Low income people still pay more tax.
It is a fast moving world. A month ago we reported the Government’s plans to compensate some of the five million low income households who would pay more tax this year than last after the 10p rate of tax was scrapped to pay for a cut in the basic rate to 20p. After the June Saga had been printed the Government changed its mind again. And the revised plans were very different. Out went raising the winter fuel payment for those aged 60 to 64. Out went changing the rules on tax credits for single people on a low income.

Instead the Government has raised the personal tax allowance for everyone from £5435 to £6035. The £600 increase will cut £120 off the tax due from around 22 million people. That will more than compensate four million low income people who are paying more tax this year than in 2007/08. And it will mean more money – usually £120 – for another 17 million who were already paying less tax this year than last. But the Government estimates it will leave slightly more than one million people paying more tax this year. And they are all on very low incomes.

People under 65 with an income between £6845 and £10,505 who do not pay National Insurance (NI) contributions will still pay more tax this year than last. People under 65 who pay NI will pay more tax on an income between £7131 and £9075.

At its worst someone with a total income of £7455 who does not pay NI will pay an extra £61 tax in 2008/09 than they did in 2007/08. In other words out of an income of £143 a week they will pay an extra £1.17 of it in tax. People under 65 who earn £7455 a year and pay NI will pay an extra £32.40 a year compared with 2007/08. These losses are £120 less than they would have been. But they are still losses.

Until September everyone will be taxed at the original rate. It will take that long for the Revenue to sort out its procedures to introduce the new personal allowance. So in September basic rate taxpayers will get a rebate on their tax of up to £60 and then pay £10 a month less for the rest of the tax year.

People over 65 will generally not benefit from the change. They were already protected from scrapping the 10p tax band by a big increase in their tax allowance - £1180 above the normal inflation rise. But one group of over 65s will benefit. They have an income above the level where their higher personal allowance is reduced to the standard allowance. Anyone over 65 with an income above £27,790 (£28,090 for the over 75s) and below £41,435 will now get the new personal tax allowance and gain up to £120 a year.

Annuities are getting better value. In other words if you are about to retire and convert your pension fund to an income for life you will get more per pound saved now than you did a year ago. It is one bit of good news coming out of the credit crisis that is hitting the banks. A year ago a man aged 65 with £100,000 fund could have got a pension of £7199 a year for life. Today he can get £7764 which is 7.85% more. Women get lower annuities because they live longer but the rises are slightly more. A 65 year old woman will get £7250 instead of £6711 a year ago – a rise of 8%.

The recent increases have raised annuity rates to where they were in the autumn of 2002. Then they were falling sharply as insurers realised just how much life was lengthening. And Stuart Bayliss, director of Annuity Direct – an independent financial adviser which specialises in annuities – says today’s rates may not last.

"Longevity is set to improve for the next 10 to 15 years, though in the longer term there is a question about it. And if you take the view that the banking crisis is coming to an end then rates are probably peaking."

Of course, these improvements only help those retiring now. People who locked into a lifetime annuity in 2007 – or worse in 2005 when they were at their lowest – are stuck with it.

Smoking can boost your annuity by more than 10% at 60 and more than 15% at 65. And some medical conditions can mean even higher annuities so always be honest about your health.

Married women’s pensions
Pensions Minister Mike O’Brien has admitted that tens of thousands of married women may be able to get more state pension. Two groups are affected. First, women who stayed at home to look after their own children or, in a few cases, a dependent adult. For each whole tax year at home they should have got a boost to their state pension through a complex piece of arithmetic known as home responsibilities protection (HRP). But the records were not properly kept and mistakes have been made in what the Minister called "a significant number" of cases. He has ordered an expensive and difficult exercise to track these women down. Meanwhile if you got child benefit or cared for an adult from April 1978 (time spent caring before that does not count) contact the pension service to make sure you are getting the correct pension.

The second group the Minister is looking for are up to 73,000 married women born between 6 April 1938 and 23 October 2004 who have a gap in their National Insurance contribution record between 1996/97 and 2001/02. If their husband is less than five years older than they are they may be able to get a backdated pension for the years he was not retired.

Richest pensioners
Sri and Gopi Hinduja, aged 72 and 68, are Britain’s wealthiest pensioners. They share a fortune of £6.2 billion between them. The two brothers live in London and jointly own and run the Hinduja Group their father founded with two other brothers. The company has property interests all over the world. The brothers are fourth in the list of Britain’s wealthiest individuals, just below the estimated £7 billion fortune of the Duke of Westminster – one of only three in the top ten who was born in Britain. Another Indian, Lakshami Mittal the steel magnate is top with a staggering £27 billion fortune – making him the sixth richest person in the world. Roman Abramovich, the Russian oil and gold billionaire who has spent more than £500 million on Chelsea football club (£11.7 billion left), is second in the Sunday Times Rich List.

In case you're wondering HM Queen, 82, comes in at just 264^th after the compilers of the list excluded the £10 billion value of the Royal Art Collection which is in fact owned by the nation. Her personal wealth amounts to £320 million. Including some very nice houses.