This piece first appeared in Saga Magazine in October 2008
The text here may not be identical to the published text

 

Saga Money

Water rises, age discrimination plans, reduce inheritance tax, Bugatti record, PIN code trick

Rises in the pipeline
Most water and sewerage bills in England and Wales will rise by more than inflation over the next five years if the water companies get their way. Plans submitted to the regulator Ofwat show that some are demanding price rises of more than 4% on top of inflation each year from 2010 to 2014.

The companies say the money is needed to invest in new pipes and cut down on leakage. Altogether the 24 companies will invest £27 billion over the five year period. But critics say that customers should not have to pay for this new infrastructure which shareholders, not customers, will own. Utility consultants McKinnon and Clarke comments "the well run water companies have implemented a planned programme of investment and are not expecting to pass on any increases to their customers. Why can some do it and the others can’t?"

Top of the increases in sewerage charges is Southern Water which wants to put them up by a fifth on top of inflation over the next five years. Customers would face a total increase of £51 in the average £230 bill. Bristol Water it wants a record rise in its water charges of more than a quarter adding £39 by 2014 onto next year’s average bill of £148.

Ofwat will not make a final decision on the companies’ plans and charges until autumn 2009. Any increases will be on top of the average 5.8% rise in the average water and sewerage bill across England and Wales this year and a planned above inflation rise in 2009.

In Scotland the charges by the nationalised Scottish Water have risen by less than inflation and will continue to rise at or below inflation until 2014. In Northern Ireland domestic customers do not pay directly for water and sewerage but the Executive plans to introduce them in April 2009.

Many older people could cut their water bills if they used a meter rather than paying the fixed water rate. Meters will be fitted free by all the water companies in England and Wales. In Scotland a charge may be made.

WATER CHARGES - proposed increases 2010-2015        
    Average household bill Increase
Company Service 2009/10 2014/15 increase  over 5 years % per year
Southern Water Sewerage £230.00 £281.00 £51.00 22.2% 4.1%
Thames Water Sewerage £113.00 £134.00 £21.00 18.6% 3.5%
Yorkshire Water Sewerage £167.00 £182.00 £15.00 9.0% 1.7%
South West Water Sewerage £267.76 £290.88 £23.12 8.6% 1.7%
United Utilities Sewerage £191.00 £203.00 £12.00 6.3% 1.2%
Anglian Water Sewerage £200.33 £209.28 £8.95 4.5% 0.9%
Welsh Water Sewerage £225.00 £233.00 £8.00 3.6% 0.7%
Northumbrian Water North Sewerage £159.00 £157.00 -£2.00 -1.3% -0.3%
Wessex Water Sewerage £194.00 £190.00 -£4.00 -2.1% -0.4%
Severn Trent Sewerage £142.00 £137.00 -£5.00 -3.5% -0.7%
             
Bristol Water Water £148.00 £187.00 £39.00 26.4% 4.8%
Sutton & East Surrey Water Water £153.00 £193.00 £40.00 26.1% 4.8%
Cambridge Water Water £114.36 £137.46 £23.10 20.2% 3.7%
South East Water Water £160.08 £192.34 £32.26 20.2% 3.7%
Southern Water Water £122.00 £146.00 £24.00 19.7% 3.7%
United Utilities Water £160.00 £186.00 £26.00 16.3% 3.1%
Tendring Hundred Water Water £162.11 £184.99 £22.88 14.1% 2.7%
Thames Water Water £171.00 £195.00 £24.00 14.0% 2.7%
Folkestone & Dover Water Services Water £180.20 £203.91 £23.71 13.2% 2.5%
Bournemouth and West Hampshire Water Water £125.00 £141.00 £16.00 12.8% 2.4%
Three Valleys Water Water £149.00 £167.00 £18.00 12.1% 2.3%
Essex & Suffolk Water Water £158.00 £177.00 £19.00 12.0% 2.3%
South Staffordshire Water Water £115.04 £127.95 £12.91 11.2% 2.1%
Northumbrian Water North Water £123.00 £133.00 £10.00 8.1% 1.6%
Portsmouth Water Water £87.71 £93.92 £6.21 7.1% 1.4%
Wessex Water Water £188.00 £199.00 £11.00 5.9% 1.1%
South West Water Water £193.93 £204.82 £10.89 5.6% 1.1%
Severn Trent Water £147.00 £155.00 £8.00 5.4% 1.1%
Dee Valley Water Water £120.57 £126.87 £6.30 5.2% 1.0%
Anglian Water Water £159.87 £164.19 £4.32 2.7% 0.5%
Welsh Water Water £165.00 £157.00 -£8.00 -4.8% -1.0%
Yorkshire Water Water £145.00 £135.00 -£10.00 -6.9% -1.4%

Source: Ofwat

Further information: www.ofwat.gov.uk

Car tales

There were red ones, there were black ones. And some fetched more than a million dollars. But the record price of $7.92 million (£4.2 million) was paid for a 71 year old car painted in the colour of camouflage trousers – pale green with fawn highlights. The record breaking 1937 Bugatti roadster was sold at the annual auction of fine old vehicles at Pebble Beach in California in August. Overall the auction took around £16 million showing that the money available to buy the very best items at auction is as high as ever, despite the credit crunch.

More at http://goodingco.com/main.html

At the other end of the scale 70 year old James Jones of Ohio made the news when he bought a new Chevrolet for $16,000 (£8600) and paid half the cost in coins! Mr Jones is quoted as saying "paper money will burn. But it is hard to damage coins". He bought rolls of coins every month and saved them in coffee tins. Staff took an hour and a half to count them. Oddly, he paid the balance by cheque.

New age discrimination laws
Less than two years after it banned age discrimination at work the Government has promised it "will end age discrimination" in other aspects of life as well. Specifically it will "make it unlawful to discriminate against someone because of their age when providing goods, facilities and services or carrying out public functions." However, the detail of the plans indicates it will not be quite so straightforward. Companies like Saga and Club 18-30 will be allowed to market their products to particular age groups. Bus passes for those over 60 will, of course still be allowed. And insurers will still be able to charge different premiums on things like health, travel, and car insurance if they can show that the likelihood of a claim varies with age.

The Government insists though that the change will make a big difference. It will, for example, prevent doctors refusing treatment on grounds of age. And stop finance companies imposing a blanket ban on loans or credit cards to older people. There will be further consultation on the details and it could be some years before the changes come into effect.

More information www.equalities.gov.uk

IHT – put life assurance in trust
Everyone with life insurance can take a simple step to reduce the risk of inheritance tax being due when they die. Normally the payout from a life insurance policy simply forms part of the estate of the deceased person. And that means it could be liable to IHT if the estate total – including the value of their home – is above the limit for the tax which is currently £312,000. To avoid that happening the life insurance policy should be written ‘in trust’. In other words the beneficiary is not the estate of the deceased but a trust which is in fact run by the insurance company. On death, that trust distributes the money according to the deceased’s wishes. All life companies will arrange this for you free either when you take out the policy or later. The average life policy pays out around £160,000 and the full Inheritance Tax on that amount would be £64,000. One estimate suggests that only one in 20 life policies are written in trust.

PIN down that code!
Saga reader Eric Gendle has come up with an ingenious way to note down safely the various PINs you need for different plastic cards. His method is to memorise just one of your PINs. For your other PINS add them to the one you remember and write down the result. The sums enable you to work out each PIN. But they are of no use to a thief without the PIN you have memorised – which of course you have not written down anywhere. For example, suppose your main bank card is 4721. Remember that as you use it the most. But you also have a credit card that you seldom use with a PIN of 3862. Add the two together and write down 8583. That number is no use to anyone. But to get your credit card PIN you just subtract the PIN you have memorised from that figure. Eric’s clever idea is in fact similar to the way that banks encode information. The difference is that they use multiplication of two enormous prime numbers. Only the person with the key prime can decode the information.

 


All material on these pages is © Paul Lewis 2008