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Making the most of your money - ACIG09

Many of us face a drop in income when we retire. Even if you have a reasonable income from your pensions and other investments it still makes sense to review your outgoings.       Smiling man

You can make your money go further by looking for the best deals in what you buy‚ taking advantage of any benefits or concessions you qualify for and looking at how you might otherwise increase your income.  

The information given in this guide is applicable in England and Wales. Different arrangements apply in Northern Ireland and Scotland. Readers in those countries are advised to contact their national Age Concern organisations for further information.

You can download our free information guide from the top right corner of this screen.

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Help with the cost of living

Many retired people do not claim all the benefits that they are entitled to. Make sure you do: benefit rules are not needlessly generous so if you qualify for any help you should take up your entitlement. There are two main types of benefits: means-tested and non means-tested.

Means-tested benefits are paid according to the size of your income and savings. They include Pension Credit Guarantee Credit‚ Housing Benefit (for rent costs) and Council Tax Benefit. Even if you do not qualify for the full benefit you may be able to claim some help. There's also a Pension Credit Savings Credit to assist people with modest savings and private pensions. If you qualify for a means-tested benefit this can help you establish eligibility for other concessions such as help with health costs.

Most people aged 60 or above are eligible for a Winter Fuel Payment to help with their heating costs – this is not means-tested.

What next?Contact your local Age Concern to arrange a benefits check to identify your entitlements. The Age Concern website at has an online benefit calculator to check your entitlement.

‘Before my local Age Concern gave a talk about benefits I had no idea I could get any help towards my Council Tax. I own my home and I thought it was only paid to people who rent. Age Concern helped me to make a claim and now I’m much better off.’

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Help with the costs of disability

Attendance Allowance is a benefit paid to people aged 65 or over who have personal care needs or who need ‘watching over’. Personal care includes help with activities such as washing‚ dressing‚ going to the toilet or getting round the house. Attendance Allowance is not means-tested so your savings and income do not affect your eligibility.

There is a similar benefit called Disability Living Allowance (DLA) for people who are under 65. It also includes a mobility component for people who have great difficulty in walking or cannot walk at all. It has to be claimed before you are 65 but can continue after that age.

what next?
Contact the Age Concern Information Line or visit the website to order a free leaflet on how to claim Attendance Allowance.

For more detailed information see our Factsheet:

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Help with health costs

Everyone aged over 60 gets free prescriptions and eye tests. If you have less than £16‚000 in savings you may be able to get some help towards dental treatment‚ glasses and travel costs to hospital.

what next?Ask your dentist‚ optician or hospital staff for advice before paying for treatment. The HC1 form can be used to claim help with prescriptions; NHS dental treatment; NHS wigs and fabric supports; sight tests‚ glasses and contact lenses; and travel to hospital for NHS treatment. There may be other ways of getting help if you have certain medical conditions.

For more detailed information see our Factsheet:

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    Help with heating

    You may be able to get a grant to improve your heating system and home insulation. In England these are called Warm Front grants. Homeowners and tenants aged over 60 can apply for a grant but eligibility is means-tested. If you do not qualify for a grant‚ you may qualify for a smaller rebate against the cost of heating and insulation work. There are similar schemes in Wales‚ Scotland and Northern Ireland.

    what next?Contact Warm Front for further details about heating grants.

    For more detailed information see our Factsheet:

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    Changing your gas and electricity supplier

    Energy costs have risen sharply in recent years but you may be able to save some money by changing your energy supplier. You still use the same gas pipes and electric cables. The change will be which company sells you fuel and sends you bills.

    Prices are not the only reason to switch. Check which energy suppliers offer special discounts‚ such as dual-fuel discounts‚ or other services‚ such as cheaper telephone charges.

    what next?Contact Consumer Direct for further information on switching energy suppliers. The Energy Saving Trust provides information and tips on how to reduce your energy use and so save money.


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    Winter Fuel Payments

    Winter Fuel Payments are paid to most people aged 60 or over. For winter 2008/09 the payments are £250 for each household that qualifies and £400 when someone in the household is aged 80 or over.

    what next?
    Contact the Winter Fuel Payment helpline for more details. Contact Age Concern to order Winter wrapped up‚ a free guide to coping with cold weather.

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    Your telephone service provider

    You may be able to save money by changing telephone service provider. Look at the costs of the line rental‚ calls and connection charges‚ and check what discounts are available‚ how many calls you can make for free and what type they are – international‚ national‚ local. There are also deals that include ‘broadband’ internet access.

    Check the bill payment options. Companies increasingly offer cheaper tariffs or discounts if you pay by direct debit. If you do not want to do this‚ check what the alternative pricing and payment options are.

    Each company has a code of practice covering issues like repairs‚ maintenance and disconnection.

    If you change provider‚ the new contract will often be for 12 months but there should always be a ‘cooling off’ period‚ in which you have the right to change your mind.


    what next?Ofcom produces guides on price comparison and the different telephone service providers.


     

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    Water meters

    If you have a big home with few occupants you may save money by installing a water meter. They are usually installed free for domestic customers but water companies can refuse to fit a meter if it is too expensive or difficult.

    It may be beneficial to switch to a meter if:

    • you use very little water
    • your property has a high rateable value
    • you want to control how much water you pay for.

    what next?
    Websites such as buy.co.uk and uswitch.com can help you estimate whether a meter would help you cut down on your bills.


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    Getting the best insurance deal

    If you have been with the same insurance companies for many years‚ you may be able to save some money by checking out what other insurance providers are offering. Always make sure that you will be able to get new cover before cancelling your existing policy – some travel and motor policies have age limits. Check the details of policy conditions to make sure that cheaper options offer the same level of cover‚ excess payment and support.

    An insurance broker can help you compare options‚ but you should check how the broker’s fees are covered and how wide a range of providers they consider.


    what next?Contact the Association of British Insurers for further information on buying insurance.
     


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    Cutting the costs of travel

    Once you are aged 60 you become entitled to a travel pass for free off-peak travel on local buses anywhere in England. This is the minimum concession that can be offered. Your local authority may have a wider ranging scheme‚ perhaps covering local rail services‚ trams or peak travel. If so‚ a charge can be made for the pass‚ provided a free pass is still offered for the minimum concession. Similar schemes operate in Wales‚ Scotland and Northern Ireland.

    what next?Contact your local council for details of the scheme in your area and how to apply. Contact details should be in your local phone book or ask your local Age Concern.

    For more detailed information see our Factsheet:

    Anyone aged 60 or over can buy a Senior Railcard. With it you can save up to one third of the cost of most rail fares in Great Britain. There is a modest charge for the card but the savings can outweigh this cost in one or two trips‚ depending on the length of the journey.

    what next?
    Further information about the Senior Railcard is available from railway stations‚ rail-appointed travel agents or by visiting the website at Senior Railcard.

    Concessionary fares are also available for coach travel. You may qualify for a discount on the cost of your ticket by showing your local authority travel pass. The scheme is voluntary but National Express and a number of other coach companies are part of it. Ask for details when you book your ticket.


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    Television licence concessions

    TV licences are free for households with a person aged 75 or over. People who are registered blind can get a 50% reduction. There is also a £7.50 concessionary licence for people who live in care homes or certain sheltered housing schemes.


    what next?Contact TV Licensing for further details on TV licence concessions.


     

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    Education and leisure

    Much of this guide is concerned with the necessities of life such as housing and utilities. For a good quality of life we also need access to enjoyable activities and treats – here are some suggestions.

    • If you want to learn a new skill or follow up an interest‚ remember that people over pension age generally get concessions for the cost of adult education classes and leisure facilities. Check your local colleges‚ libraries and education authority for what is available.
    • Reduced-price tickets are often available to older people for the theatre‚ concerts and at galleries and other attractions. Ask your local venues or mention that you are over pension age when you make a booking.
    • Businesses are not obliged to offer discounts to older people but many do‚ particularly at less busy times. Hairdressers‚ restaurants and pubs may all have special deals. Keep an eye out for discounts and offers and don’t be afraid to ask – in the current climate most people are looking to save money where they can.

    case study
    John‚ 70‚ retired from his own small business three years ago…

    'My wife Gill and I made sure that we are reasonably well provided for in our retirement but we still like to check we’re using our money smartly.

    ‘It’s funny but although I was used to looking for the best value suppliers for my company‚ I’d never really done the same at home. It’s partly habit‚ I suppose – for most of my life there was only one place to get your power or phone services. It was only after I retired that I looked into whether I was getting the best deal. We changed gas and electricity suppliers‚ but not just for the sake of it. Our current phone company seemed best for us so we stayed with them.

    ‘I had a few different jobs before I set up on my own. When I looked into it I found that I had a small works pension due to me from one of them. It’s not a huge amount but it’s worth having. I felt a bit silly asking at first‚ as I’d mislaid the paperwork‚ but I’m glad I did.

    ‘Gill wants me to start trading on internet auctions. She’s probably dropping a hint about my football programmes. I might give it a go: I enjoyed being in business and it might be quite good fun.’

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    Tracing old pensions

    If you moved between jobs while working you may have a pension with more than one employer. You may also have taken out one or more personal pension plans. Write to the administrators of each of the pension schemes asking for your pension to be paid.

    Your previous employers or pension providers may have moved‚ changed names‚ closed down or merged with other companies. If you have lost track of a company that may owe you a pension‚ it may still be possible to find and claim this money. Collect together as much information as you can about the company and its activities.


    what next?Contact the Pension Tracing Service‚ who will check the information you provide against their database of pension schemes to try and find yours.

     

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    Tracing bank and building society accounts

    If you have mislaid details of savings or other bank or building society accounts‚ there are account tracing schemes that can help you to locate your money.


    what next?If you think you may have unclaimed assets in a bank or building society you can make a single online application to have your account traced at My Lost Account. Alternatively contact the British Bankers’ Association and/or the Building Societies Association for details of how to make a postal application.

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    Are you paying the right tax?

    Your personal Income Tax allowance (the income you are allowed before paying any tax) increases when you reach 65 and again at 75‚ although this extra allowance can be reduced if your income is above a certain level. The State Retirement Pension is paid with no tax deducted but it is taxable. Any tax due on it will be collected from your other income sources or through the self-assessment system.

    You are allotted a tax code to tell your pension provider‚ or other source of income‚ how much tax to deduct. There is no guarantee it will be right‚ particularly if you have more than one pension. Check that you are getting the correct allowance and that you have the right tax code. You should be able to find your local Tax Enquiry Centre in your local phone book or by visiting the website for HM Revenue and Customs.

    Make sure you are not paying any more tax than you have to. A financial adviser may be able to suggest how you can arrange your financial affairs to minimise your tax liability. Interest on savings is usually paid with tax deducted but can be paid without the deduction if you are not a tax payer. Ask your bank or building society for a form. If you have overpaid tax‚ you can reclaim the overpayment for up to six years.

    what next?Age Concern publishes a free guide‚ Your tax health check. Call the Information Line or visit our website to order a copy. TaxHelp for Older People provides tax advice for older people who are not able to afford to pay for a specialist adviser.

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    Releasing your home's equity

    Older homeowners may be able to release part of the value of their home as income or a lump sum. For some people this can be a useful way of freeing up extra money but there may be drawbacks. Any money released may affect your eligibility for means-tested benefits.

    The final amount to be repaid may seem high compared to what you received. The money is usually repayable when your property is sold so what will happen if you need to move house? It may be better to move to a smaller property now and invest any money left over from the sale of your current home.

    what next?We strongly recommend that you take independent legal and financial advice before deciding to release equity from your home. Age Concern publishes a book‚ Equity release made easy‚ which explains all the questions you need to ask.

    For more detailed information see our Factsheet:

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    Inheritance Tax

    After your death‚ Inheritance Tax may have to be paid from your estate if its value is greater than a certain amount. In 2008/09 the Inheritance Tax threshold is £312‚000 and this is due to increase to £325‚000 in 2009/10. The rules around Inheritance Tax are complicated.

    If you are concerned that your estate will be liable for Inheritance Tax after your death‚ do not give away any assets or take any other action intended to reduce that liability without first taking specialist advice from a solicitor‚ accountant‚ tax adviser or an independent financial adviser.

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    Making the most of your savings

    Banks and building societies sometimes change the interest rates on their accounts or introduce new ones with better rates. Ask your bank or building society about this. Personal finance sections in newspapers often include tables comparing available rates and there are websites that do the same.

    In this context investments should be treated differently from savings. Shares and unit trusts are examples of investments. These may involve a higher level of risk than placing your money into a savings account or bonds with a guaranteed return.

    An independent financial adviser may be able to help identify how to arrange your savings and investments for the best return while restricting risk to a level you are comfortable with. Being called ‘independent’ does not necessarily mean that an adviser has access to all companies in the marketplace. Check what‚ if any‚ restrictions your adviser operates under and also how their fees are covered.

    Any plan should take account of your particular circumstances. It is usually better to reduce any debts before concentrating on increasing savings.

    what next?Contact the Financial Services Authority (FSA) for details of how to find an independent financial adviser. They also have booklets and factsheets including Raising money from your home and FSA guide to financial advice. If you are interested in a particular type of financial product‚ such as equity release‚ make sure the adviser you choose has relevant qualifications and experience.

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    Protecting your savings

    Recent events have made many of us question how safe our money is in banks and building societies but there are safeguards in place to ensure that you do not lose your money.

    You may be tempted to keep savings in cash at home. If you do‚ your money will be at risk from theft‚ fire or any other mishap that might befall your home. Your insurance may limit how much you can claim back. Cash kept at home will not gain interest and inflation will reduce its value in real terms.

    In the UK‚ the Financial Services Compensation Scheme (FSCS) is a statutory fund set up to compensate customers of authorised financial services firms if a firm is unable to pay claims against it‚ for example if a deposit taker (bank or building society) is unable to repay its depositors (including you).

    • Savings of up to £50‚000 per person with each UK-regulated bank or building society are guaranteed (or £100‚000 in a joint account) should the firm fail. If you have more than £50‚000 in savings it may be a good idea to spread it between different institutions.
    • If two or more firms are owned by the same parent company‚ you may only be able to claim £50‚000 in total for accounts held across the group. Check the ownership of banks and building societies you have accounts with.
    • The FSCS will offset any outstanding loans with the institution against your savings before compensation is paid out or reduce your loan accordingly. It may be advisable to have loans and savings with separate institutions.


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    Making the most of the internet

    The internet can be very useful for buying and selling goods and services. If you do not have access to the internet‚ or are unsure how to use it‚ there may be local schemes to help you get online. Contact your local Age Concern to see if they run introductory internet sessions. Libraries may offer free internet access. If you are using a public computer‚ make sure that it has the necessary level of security protection before you enter any personal or financial information.

    Many retailers and service providers now offer their best deals online. There are also websites where you can compare a range of prices for a product or service. Look for feedback about sellers on independent websites and always read the small print before you commit to buying something.

    You can use internet auction sites such as eBay to sell your unwanted goods or trade collectibles and other items. Many people find this an enjoyable hobby as well as an opportunity to make some extra income. In becoming a seller‚ you will take on certain responsibilities. Make sure that you understand and are happy with these before you proceed.

    what next?Go to the Consumer Direct website for more useful information on how to shop safely online. Age Concern publishes a book‚ How to be a silver surfer‚ that explains how to get the best from the internet.

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    Managing your debts

    Making sure that any debt issues are under control should be a priority in any review of your finances. Seek advice from an independent advice service such as the National Debtline. Be wary of the claims made by debt adjustment companies offering to tidy up or reduce your payments – the terms of this type of agreement are often very unfavourable.

    Good tips

    • Put together a list of your income and outgoings in a typical month and see what you can cut back on.
    • Look into moving debts to cheaper credit cards or loans.
    • Get in touch with your lender as they may allow you to pay your debt with smaller repayments at no charge.
    • Get a benefits check from an organisation such as the Citizens Advice Bureau.
    • Get in touch with your local advice agency. They may be able to help prioritise your debts‚ and write letters to creditors to negotiate smaller repayments without interest until your situation improves.

      You can get more tips on paying off your debts at Money Saving Expert.


    what next?Contact one of the organisations mentioned above or in the ‘Useful organisations’ section for further help and advice.


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    Useful organisations

    For more information and details for your local Age Concern in England‚ please call the Age Concern Information Line on 0800 00 99 66 (free call).

    Age Concern Northern Ireland
    Tel: 028 9024 5729 (national call rate)

    Scottish Helpline for Older People (Age Concern Scotland)
    Tel: 0845 125 9732 (lo-call rate)

    Age Concern Cymru
    Tel: 029 2043 1555 (national call rate)

    Association of British Insurers
    Provides information on insurance cover‚ including a leaflet specifically for older motorists.
    Tel: 020 7600 3333 (national call rate)

    British Bankers’ Association
    The leading trade association in the UK financial services industry. Includes an account-tracing scheme.
    Tel: 020 7216 8800 (national call rate)
     
    Building Societies Association
    The trade association for all the UK’s building societies. Includes an account-tracing scheme.
    Tel: 020 7520 5900 (national call rate)

    Citizens Advice Bureau (CAB)
    National network of free advice centres.
    For details of your local CAB call: 020 7833 2181 (national call rate) (this number gives local contact details only‚ not advice).

    Consumer Credit Counselling Service
    A charity giving debt-counselling sessions (lasting about two hours) in person or by phone.

    Consumer Direct
    Government-funded service providing practical consumer advice.
    Tel: 0845 404 0506 (lo-call rate)

    Energy Saving Trust
    Provides information on how to make your home more energy efficient.
    Tel: 0800 512 012 (free call) 
     
    Financial Services Authority (FSA)
    The FSA provides information on how to find and choose a financial adviser and can confirm whether your adviser is authorised. It also produces a wide range of materials on finance-related matters.
    Consumer Helpline: 0845 606 1234

    Financial Services Compensation Scheme (FSCS)
    Statutory compensation scheme for customers of UK regulated financial services firms.
    Tel: 020 7892 7300 (national call rate)

    HM Revenue and Customs (HMRC)
    Contact HMRC for more information about taxes. You should find your local Tax Enquiry Centre in your local phone book or on their website:

    National Debtline
    A national helpline and website for people with debts‚ giving self-help advice‚ counselling and support over the telephone. Sends out free information packs.
    Tel: 0808 808 4000 (free call)

    Ofcom (Office of Communications)
    The independent regulator and competition authority for the UK communications industries.
    Tel: 0300 123 3333 (lo-call rate)
    Textphone: 0300 123 2024 (lo-call rate)
     
    Pension Tracing Service
    If you think you may have an old pension‚ but are not sure‚ the Pension Tracing Service can usually trace it for you.
    Tel: 0845 600 2537 (lo-call rate)

    TaxHelp for Older People (TOP)
    An independent free tax advice service for older people on low incomes.
    Tel: 0845 601 3321 (lo-call rate)

    TV Licensing
    Processes enquiries and offers advice on applications‚ how to pay for your licence‚ renewal notices etc.
    Tel: 0844 800 6790

    Winter Fuel Payment helpline
    For information and application forms to claim the payment.
    Tel: 0845 9 15 15 15 (lo-call rate)

    Warm Front
    Scheme offering heating and insulation grants in England‚ run by the Eaga Partnership on behalf of the Government.
    Tel: 0800 316 2805 (free call)

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    What should I do now?

    If you would like more information on the issues in this guide please call the Age Concern Information Line free on 0800 00 99 66.

    The following Age Concern Information Guides may also be useful:

    You can order free paper copies of all our information guides through our online Information Guide order form.  

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    Related books

    Age Concern publish a wide range of  books for older people and those who work with and care for them. Browse our online bookshop. The following books may be of particular interest:

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