10,000! Most people can contribute to their SIPP up to as much as they earn - with an effective cap of 40,000 per tax year – and receive tax relief. Even non earners can pay up to 2,880, to which the taxman adds 720, to make a total contribution of 3,600. Hargreaves Lansdown is the UK’s largest SIPP provider and has been voted ‘Best SIPP provider’ by 'What Investment' readers for 6 years in a row. See the SIPP section of the Hargreaves Lansdown website for more information via

An article Entitled "Retirement Income Options" : See also  It suggests that the vast majority of people converting their pension fund into a lifetime income (an annuity) tend to just request it from their insurer.  They say this can be MUCH less (for life) than they can get from shopping around. But there are many alternatives to a standard annuity.  For instance, someone who is a smoker or who has other health issues may get considerably more.   Obviously the age of the person at commencement is an issue.  But also

Naturally any annuity that increases the financial commitment of the provider will reduce the amount received each year.  

So, as you can see, there is need for impartial advice when taking this important decision.
Better Retirement Group
Key retirement Solutions
Retirement Angels
Money Advice Service (Government booklet "Your Pension - It's Time to Choose")

The Gifted Housing Service. See Basically you gift your house to  the AgeUK charity in return for receiving :

A useful question and answer site on this very complex (and in many aspects still undecided) issue is at Many of the answers still say that we will have to wait until the Green Paper on pensions is issued - and when it becomes law.

A good site that deals with GRANTS of various kinds is at Check for the latest Benefits, Pensions and Jobs at Department of Works and Pensions page.

**IVPPs  Hargreaves Lansdown sent me information about Immediate Vesting Personal Pensions (IVPP) where people under 75 can arrange an annual pension payment at a far higher rate than is now available from savings. There is a limit each year that you can put away and the money is lost on death. The pension is taxable and, once committed cannot be withdrawn. But, if you feel you will beat the odds and expect a long life, this is where an IVPP would pay off handsomely !

Married Couple's Allowance  Click on You should be getting this tax allowance where at least one of a marriage or civil partnership was born before April 6th 1935.  For marriages before December 5th 2005 the allowance goes to the husband. (For marriages on or after that date the allowance goes to person with the higher income. 

Did you know that under section 187 of the Social Security Administration Act 1992: it an offence for banks to take bank charges out of the accounts of people who are on social security benefits. So, if your bank has taken charges out of your Benefits eg: if you are in receipt (and totally dependent on) of any of the following benefits.

There is a useful site at (free tax advice to older people by volunteers)Tel. 0845 601 3321 email They may even make home visits for disabled people

The current tax allowances can be seen at  (IHT, Income etc)

For older people a good site is the AgeUK site  or phone their SeniorLine on 0808 169 6565 for free advice on financial matters.

EQUITY RELEASE You can get a free booklet on this subject. The Mature Times guide, produced in association with In Retirement Services, is the first step to finding out. Call freephone 0800 082 65 70 quoting MATN080507.

Equity Release is where you release part of the value of your house but still remain in it. The money is then used for living or invested to produce income. No repayments have to be made until the person dies, when all the cash and rolled up interest is taken from the value of the house.  This would not be done whilst the spouse still lives in the house. The cumulative interest can mount up considerably over a period of years but the total sum will not exceed the full value of the house (so beneficiaries of the will will not be left with a debt)  It may be particularly suitable for people without dependents and who do not have children to which they wish to will the property or for single people who wish to reduce their IHT liability (see above). People on means tested benefits should be aware that these would almost certainly be affected.  Two alternatives to releasing equity are downsizing to a cheaper property and/or taking in a lodger.
Financial Mail also has a free guide called Home Truth  (Tel 0800 068 6065) .  The government's Financial Services Authority, now the Financial Conduct Authority ( also have one called Raising Money from Your Home. And IFA (Independent Financial Advisers) can put you in touch with members on 0800 085 3250 or   Norwich Union (Aviva) has launched an informative film (available in VHS or DVD format) available to consumers and intermediaries alike. To request a copy consumers can call 0800 404 7137.

Age Partnership is the UK's leading over-the-phone specialist in equity release.
Some equity release plans impose an early-repayment charge, so you could incur charges should you wish to pay them off before your death. However, like a standard mortgage, these will vary from plan to plan, reinforcing the benefit of Age Partnership’s specialist equity release advice before you proceed

Compare the entire Equity Release market at Key Retirement Solutions, the UK Equity Release specialists. They do a booklet about remortgaging to release money called Home Truths. Phone 0800 531 6027. But they ARE in the business and you may be also offered a 'no obligation consultation'. A basic consultation is free but if you require an in depth one they will charge and they will charge a percentage of any loan raised.

Check for Benefits, Pensions and Jobs at Department of Works and Pensions page.  

 A useful article  on you liability to pay for care is at

For other home care options see

Pensions :

An Independent Financial Adviser specialising in pension advice can be found at

State Pensions The many benefits available are too complicated to describe here.   

Anyone deferring drawing their state pension can get increases equivalent to 10.4% for every year that they wait, OR you can get a lump sum instead.  At current estimates this could be as much as 30,000 for five years' delay.  But be careful. Two out of every five people don't make it to 70 ! And, in some poor areas of the country this is as much as three out of every five. For longevity live in Cornwall !  

SOME PENSIONERS ARE MISSING OUT  You MAY be able to pay additional contributions to improve your basic pension but the rules are complex and you should study the above page and subsequent pages, especially "What if I have a gap in my qualifying record.?" In some circumstances payment can be accepted for years as far back as 1975. Do you think that your National Insurance contribution record might be incorrect ? Look at this site for an explanation as to what might have happened  In fact, because people may now have paid into multiple pension schemes it is easy to lose track of them. The Pensions Service 0845 6002 537 offers a free pension tracing service. They have a database of over 200,000 pension schemes.

For more information call the free phone line at Age Concern (now called AgeUK) on 0800 169 65 65 or the government Pension Credit helpline on 0800 99 1234 The Textphone number for deaf people is 0800 169 0133

The rules on Pension Credits are a little complex.  e.g. the description of what constitutes a partner.  The partner does not necessarily have to be over 60.  In addition benefits may be payable to people who have additional pensions such as annuities. One can get an estimate of how much you could claim (and get an application form) from the tax office or Citizens Advice Bureau. But don't delay. Back pay can be claimed but only up to a year before a claim.

Many disabled and elderly people are not claiming State Benefits which are theirs of right. Virtually all those in care homes will qualify for Attendance Allowance. Those needing help at home overnight, too, get a higher rate (and this is NOT means tested). In England, people with recognised medical need also qualify for a weekly payment from the NHS towards care costs.  It is in three bands (see the link below). The level of payment is very different in Wales, Northern Ireland and Scotland.  So much for a United Kingdom !  

COUNCIL TAX BENEFIT  In addition many people are missing out on Council Tax Benefit

******** is a charity which offers tax help to older people with a NET household income of under 17000 Phone : 01308 488066

From 2012 everyone in employment in large or medium sized companies has had the equivalent of 7% of their salary saved into a pension scheme, 4% of which will come from the employee. A problem for the government is whether this will be a disincentive to work and save.  As is the case now, people who saved hard for their retirement are penalised when it comes to means-tested benefits (from additional pensions to household expenses such as central heating installation and in many other ways). It has been the same since the introduction of the 'Welfare State' : if you waste your money during your life someone else will hopefully keep you in old age. I realise, however, that there are many people who have NEVER been in a position to save, even living frugally. This problem will never be resolved. One cannot, in a modern society, let people starve because they were not wise savers during their lives, as Malthus suggested. Our local workhouse still exists, but has been turned into modern flats !

See more on pensions, including SIPPS lower down

The endowment policy mis-selling scandal. Recently some very large organisations have had their knuckles rapped because of the 'shambolic' way in which they have been dealing with people who believe they were mis-sold endowment policies. In April 2011 the high court ruled that the banks must take responsibility for this mis-selling. They are bound to appeal as the cost runs into billions.  But it does seem likely that the majority of cases will be in favour of the customer 

If you think you were mis-sold an endowment policy e.g. one that was supposed to cover your mortgage, you can ask an Endowment Investigation Company to take up your case for you.  But they will charge a percentage of what you are awarded. This can vary between 10% and 50%!  Or you can follow the procedure suggested in Financial Mail.

The Financial Ombudsman  If you feel that you have exhausted all possibilities when dealing with a financial organisation you can consider complaining to the Financial Ombudsman at


Remortgaging  Impartial booklet from
The cheapest way to borrow money - for house owners - is still to re-mortgage. Vast sums are being borrowed in this way (mortgages represent the vast majority of the trillions that we owe in the UK). A number of Building Societies will lend money to Owner Occupiers at reasonable rates, keeping the same rate for a year or so. But see the Sunday Telegraph or Mail for the fees charged and whether there is a tie-in period ('redemption penalty') after this initial low rate. Those which don't tie in may still charge a low rate. But compare this with other forms of longer term borrowing and you can see the advantage of remortgaging.  With deals like Intelligent Finance  Natwest or (RBS) you can reduce mortgage payments even further by linking your current account to the mortgage, so you only pay interest on the balance. It is a question of whether you are prepared to put the house up as collateral or are keen to keep the house value intact.  There may be an arrangement fee, which would make it uneconomic if you are borrowing a smaller amount.  It is difficult to imagine why ANY house owner would borrow large sums on credit card and store cards at their high rates.

Independent Financial Advice?  It may be independent but it isn't free.  Advisers have to earn a living and they will want you to buy something that pays them a commission. Purchasing Unit Trusts, for instance, involves initial charges and it is from these that the adviser gets his cut. Try  or  Free investment guides are also obtainable from  


 GARS ? Another guarantee to mull over.  During the 70's and 80's, when insurance companies were rich and optimistic (and people were not stubbornly living to 84 and 87) hundreds of  thousands of policies were sold on the basis of a GAR or Guarantee Annuity Rate with a minimum lifetime income promised. Although at least one insurance company tried to wriggle out of its contract (and was slapped down in the High Court) other companies are only giving policyholders a limited period in which to claim their GAR, resulting in a substantial loss of income for life if they fail to reply.

Life Insurance (generally for younger people). This is  another area where it pays to shop around. A broker, such as Cavendish Online may find you a better deal than going to one particular company. In fact it can save you thousands over a period of 20 years.

Cashing Endowments
If you are thinking of cashing in an endowment policy and it is worth over 2,000 you will find that you get a better deal by selling it as a 'going concern'.

Also have a look at (0845 20 20 200).  But not all policies are easily sold.  You need to shop around and it may be worth considering 'freezing' the policy rather than just cashing it in, which almost inevitably results in a poor deal.

They also have a 1 explanatory booklet

Finding a map to guide you through the new pensions maze can be challenging

The pension fund freedoms, allowing savers to treat their pension pot as a bank account from April 2015 were revolutionary. But what does this mean? What can people do with their new freedoms? How do they find their way through the ever-expanding pensions maze?


To help spell out the options, we'll take the case of someone with 100,000 in their pension pot, aged 55-plus. Under the chancellor's new rules this person is now allowed to withdraw the first 25% tax-free - and is wondering how to make best use of the remaining 75,000.

I want to take it all now

The tax situation
The big issue with the above plan is the amount of tax you will have to pay immediately. Your pension money will be treated just like any other earnings in that tax year. During the 2015-16 tax year, a person wanting to take all their 100,000 pension pot will have a taxable income of 75,000 after taking the first 25,000 tax free. Assuming they also have a state pension worth 5,500, that will be a total income of 80,500 for tax purposes.

For 2015-16, the first 10,500 is tax free. They pay 20% tax on the next 31,785 (totalling 6,357) and 40% tax on the rest (another 15,286) - a total tax take of 21,643. So the person is left with 78,357 of the initial 100,000 to do with as they please.

What you can do

1. Buy to let: As soon as the chancellor said that no one would be forced to buy an annuity, it was anticipated that money would flood into buy-to-let. But do the figures stack up?

Let's say you use the 78,357 as a deposit for a property. That will allow you to buy a two-bed flat priced at just over 250,000 with a 75% buy-to-let mortgage. On an interest-only basis, the loan will cost you around 500 a month.

You might pull in around 900 a month in rent, although that is likely to be hugely variable, while the typical management fee is around 10% of the rent. So you would pick up around 9,500 in rental income, minus the 6,000 in mortgage costs, leaving you with a net income of around 3,500 a year - taxable at your marginal rate.

There might be a capital gain when you sell the property, but that will be subject to capital gains tax. Still, an income of 3,500 a year off 75,000 is relatively attractive.

2. Put the money on deposit: You can earn up 2.5% interest on a fixed-rate bond if you lock away the money for five years. That is just over 2,000 a year, which is liable to tax. But you could move 15,000 into an Isa each year; after five years it will all be tax free.

3. Put it in a peer-to-peer account: These are the online operators who match savers with borrowers, and pay much higher rates than the banks - but crucially there is no compensation scheme. Zopa is paying around 5.2%, RateSetter 5.9%, Funding Circle 7.2%. Blend them together to obtain a rate of around 6% - equal to around 4,700 a year for someone with a 75,000 pot.

Don't throw all your pension cash into one of these companies, though. The concept is still relatively untested, but putting a portion of your money into a spread of providers may pay off.

4. Buy a Lamborghini: Pensions minister Steve Webb said that under the new freedoms people could buy a Lamborghini if they liked. But 75,000 will only stretching to a six-year-old Gallardo Spyder at best.

I want to draw down the money gradually

The tax situation

Once you have withdrawn the 25,000 tax free you are left with the 75,000, which is taxable as and when you draw it down for spending.

Let's say you have a state pension worth 5,500 a year. You also have a tax-free personal allowance of 10,500 for 2015-16. That means you can draw another 5,000 from your pension without paying a penny in tax. You could supplement that with money from the 25,000 tax-free lump sum.

What you can do

If you draw down 5,000 a year from your 75,000 fund the money should at least last 15 years - longer if it is invested wisely and enjoys some capital growth.

But let's say you can't live on 10,500 a year, and your typical spending is around 15,500 a year. You will need to draw down 10,000 a year from your pension fund. You will be taxed on everything above 10,500 a year, so 5,000 is taxable. This will be taxed at 20%, so you will lose 1,000 to HMRC (and your real income will therefore be 14,500 a year net).

Drawing down this sum will exhaust your 75,000 fund rapidly, possibly in seven or eight years. Capital growth will be limited, as the amount you are taking means there is little left invested. If you are retiring aged 66, you will be left with just the state pension by your mid-70s.

You don't have to take the tax-free lump sum all in one go. You can phase the withdrawal of the cash taking, say, 10,000 in year one, and 5,000 each year after that.

Remember to use your Isa allowance. A husband and wife have a 15,000 annual tax-free Isa limit. They can both open Isas, and if they are not spending their lump sum immediately, they can put it into these accounts. The money can be drawn and spent at any time and the interest earned remains sheltered from tax.

What you can do with your 75,000 fund when leaving it invested: The fund will stay with the pension provider your company picked, unless you decide to move it to another provider. What you can do with the money will entirely depend on what the pension provider is offering - some will have extensive flexibility, others not.

Most providers will advise that the money is left in a low-risk fund that isn't much affected by the ups and downs of the stock market, maybe invested primarily in a mix of government and corporate bonds, property, and a small sum in shares.

Aviva, the country's biggest private pension provider, says it will tell savers how much they can realistically draw down from their fund without exhausting the money before they die. It may also recommend that savers blend an annuity with a steady drawdown of the money.

It says the money left in the fund is likely to be invested in a "cautious managed" fund or its "target return" fund, and is confident of obtaining around 5% over Bank of England base rate. That suggests 5.5% a year for now, or more like 4.75% after charges. For a 75,000 fund, that suggests an income of around 3,500 a year, which will be liable for tax at your marginal rate.

Wildcard - do equity release: Why not use your home as a pension when you reach your 70s or 80s? At 75 years old, a pensioner can release around 125,000 from a 300,000 home. Add that to the state pension and it could cover spending until death, and mean that the initial sum of money only has to cover spending until the age of 75. But it does mean little or nothing will be left to your heirs.

I want to play it safe

What you can do

Buy an annuity: Everyone hates annuities, right? Maybe not. An annuity is a contract from a life insurance company to pay you a fixed income until you die. However, not a penny goes into your estate when you die, leaving nothing for your heirs. If you kick the bucket the day after you take out the annuity, bad luck, the money stays with the insurance company.

But despite the prevailing dislike of annuities, some people will prefer the security they offer. If you are 65 years old and take the 25,000 tax-free lump sum, and then shop around for the best annuity quote, you should be able to obtain an annuity of around 4,350 a year.

Let's assume you have a state pension worth 5,500 a year. Adding the 4,350 a year in annuity payment will mean you stay within the 10,500 personal allowance for 2015-16, so you pay nothing in tax. But you will have to live on just 9,850 a year, which won't be enough for many, if not most, people.

The above example is for a basic "level" annuity. The returns are worse if you choose to have an annuity that continues to pay an income to your partner after death, or if you opt for some level of inflation protection.

You can, however, obtain a higher income in two ways. First, have you been a smoker, or are you seriously overweight? If so, you can obtain an enhanced annuity - because the insurer calculates you won't live as long as other people. For a 75,000 fund, an enhanced annuity will currently pay around 1,000 more a year, at 5,350.

Secondly, you can opt for an "investment-linked annuity", where you are paid a higher income, increasing over time, but with the sum paid based on the performance of shares, bonds and other assets. The risk, though, is that the income can go down as well as up.

A mix and match approach: Financial advisers are recommending that savers should consider buying an annuity to cover the basics in life - gas and electricity bills, council tax, basic food and drink spending etc - and then keep the balance of their retirement savings in a fund to draw down when they want.

This will work best for people with larger amounts of pension savings. Let's say you have a pension pot of 200,000. You take 50,000 as the tax-free lump sum, and have 150,000 remaining. You reckon your basic expenses are 12,000 a year, so you need 6,500 in annuity income on top of your 5,500 state pension.

This will cost you just over 100,000 to secure, leaving you with up to 50,000 in the fund to draw down as and when you need it. But as your income is above the 10,500 personal allowance, sums above that will be subject to income tax at 20%.

Wildcard - defer your state pension: You can put off claiming your basic state pension, and in return the government will pay you a larger state pension in later years. What some pension advisers are recommending is that on retirement people should use their tax-free lump sum to live on for a few years, then start taking their state pension.

What does it mean in pounds and pence? Let's say someone is eligible for a state pension of 155 a week, which is equal to the "single tier pension" the government is proposing to introduce, worth 8,060 over the year.

Deferring for a year would mean the person would start getting 8,527.48, or 163.99 a week - an increase of 467.48 every year from then on. The difference will really add up over several years.

But advisers only recommend deferring the state pension if you are in good health and expect to live well into your 80s - and you should be aware that it may have an impact on means-tested welfare benefits, such as help with your rent, housing benefit, pension credit and council tax reduction.

I want to help my kids and grandchildren, and leave an inheritance

What you can do

This is a tough one. The size of pension pot saved here is scarcely enough to afford a decent income in retirement, let alone fund other people, and the reality is that many people will spend their final amounts of cash on care home costs. But here are a few options.

Gift the tax-free lump sum: Under the new pension freedoms, anybody is able to access their pension fund from the age of 55, even if they remain in work and are still contributing to the pension. Let's say Tim has accrued 100,000 into his pension by the age of 60, and his daughter Catherine, 30, is struggling to get on the property ladder.

Even though Tim is still at work he is free to draw down 25% of his fund as a tax-free lump sum - in this case, 25,000. If he then gives the money to Catherine, she can buy a house worth 250,000 with the 25,000 as a deposit, and take out a 90% mortgage to finance the rest of the purchase.

It's a very generous thing for Tim to do - he is "crystallising" his fund for tax purposes, which means he'll get little more in the way of a tax-free lump sum, and he will be left with only 75,000 to live on in retirement, plus whatever he manages to save before he finally retires.

Leave part of your pension fund as an inheritance: In September, chancellor George Osborne said he would abolish a "death tax" on pension pots, promising that 320,000 households would benefit. It means that from next April, anyone who has not touched their savings will be able to leave them as an inheritance.

Advisers Hargreaves Lansdown say that for anyone who dies under the age of 75, "any beneficiary can inherit some or all of your remaining fund, tax-free. They can do what they like with it. This is a major change."

The key thing, though, is leaving your fund "uncrystallised" - in other words, some or all of it is left with your pension provider, and with the tax-free lump sum not withdrawn. Only the better-off will be able to afford to do this.

If you die after the age of 55, any beneficiary can inherit some or all of your remaining fund as a lump sum. "They can keep it within a pension, and pay income tax at their highest marginal rate (ie, up to 45%) on the income they choose to withdraw, whether this is paid as a one-off lump sum or as a number of payments," says Hargreaves Lansdown.

In other words, if Tim dies aged 85 he can pass his pension fund to Catherine, then aged 55, and so long as she keeps it within a pension, she will only pay tax at her marginal rate when she accesses it.

Inheritance tax on your assets: Currently inheritance tax has to be paid at 40% on any assets over 325,000 for individuals and 650,000 for couples. This week David Cameron said he would like to ensure that only the "very wealthy" pay inheritance tax.

But in truth relatively few pensioners will ever see their heirs having to pay inheritance tax. Despite numerous campaigns about the "Middle classes facing an inheritance tax timebomb" (Telegraph) and the "Outrage at tax swoop on grieving families" (Express), the facts are that 96 in every 100 people don't leave enough money for there to be any inheritance tax to pay, with nursing home fees eating into any capital that they had. Meanwhile the very wealthy use trusts and "exempt transfers" to ensure their assets are passed on without tax to pay.

ADDITIONAL NEWS : At the moment, a member of a defined contribution (or “money purchase”) workplace pension scheme who leaves after more than three months but less than two years may be entitled to receive a refund of the contributions they have paid in – in some cases with interest on top. This is known as a “short service refund”.
The government has announced that from October 2015 this practice will be banned, because ministers are concerned that, with people switching jobs more regularly, those who keep obtaining refunds will be left with little or nothing for their retirement.
Oh dear! Mr Osborne has suddenly found a weakness in this pensions free for all !  When it comes to cash, people want it NOW and the future (or the taxpayer) will take care of itself!

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