Money News

WARM HOME DISCOUNT
More than half a million pensioners on the lowest incomes will get £120 discount off their winter electricity bill. It is called the Warm Home Discount and needless to say what should be a simple idea has been turned into a highly complex set of rules. One group will get it automatically. They are those who get the guarantee credit element of Pension Credit but not the savings credit element. So single people with an income of £103.15 or below and couples with an income of £164.55 and below get pension credit guarantee element to top up their incomes to £137.35 (single) or £209.70 (couple). They will be automatically entitled to the Warm Home Discount if they fulfil two other conditions. First they must have qualified for that benefit on 11 September 2011. Second they must get their electricity from one of the six big energy suppliers or the smaller ones called Ebico or Utility Warehouse. Customers of other small energy firms will not get the discount.

The Department for Work and Pensions should inform the energy company which customers are entitled and it has written to them in November. If your income is at this level and you have not got a letter then you should contact your energy company at once.

A broader group of people may get the £120 discount. They include households on income support or means-tested jobseeker’s allowance or employment and support allowance who also get disability premiums. They also include pensioners who get any pension credit guarantee element even if they also get some savings credit. All of them should apply to their energy supplier for the warm home discount but, even if they qualify, they may not get it. There is a limited amount of money for this broader group and when it runs out no-one else will be paid. British Gas says anyone in these broader groups who applies by 31 January will get it.

The discount will normally be taken off the winter electricity bill. Pre-payment meter customers will get a cheque.

TAX ERRORS
HM Revenue & Customs is writing to more than a million people warning them that they have paid too little tax in 2010/11 and they must pay more tax next year to recover it. The mistakes have occurred – as they have for the last couple of years – because the PAYE system of taking tax automatically off wages or pensions does not always work as it should. In particular it is very bad at getting the tax right for people who have more than one job, a job and a pension, or whose circumstances change during the tax year.

The tax will normally be recovered by changing the tax code to take a bit more tax in 2012/13. But one group of 160,000 state pensioners will get longer. They were undertaxed due to what one Revenue official admitted to me was ‘a foul-up’. Although the Department for Work and Pensions informed the Revenue about their state pension that was ignored when their tax code was worked out. This group will have the tax recovered by changes to the tax code over the next three tax years.

Anyone who owes more than £3000 tax will have to repay it sooner. If you feels the tax recovery will cause you hardship call the number on the letter and the Revenue says it will try to give you longer.

The good news is that millions of people will be getting a cheque from HMRC. They paid too much tax in the years 2003/04 to 2007/08 and the money will be repaid over the next twelve months with interest for the delay. There are six million overpayments due for those five years and some people will be getting more than one.

COACH AND BUS CONCESSIONS
A lot of you have written in after my piece in the October Saga Magazine on coach fare concessions. The Government ended the subsidy for the 50% fares for people over 60 from 1 November. As a result coach companies withdrew the scheme. The devolved governments in Wales and Scotland did not withdraw their funding from the scheme and when I wrote the piece I was told that the 50% concession would remain for journeys beginning in those countries even if they then ended in England. Sadly that has not happened. The 50% fares have been withdrawn from all cross-border journeys although some operators offer it for journeys purely within Wales. Anyone who lives in Scotland and is aged 60 or more can get a National Entitlement Card which allows free travel on almost all bus or scheduled coach journeys which are wholly within Scotland. The change does not affect free local bus services in England. Anyone who has reached women’s state pension age – currently around 60yr 9 months – can get a pass to use on local bus services though there may be restrictions on the time they can be used. National Express has introduced its own concessionary scheme for people over 60. They need to buy a £10 card and can then get one third of almost all National Express coach journeys.

STATE PENSION AGE TO INCREASE
The government has made some concessions to women who were campaigning against an increase in state pension age to 66 by April 2020. Under the original plans 33,000 women would have had to wait two years more than they were expecting. State pension age for women will still rise to 65 by November 2018. But the date when all men and women will have a state pension age of 66 has been delayed by six months from April 2020 to October. That means no woman will face a delay of more than 18 months on the original plans to extend pension age to 65, which were announced as long ago as 1995.  Any woman born 6 April 1953 to 5 April 1955 will have to longer than she was expecting. That is also true of men 6 December 1953 and later as their pension age rises to 66. Further rises in pension age for men and women to 67 by 2036 and to 68 by 2046 are expected to be brought forward, perhaps by as much as 10 years.

More information with full tables to look up your date of birth at: www.paullewis.co.uk/spa.htm 

DON’T DIE OF COLD
With fuel costs up by a fifth since this time last year it is going to be a struggle for many people to keep warm this winter. A new report shows just how important it is to keep warm. Professor John Hills has produced a report for the Government into fuel poverty – which broadly means not having enough money to keep warm. Since 1988 it has been defined as spending at least 10% of your income on heat and light. Some people on pension credit can be forced to spend up to a quarter of their income on fuel. Professor Hills found that temperatures below 16C caused respiratory problems and once they fall below 12C cardiovascular problems occur. Low temperatures in the home can also led to damp and mould – which both affect health badly. He points out that 27,000 more people die in the winter than the summer. The majority of these excess winter deaths occur among people over 75 and the worst figures are figures are found among women aged 85 or more. This winter toll is worse than in other comparable countries. Professor Hills says “recent analysis attributes about a fifth of excess winter deaths to living in cold homes. Even if only half of that is due to fuel poverty this would still mean 2700 deaths – more than the number who die on the roads – every year.” So whatever the cost do try to keep warm this winter with living rooms at 21C and all others you use at 18C. More information: www.decc.gov.uk and put ‘hills fuel poverty’ in the search box.

e-mail Paul Lewis on paul@paullewis.co.uk