Local pounds
Later this month the UK will get its third
local currency. On 17 September the Brixton Pound will be launched at the south
London borough’s Town Hall. The new currency will follow the Totnes pound which
began in March 2007 and the Lewes pound launched a year ago.
These local currencies all work in the same way. You exchange your Sterling for the local notes which you can then spend only with shops, cafes and other local traders who are signed up to the scheme. The idea is to encourage people to spend their money in locally owned businesses. Branches of national retailers like Tesco, Starbucks, and W H Smith are not allowed to join. Some local traders will give you a discount if you use the local pound.
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In the Sussex town of Lewes the scheme has been running a year. The local council which sponsors the scheme claims it has been so successful that in July the L£1 notes were reissued with new designs together with higher denominations of L£5, L£10, and L£21. Yes, L£21. For every L£1 issued 5p is given to the Live Lewes Fund which supports local community projects. Altogether 130 local traders have signed up to the Lewes Pound and some fanatics claim to do all their shopping using the local money! |
Brixton plans to issue 40,000 of the new B£ notes in various denominations and they will have security features just like Bank of England notes. You will be able to exchange your Sterling for Brixton pounds at the larger outlets which have signed up. And they will also change them back into Sterling at the same one for one rate. The scheme is underwritten by the Lambeth Savings and Credit Union.
Not everyone is convinced local currencies work. Economist Tim Harford says “Money isn’t wealth. It’s just a way of keeping accounts and swapping one system of accounts for4 another isnt going to alter the basic productive potential of Brixton.” And local traders are concerned that they will have to keep stores of cash as banks will not allow them to pay in the local pounds.
More information: www.thelewespound.org, brixtonpound.wordpress.com, totnes.transitionnetwork.org/totnespound/home. If you have experience of the local currency in Totnes, Lewes or Brixton let me know what you think currency@paullewis.co.uk
DIVORCE WINDFALL
Saga reader Carole Summer has asked me to point out that divorced people can
use their ex-spouse’s National Insurance contributions to get themselves a
bigger pension when they reach 60. Carole, who was divorced nearly ten years
ago, claimed her own pension at 60 but, like most married women, found it was
reduced because she had not paid full National Insurance contributions for much
of her life. It was only later that she discovered she could use some of her
ex-husband’s contributions to boost her pension. As a result her pension rose
from £66 a week to £104 and the change was backdated to her 60th birthday. “She
told Saga “I feel it is important that other ladies in my position should know
about this.”
If you divorce then you can use your ex-spouse’s contributions as if they were your own from the year you reached 17 right up to the year you divorced. If you remarry before pension age then you lose the right to use your ex-spouse’s contributions. But once you have reached pension age and claimed your pension it will not be reduced if you remarry. If you have had more than one divorce then only the contributions of the most recent ex-spouse can be used. Using your ex-spouse’s contributions does not affect their pension and they will not know anything about it. So in effect their contributions are used twice – once for your pension and once for theirs.
If you are already over state pension age when you get divorced you can also use your ex-spouse’s contributions to boost your pension. But that rule does not apply to people who divorced before 6 April 1979. Divorcees cannot get a share of their ex-spouse’s graduated pension or SERPS. But since 2000 divorced partners can share their SERPS as part of the divorce settlement.
If you are separated but still married then you cannot use your spouse’s contributions and you will have to rely on your own contributions and, once you reach 60, you can claim the lower married woman’s pension on your spouse’s contributions. In that case getting divorced might boost your pension considerably.
All the rules also apply equally to same sex civil partnerships and their dissolution. More information: thepensionservice.gov.uk or call 0845 6060265.
WINTER FUEL
If you were born on 27 September 1949 or earlier you should get the £250 winter
fuel payment this year. If you were born on 27 September 1929 or earlier then
you will get £400. Most people do not have to claim. But if you have not had the
payment before and you will not be getting a state pension or pension credit
then you normally will have to claim as the DWP will not know about you. Get
your claim in by 25 September to make sure you get the payment before Christmas.
And do not leave it beyond 30 March 2010. After that you will lose your right to
the payment.
Not everyone gets the full amount. If you are the only person in your household to qualify you will get the full payment. But if there is more than one person who qualifies you will normally get half each. If there are people aged over 60 and over 80 the 60-79 year olds will get £125 and those over 80 will get £275. People who get pension credit will get the full amount. If you are a couple only one of you claims, so only one of you will get the full payment and the other partner will get nothing.
Special rules apply to people in care homes. If you are I a home and get pension credit then you will not get the winter fuel payment. If you do not get pension credit – which normally means you pay all the fees yourself (known as ‘self-funding’) – then you will get the winter fuel payment but it will normally be made at the half rate. So those aged 60-79 will get £125 and those aged 80 or more will get £200.
This winter is the last that the qualifying age for the payment will be 60. As the age for getting a state pension rises so will the qualifying age for getting winter fuel payments. Next year the qualifying birthdate will be 5 July 1950 and for winter 2011 it will be 5 January 1951 or earlier. By winter 2020 the qualifying age will be 65.
More information: thepensionservice.gov.uk/winterfuel or call 08459 15 15 15
10P TAX REBELLION
DEFEATED
The final attempt to
get redress for all the people who lost money when the 10p in the pound tax band
was abolished has failed. So between half a million and one million people aged
under 65 on very low incomes will carry on paying on average £1 a week more tax
than they would have done if the 10p band had been kept in 2007. The rebels, led
by Labour MP Frank Field, tried to delay the passage of the 2009 Finance Bill
through the House of Commons until the Government found a way to compensate
everyone affected. But faced with threats of financial Armageddon if the
Government machinery for collecting taxes was stopped and with a vague promise
that if anyone could find a practical solution then it would be looked at again
in the autumn Pre-Budget Report, the rebellion petered out. Only 15 Labour
members voted for Frank Field’s amendment and the Government won by 43 votes.
SAVING GATEWAY
CLOSED
Most people over 60 will be excluded from a Government scheme
which aims to boost savings. The Saving Gateway – to be launched next year –
will be open to anyone who gets the means tested benefits Jobseeker’s Allowance,
Income Support or Employment Support Allowance. It will also include those
getting incapacity benefit or severe disablement allowance and some of those
getting tax credits. But those claiming pension credit – who are all over 60 –
and attendance allowance – all over 65 – are excluded. To enter the Gateway
people will agree to save up to £25 a month for two years. The money will earn
interest tax-free and at the end of that time the Government will give them a
tax-free bonus of half what they have saved – with a maximum of £300. A Treasury
spokesman told Saga “The Saving Gateway is designed to kick-start a saving habit
among working age people on lower incomes… A number of measures have been
introduced to help pensioners.”