Policy

Banking reform consultation: Age Concern response

Age Concern has responded to a banking authorities’ consultation on reforming the framework for ensuring financial stability and depositor protection. Although we support moves to increase compensation limits, the scope of compensation and protection for balances above any compensation limit are equally important. Compensation limits should be separate for each banking ‘brand’, not ‘per person, per bank’ as currently. Failure to achieve a seven-day target for compensation payouts could lead to extreme hardship for the most vulnerable. The government should also pursue a back-up system for getting cash quickly to those in hardship.

Age Concern submission to joint consultation by HM Treasury, Bank of England and Financial Services Authority: Financial stability and depositor protection – further consultation.
Tel: 020 8765 7589 (Maggie Lucas, Policy Unit, Age Concern England)

Benefit changes and government response to inquiry

The government has published regulations on changes to income-related benefits from 6 October 2008, and its response to the Social Security Advisory Committee’s proposals.

• For people over 60, the maximum period for backdating Pension Credit, Housing Benefit and Council Tax Benefit will be reduced from 12 to 3 months. They will receive Pension Credit for up to 13 weeks during a temporary stay abroad. 
• For people under 60, the maximum backdating (which is subject to good cause provisions) will be reduced initially to 6 months and later to 3 months.

The Social Security (Miscellaneous Amendments) (No.4) Regulations 2008. (S.I.2008 No.2424)
(scroll down to Pensions and Older People box)
Tel: 0845 702 3474 (Stationery Office) 


Debt among equity release applicants: KRS analysis

Analysis by Key Retirement Solutions, a specialist firm of financial advisers, has found that people who bought equity release schemes from them in 2007 had significant amounts of debt. Almost a quarter had outstanding personal loans averaging £8,766, while a fifth had outstanding card debts averaging £8,358. Average outstanding mortgage debt was £37,316.

Key Retirement Solutions press release, 12 August 2008
 

Equity release made easy: Age Concern guide

Age Concern has published a new guide for people who are thinking of using equity release to draw on the value of their home. It gives an impartial explanation of the various types of equity release scheme, the alternatives available and where to go for help and advice.

Equity release made easy.
Tel: 0870 442 2120 (Age Concern books)
 

Improving financial capability: FSA research

The Financial Services Authority (FSA) has published research on the likely impact of financial capability initiatives, based on a London School of Economics review of behavioural economics literature in this field. This finds that low financial capability has more to do with psychology than knowledge. Two areas of work appear to be most promising:

• using ‘norms’ (directing people to a particular action such as higher saving); and 
• active intervention by a counsellor and/or individualised advice, rather than passive information or education.

Financial capability: a behavioural economics perspective. FSA consumer research paper 69, July 2008

Increase in statutory legacy for spouses and civil partners: MoJ announcement

The Ministry of Justice has announced increases in the amount payable to a surviving spouse or civil partner from the estate of someone who dies ‘intestate’, ie without leaving a valid will. From 1 February 2009, the statutory legacy for a spouse or civil partner will increase from £125,000 to £250,000 where the deceased has surviving children. If there are no children, the spouse or civil partner will receive £450,000 (currently £200,000).

Ministry of Justice press release, 28 August 2008


Pensions in small firms: ACA survey

The Association of Consulting Actuaries (ACA) has published a survey showing that employees in small firms (250 employees or fewer) are not generally well covered by pension arrangements. Only 45% of firms who responded said that they offer all their employees a scheme that is at least as good as the forthcoming personal accounts scheme. From 2012, firms who do not offer a minimum standard of pension will have to enrol their employees in the personal accounts scheme (unless the employee opts out).

2008 Smaller firms pension survey, report 1.
Tel: 020 7382 4594 (Association of Consulting Actuaries)

Proving your identity: Toynbee Hall guide

Difficulties in providing proof of identity can be a barrier to accessing services such as banking. Toynbee Hall’s SAFE (Services against Financial Exclusion) project has published a free guide, detailing different ways of proving identity. The comprehensive ID Guide covers identification and address verification documents for accessing banking, benefits, health services and housing.

ID Guide: how to prove your identity.
Tel: 020 7392 2954 (Toynbee Hall)


State Pension forecasts

The Pension, Disability and Carers Service is now able to provide state pension forecasts again by post, telephone or online, for people reaching state pension age both before and after 6 April 2010. The service for people reaching state pension age after 6 April 2010 had been temporarily suspended while systems were updated to take into account forthcoming changes in legislation.

Pension Service letter to Age Concern, 3 September 2008.
Tel: 020 8765 7589 (Maggie Lucas, Policy Unit, Age Concern England)

Unbanked households: Treasury statistics

The Treasury published data in July 2008 showing a slight rise in the percentage of households without access to bank accounts, from 5.1% in 2005-06 to 5.3% in 2006-07. Further analysis will be published by the Financial Inclusion Taskforce later in 2008.

Progress towards the shared goal on access to bank accounts. Online information.


Valuing carers: Work and Pensions Committee Report

The House of Commons Work and Pensions Committee has published a report following its inquiry into the government’s strategy for carers. Age Concern gave written and oral evidence to the inquiry. The Committee is disappointed that benefits for carers were not directly addressed in the strategy. It argues for a new system of support providing an income replacement benefit for those unable to work, and compensation for the additional costs of caring for all carers with intensive caring roles.

Valuing and supporting carers. Work and Pensions Committee 4th report.
Tel: 0845 702 3474 (Stationery Office)


Winter fuel payments 2008: DWP announcements

The government is running a publicity campaign to inform people about this year’s winter fuel payments. As announced in the 2008 Budget, people aged 60 and over will receive an additional one-off payment of up to £50 (up to £100 for those aged 80 or over) on top of the standard payments of £200 for households aged 60-plus and £300 for those aged 80-plus. Cold Weather payments, paid to people receiving certain benefits such as Pension Credit in weeks when the temperature is very cold, will rise from £8.50 to £25.  

Department for Work & Pensions press release, 22 August 2008

 

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