Banks and ageism
The banks and building societies have rejected a plan to ban ageism when it
comes to offering older customers credit. The proposal was made by banking
consultant Mike Young who was employed to review the Banking Code of practice
which they all follow when they deal with the public.
Over the years the Code has developed into a valuable tool to make the banks treat us fairly (though bizarrely they have delayed putting a clause at the top saying they will do just that). Every two or three years the Code is reviewed. And normally the recommendations for change are implemented. But not this time.
Mike Young – himself an ex-banker – made a straightforward recommendation "The Guidance should be amended to ban credit rejection simply on the grounds of reaching a certain age." But that was too radical for the banks.
Eric Leenders, Retail Director at the British Banker’s Association said "I don’t think that the banks feel there should be any discrimination of any kind and that includes age. But certainly the banks feel they should be able to make commercial decisions and take into consideration factors that they might feel are relevant; and…one of the factors could indeed be age."
The proposal put forward by Mike Young would, of course, have allowed that. It would only have banned discrimination solely on grounds of age. But it seems the banks and building societies want to retain the right to refuse credit to someone who is 72 just because they are in their seventies, no questions asked.
At the moment the age discrimination law only apply in the workplace and in job related areas. But the Government is consulting on a European plan to extend it to the sale of all goods and services as well – including insurance, borrowing and banking. This first skirmish doesn’t augur well for its success.
More tax on low incomes
The Government has admitted that more than five million households will be
worse off from April under changes announced in the Budget last March. Since
Saga Magazine covered this story in June the details of all the tax
allowances which will apply from April have been published and the effect of the
changes can be precisely worked out. These figures replace those in ‘Robin Hood
in Reverse’ (Saga Magazine June 2007). It is clear that unless there is a
radical change of heart by the Chancellor in his Budget next month people on low
incomes who are aged under 65 will pay up to £181 a year more tax from 6 April.
In his last Budget as Chancellor the Prime Minister Gordon Brown decided to reduce the basic rate of tax from 22p in the pound to 20p, the lowest it had been for seventy five years. But the £8 billion cost of making this radical change had to come from somewhere. And most of it came from scrapping the lower rate of tax on the first £2230 of income. In effect that doubled it from 10% to 20%. For most people the cut in the basic rate will save them more tax than the extra £223 tax they will pay due to the scrapping of the lower rate. But for people on lower incomes the extra 10% tax at the lower rate will cost them more than they save from the 2% cut in the basic rate.
As a result if your income comes from work and you pay National Insurance then you will be worse off if your income is between £5931 and £15,075 a year. If you do not pay NI (for example working women aged 60-64 or on a pension) then you will pay more tax if your annual income is between £5645 and £16,505.
The maximum loss will be faced by people with an income of £7455 a year. In 2008/09 they will pay £181 more tax on a pension or £152 more on earnings.
Anyone with higher earnings will generally gain. Those earning £34,840 will gain the most paying £395 a year less tax. And those earning £41,345 or more will save £297 a year. If the income is from pension alone then the maximum tax cut will be £788 a year for anyone with a pension of £41,345 or more
People who are aged at least 65 in 2008/09 will not be affected. They are being given a big increase to the income they can have before any tax is due. For those aged 65-74 the amount of tax free income they can have will be raised from £7550 to £9030 (and from £7690 to £9180 for anyone aged 75 or more). That will ensure that any loss due to the doubling of the lower rate is more than offset. These higher allowances are reduced when income exceeds £21,800 and disappear completely at an income of around £29,000.
Beware the ‘vultures’ circling your home
Housing organisations are warning older people to beware of companies which
offer to buy their home for cash as a way out of mortgage difficulties.
A growing number of people are getting into difficulties paying for their mortgage. In the first half of 2007 repossessions were up by 30% on the year before and 77 homes a day were being taken back by lenders from people who could not afford their mortgage payments. Even though interest rates have started to come down more than a million homebuyers coming to the end of fixed rate deals will have to pay more each month for their mortgage. That will hit many older homebuyers who find their age or changed circumstances mean they cannot remortgage at all or only by paying a premium rate.
Experts are concerned that they will fall prey to what one housing organisation has called "vultures" who offer cash for your home – usually within a few days – and then say they will rent your home back to you for as long as you like.
But there are two big snags. First, the cash is only about 80% of the market value of the property. And second, as a shorthold tenant, you will have no security beyond the first six months. Whatever verbal promises are made at the time the new landlord can throw you out within a year. And many do.
Adam Sampson, Director of the housing charity Shelter told Saga Magazine "These vultures are preying on elderly people in particular, who may have fallen into financial difficulty through bereavement or ill health. They exploit the vulnerability of these people by convincing them to sign up for what is plainly a very bad deal."
So never sell your house for cash in exchange for meaningless promises of security. Contact their local Citizens Advice Bureau or one of the free debt advice agencies Consumer Credit Counselling Service 0800 138 1111 www.cccs.co.uk or National Debtline 0808 808 4000 www.nationaldebtline.co.uk
Benefit backdating cut
The Government is going to make pensioners pay for new moves to get more of
them claiming money off their council tax. From October 2008 anyone making a
claim for pension credit will automatically make a claim for council tax benefit
as well. The form will be filled in by the pension service and passed straight
to the local council. At the moment the form is sent to the pensioner who then
has to sign it and post it themselves. About half fail to do so and miss out on
a cut – often to zero – in their council tax.
But the extra cost of tens of thousands of new claims for council tax benefit will be recovered by cutting the backdating of pension credit and council tax benefit from the current twelve months to just three. Pensions Minister Mike O’Brien claimed that "A shorter back-dating period…will significantly cut the amount of personal information we need to request – and speed up claims."
The sublime…
We still don’t know who paid nearly £30 million ($57.2 million) for a
sculpture which is just 3¼ inches high. But the unnamed Englishman now owns what
Sotheby’s describes as "one of the oldest, rarest, and most beautiful works of
art from the ancient world." Made from white limestone the 5000-year-old
Mesopotamian carving of a lioness with human features dates back to the same era
in Mesopotamia as the first known use of the wheel. Found in Baghdad in the
1920s by the English archaeologists Sir Leonard Woolley it was sold soon after
in New York and has been in the same family for nearly sixty years. It price is
the highest ever paid for a sculpture and, at around £9 million an inch, makes
the Guennol lioness one of the most expensive artefacts in the world.
…to the ridiculous
Another record was achieved in the same week. A Ford Cortina was sold for
£136,800 – a record for the vehicle. The 1965 Mk 1 Ford Lotus Cortina had been
driven by the former Formula 1 champion Jim Clark and restored to its original
condition in an Essex workshop. Only 3301 were made and the original list price
was £1100-3s. [Pic from Bonhams so try them for pic].
New coins
There is to be a major facelift of the reverses of the UK coinage in the
spring. Seven coins from 1p to £1 (but not the £2 coin) will be redesigned with
a new uniform appearance. The new designs are shrouded in secrecy but Saga
understands there will be no change to the Queens portrait or the design on the
‘front’ of the coin – technically called the obverse.