Postcode
annuities
Insurers are cutting back on the pensions they
pay to people in wealthy areas and giving more to those in poorer ones. All five
of the major providers of annuities – the annual income you buy with the money
in your pension plan – are now putting your postcode into the equation when
working out how much to give you. People in wealthy areas such as Epsom in
Surrey with a KT postcode or W14 in London’s Kensington have longer life
expectancies than those in areas such as the G22 postcode in Glasgow or B9 in
Birmingham. And in future they will get an annual income which can be as much as
7% lower for the same size pension fund. That would knock nearly £10 a week of a
£7000 a year pension.
Canada Life is the latest insurer to put its annuity
customers into the postcode lottery. It joins Legal & General, Aegon, Aviva, and
Prudential who have most of the annuity market between them.
Never buy the annuity from the company that has
managed your pension fund – unless it is an old pension that has a guaranteed
annuity rate. You will almost always get a better deal from another company.
But these new variations make it much more difficult
for individuals to look at the market and find the best deal. So it is very
important for anyone approaching the time when they want to turn their pension
fund into an income for life to get professional advice for an Independent
Financial Adviser who specialises in annuities. If you are unwell or you smoke
you can get a higher annuity. Make sure your advisor knows about any negative
factors in your health otherwise you could end up poorer for the rest of your
life.
It is best to find an advisor who will charge you a
fee and give you back any commission earned.
National
divide on bus passes and prescriptions
Last month we reported that the
qualifying age for bus passes and free prescriptions – currently 60 – would
begin to rise from April and reach 65 by April 2020. But the change only applies
to England – Scotland, Wales and Northern Ireland have their own rules.
In Wales prescriptions have been free for everyone
since April 2007 and they will be free for all ages in Northern Ireland from
April this year. In Scotland the price of a prescription item will be cut to £3
from April and the Scottish Government plans to make them free for everyone from
April 2011. Meanwhile people who reach 60 will still get them free in Scotland
for 2010/11.
Free bus travel is available in Scotland, Wales and
Northern Ireland from the age of 60 and there are no plans in any of these
countries to raise the age from April. A separate scheme which gives free travel
across the whole of Ireland – including both Ulster and the Republic – for
residents in either part – begins at the age of 65.
Scrap that
boiler
The Government will pay £400 to people
in England who scrap their old and inefficient gas or oil central heating boiler
and upgrade to a new energy saving model. To qualify for the scheme the boiler
must be rated at G or below on the energy efficiency scale. Most gas boilers
that qualify will be at least 15 years old and oil boilers at least 25 years
old. Electric boilers are not in the scheme. As a rule of thumb if the boiler
has a permanent pilot light it will probably qualify. You can find out if it
does at
http://www.governmentboiler-scrappagescheme.info/EligibilityCheck.php
Although £400 sounds a good discount a new boiler
will cost between £2000 and £3000 and the average saving on gas is around £235 a
year. So it will take a long time to pay back the investment. Moreover, people
who qualify for help with their heating system through the Government’s Warm
front scheme may find they do better to use that rather than the scrappage deal.
People over 60 who get pension credit, council tax
benefit, or housing benefit qualify for Warm Front which can provide up to £3500
to help with energy efficiency measures. More at
www.warmfront.co.uk
If your boiler qualifies you must get your quote in
writing, send it to the Energy Saving Trust, and wait for it to send you back a
voucher before getting any of the work done. Once the new boiler is installed
you must pay in full and send the voucher with the invoice back to the Energy
Saving Trust within twelve weeks of the voucher being issued or it will be
cancelled. You should receive your £400 grant within 25 days. More information
at
www.energysavingtrust.org.uk.
Boiler scrappage only applies in England. Scotland,
Wales and Northern Ireland have their own energy saving schemes.
Wales: 0800 316 2815
www.heeswales.co.uk.
Scotland: 0800 512 012
www.energyassistancepackage.com.
[NB needs www to work]
Northern Ireland: 0800 988 0559
www.nidirect.gov.uk and
search for ‘warm homes scheme’.
Claim your
tax-free £250
People aged 60 or more who did not get
the Winter Fuel Payment in the winter should claim it by 30 March or they will
lose it.
Every year tens of thousands of people – mainly men
– do not get the winter fuel payment because they are under 65 and the
Department for Work and Pensions does not know about them. This winter the
payment was for people born on or before 27 September 1949. It is £250 for every
household where someone aged 60 or more lived (and £400 if someone aged 80 or
more lived there). If two or more people lived together then they would get half
the payment each. Some people in care homes do not get the payment; others do –
but only at half the full rate. Once you have claimed the winter fuel payment
then it will be paid for the rest of your life, even if you move outside the UK
to live in Europe.
Call the Winter Fuel Payment Helpline on 0845 9 15
15 15 or download the claim form at
direct.gov.uk – put
‘winter fuel’ in the search box.
For the coming winter 2010/11 the qualifying age
will be slightly higher – your date of birth will have to be on or before 5 July
1950 to get it.
Lights out
for Light Users
The final few thousand people on BT’s
Light User Scheme which gives low rental and cheaper call charges – are being
moved to other tariffs. Low income customers can choose BT Basic – but that can
work out much more expensive. It costs £13.50 a quarter – with another £5 a
quarter for those who do not pay by direct debit and who want paper bills. The
cost includes 45 minutes of calls to a UK landline which works out at about 30
seconds a day. Any calls above that will be charged at 3p per call plus 10 per
minute. Calls to mobiles and to 0845 or 0870 number are charged at a higher
rate. BT Basic is only available to people on pension credit (guarantee credit),
income related Jobseeker’s Allowance, income related Employment and Support
Allowance, or income support. People who qualify for BT Basic may find other
plans are cheaper. BT will advise on the best plan but only if you ask – it does
not monitor bills to see which would suit a particular user best.
Anyone not on one of those four benefits will have
to choose another tariff, probably the Unlimited Weekend plan. That has a
quarterly rental of £38.37 which includes all landline calls all weekend. Calls
at other times cost 5.4p a minute to landlines. Mobile calls are more expensive
the cost can be cut by registering them as friends and family calls. Free
evening calls can be added for the same price for customers who commit to a 12
month contract. It is all very – some might say deliberately – complicated.