There was good news in the Budget for those who can afford to put more into an ISA. The limit will rise from £7,200 to £10,200 from 6 October 2009 for anyone who is aged fifty or more. Half the amount - £5,100 – can be in a cash ISA. To qualify you must actually be 50. So if your 50th birthday is on 5 January 2010 you will have to wait until then. From 6 April 2010 the new limit will apply to people of any age. If you have already put the current maximum into your ISA in 2009/10 you should be able to top it up to the new level. However, some fixed rate ISAs do not allow you to add money. It is not clear how that will be dealt with by the ISA providers affected. You will not be able to open a new ISA as you can only open one in any tax year.
The Winter Fuel Payment will stay at £250 for households where someone is aged 60 or more and £400 for those where someone is aged 80 or more. The qualifying date for being that age is 27 September 2009. Different rules apply to people in care homes.
Grandparents and other adult family members will get National Insurance contributions for the basic state pension credited to them for every week they spend at least 20 hours looking after a grandchild or younger relative aged less than 12. The credits will not begin until April 2011 and how it will be administered is not yet clear. By then people will only need 30 years contributions to get a full pension so it may not actually help that many people.
Savings and pension credit
The savings limit for getting pension credit will rise from £6000 to £10,000
in November this year – the exact date has not been fixed. That will mean an
extra £3.20 a week for most people on pension credit with savings over £6000 and
an extra £8 a week for the rest. In addition about 70,000 people will be able to
claim pension credit for the first time.
Any actual income from the savings is ignored but once you exceed the limit (£6000 now and £10,000 from November) you are assumed to have an income of £1 a week. Each £500 above that means another £1 added to your weekly income. There is no upper limit to the amount of savings you can have. The way the arithmetic works is that if you are aged 65 or more and have no other income at all (an unlikely scenario) you could actually have £96,000 savings (£139,000 couple) and still get a few pence pension credit. Even if you have just the basic pension of £95.25 you can have £48,500 savings and still get a little pension credit. Your income would be counted as £85 a week and you would get 30p a week Pension Credit. For a couple with the basic single pension and the basic married woman’s pension (total £152.30 a week) they can have £62,500 savings before losing entitlement to pension credit. If they both have a full single pension of their own the limit is £43,500 between them before pension credit runs out. Even if your income is at the guaranteed income level of £130 (single) or £198.45 (couple)
, pension credit can still be claimed until your savings exceed £31,000 (£39,500 couple). From November add £4000 to all those amounts of savings.These figures have surprised some people – including some who work for the pension service – since I revealed them in this column in April. But they are correct for people aged 65 or more and for couples where at least one of you is that age. If your income is higher than these amounts then of course the amount of savings you can have and still get some pension credit will be lower. Try out your own circumstances at
www.entitledto.comThe £6000 threshold will also rise to £10,000 for people aged 60 or more who claim council tax benefit or housing benefit.
One other piece of good news is that if you get pension credit and are aged 65 or more and you come into some money – for example an inheritance or through an equity release plan – you do not have to tell the DWP for five years after your income was last assessed. And – since April – once you reach 80 you never have to report increases to capital or some sorts of income. So if you are getting pension credit and get a windfall you do not need to fear your income will be cut. However, if your marital status changes then you will be re-assessed.
If your capital falls you can still tell the DWP and get your pension credit increased.
A new Saga leaflet called Claim It! It's Yours explains all the complex rules about pension credit and getting money off your council tax and, for tenants, your rent as well. It also explains about social fund grants, health costs, and winter fuel payments. Click to download Claim It!.
Shed loads of problems
How much is the stuff in your shed worth? And is it insured? Chances are you
do not know the answer to either question. Some home contents insurance policies
also cover the property in your shed. But most do not and generally it is not
something you can specify if you go to a comparison site to get the best deal.
Even if your policy does include your shed it must be securely locked with safe
windows and preferably away from the prying eyes of passing burglars. Otherwise
you may not get paid if your mower, gardening tools, hosepipes, bicycle, power
hedge trimmer, and those monogrammed leather gardening gloves are nicked.
Usually you will have to tell the insurance company what is in your shed and
what it is worth. Even then there may be an upper limit on what is covered. With
burglaries increasing in some parts of the country, it is well worth checking
your policy for shed and contents. If it is not clear then call your insurer and
ask.
Disability claims abroad
The Government has finally accepted in full a ruling by the European Court
of Justice in October 2007 that it should allow claims for attendance allowance,
disability living allowance (care component), and carer’s allowance by UK
citizens living in Europe. A year ago the DWP accepted half the judgement and
allowed people who had claimed these benefits in the UK to keep them if they
went to live in other European countries. Now it has accepted the full decision
and will allow claims made from people already living in Europe. In order to
make the claim you must have what is called a ‘connection’ with the UK. That can
mean receiving a state pension or having adequate National Insurance
contributions to be able to claim sickness benefit. Anyone who has made a claim
in the past and had it disallowed should now ask for it to be reconsidered or
put in a fresh claim. The ruling applies to the 26 EU countries plus Gibraltar,
Iceland, Norway, Liechtenstein, and Switzerland
June 2009