Money: Allowances for Pensioners – What are you entitled to?
Most people, as they start to approach retirement age, will take the opportunity to literally ‘take stock’. To review their finances, their assets, their debts, to really weigh everything up and ensure they are in a position to be able to enjoy their retirement.
Generally, the process will include reviewing their pension arrangements, investments, making sure ‘affairs are in order’, perhaps considering an equity release mortgage, all in the name of producing a comfortable monthly income when they stop receiving payslips.
Often, the process can be alarming. Retirement can be much anticipated, the freedom from the 9-5, the time to travel, or pick up an old hobby you’ve been too busy to make time for. Having time to visit family, spruce up the garden; perhaps redecorate so you can entertain friends in style.
With so much to look forward to, it can come as an unwelcome surprise to realise your monthly income will reduce so drastically, and so begins the task of re-jigging finances and taking measures to compensate for the lost income.
Before you start considering downsizing or selling off heirlooms though, make sure you have thoroughly researched all the allowances that are available to you as a pensioner. And more importantly, make sure you are claiming everything you are entitled to – you’ve earned it!
For some, the word ‘benefits’ has unpleasant connotations, and for many who have worked all their lives and saved for retirement, it may not even have crossed their mind. But it should! However well prepared you are for life after employment; it is worth making sure that you are fully utilising all that is available to you. Those ‘little extras’ can quickly add up and make a world of difference to your retirement years.
Obviously, the most well known of all allowances for pensioners, is the state pension. The amount you receive depends on your situation, but everyone of qualifying age is entitled to something, so make sure you’re claiming!
According to Age UK, around 4 million older people are entitled to Pension Credit, yet 1 in 3 of those eligible is still not claiming.
There are two sorts of pension credit, and you may qualify for one or both. The first is Guarantee Credit, which tops up your income to a minimum level as set out by the government, and the second is Savings Credit, which is extra money for people whose income is higher than the basic state pension or who have smaller savings.
Increased Personal Allowance
Income received in retirement – from both state and personal pensions, is taxed, but over 65s are entitled to an increased personal allowance – ie. The amount of money you can ‘earn’ before paying tax, is increased. Making sure you are up to date & being taxed correctly is important, and could help increase your income.
Council Tax Benefit
Council Tax Benefit can be claimed whether you own your home or rent. It is a means tested benefit though, dependant on your income & savings. Usually, you need to have less than £16,000 in savings to qualify, but it is certainly worth checking as it can cut your annual bill by around £728.
Even if you don’t apply for benefit, you can claim a single person’s allowance if you live alone, and reduce your bill by 25%
Up to 380,000 older people who are entitled to housing benefit, are not claiming it.
Again, it is a means tested benefit, and only applies to those who are renting, but could contribute to not only the rent you pay, but also any service charges such as lifts and communal facilities.
Everyone over 60 is entitled to free prescriptions and eye tests. You might also qualify for help with dental treatment, glasses, and even help with costs of getting to and from hospital.
Before paying for any treatment, be sure to consult your doctor/optician for advice as to what you may be entitled to.
Of course many of us enjoy good health well into, if not all through our retirement, but if this is not the case, there may be help available.
There are two main benefits, Disability Living Allowance and Personal Independence Payment. Neither are means tested, and in fact making a claim could allow you to also benefit from other allowances, so it is well worth seeking advice.
Allowances and benefits also exist should you or your partner need care – either from each other (Carers Allowance), or from an external source (Attendance Allowance), so be sure to seek advice should you need to.
Your retirement should be the pay off for all the years you have worked, a time to be enjoyed. Along with your own preparations, there is help available, but with the legislation and so on surrounding allowances constantly under review , even the most finance savvy pensioner (or pensioner to be), can be left feeling somewhat lost.
If you are in any doubt as to what you are entitled to, seek advice. It could mean the difference between a penny-pinching retirement and one with the freedom to enjoy as you wish.