Buying extra state pension, Car tax disc to go, Charity scams, Triple Lock strained

STATE PENSION TOP UPS
More than twelve million pensioners will be able to boost their state pension by up to £25 a week under plans announced by the Government. The offer applies to all existing pensioners and anyone who reaches state pension age before the new higher ‘single tier’ state pension begins on 6 April 2016. The new pension will be up to £40 a week more than the basic pension is now and this deal will allow those born the wrong side of the line to boost their pension towards that level.

Men born before 6 April 1951 and women born before 6 April 1953 will not get the new pension but will be able to buy the additional pension in units of £1 a week up to the maximum. The Government has not announced how much people will have to pay. But independent experts reckon that at age 65 it will be at least £1000 for every £1 a week bought – around £25,000 to £28,000 to buy the full £25 a week extra. Someone who lives an average lifespan will get their money back. So the amount will fall the older you are. But it will not vary by health, sex, or postcode – all of which affect how long you will live.

It will be increased each year in line with inflation and at least half of it can be inherited by a spouse. The offer will be open from October 2015 but people will have to act quickly – it is expected to close within a year or two. The Government says about seven million pensioners have enough savings to buy at least some extra pension but it expects only “a small proportion” to do so.

CAR TAX DISC TO GO
From October it will no longer be necessary to display a tax disc on your car. Police and traffic wardens will use the number plate to see if a vehicle is taxed using the records at DVLA. It will also be possible to pay the Vehicle Excise Duty (as car tax is properly called) by monthly direct debit for a premium of an extra 5%. The extra cost of paying half-yearly will fall from the current 10% to 5%.  You will still be able to tax your car at the Post Office but there is now no need for an insurance certificate. If you suspect a vehicle has been abandoned you can check if it is taxed on the DVLA database via gov.uk and search ‘check vehicle taxed’. That takes you to a DVLA website where you will need the number plate and make. The Vehicle Status line shows if tax is current and Date of Liability shows when the next tax due.

From October when a vehicle is sold the buyer will have to tax it from the date of purchase and the seller will get unused tax refunded. No decision has been taken on how to deal with the overlapping month of sale. If you keep a vehicle off the road you have to make a Statutory Off Road Notice (SORN) declaration every year. In future a SORN will remain valid without being renewed every year.

TRIPLE LOCK STRAINED
The Coalition Government put a ‘triple lock’ on the state pension which ensures it is increased each year by whichever is bigger – the rise in prices or the rise in earnings. And there is a guarantee that in any event the rise will not be less than 2.5%. This year inflation was 2.7%, way ahead of the rise in earnings. So this April, as predicted in the December Saga, the basic state pension will rise by £2.95 raising it to £113.10 a week. A couple where both depend on the husband’s contributions will get an extra £4.75 a week – a total of £180.90 basic state pension. All other parts of the state pension such as SERPS or additional pension will also rise by 2.7%.

However, nearly 3 million low income pensioners who rely on pension credit will get rather less. One and three-quarter million of them will get an increase of just £1.69 a week, or £2.44 for many couples, which will raise their income by as little as 1%. And the rest – more than a million of the very poorest – will get the same cash increase as the state pension but that will only be a 2% rise in their total income.

The change is part of phasing out one part of pension credit called ‘savings credit’ which is given to people over state pension age whose income is above £148.35 a week (single) or £226.50 a week for a couple. As a result the maximum income to get any pension credit has been frozen. Over the three years from May 2010 the number benefiting from pension credit fell by 420,000 saving the Government £715 million a year.

SCAMWATCH
The Air Ambulance Service saves lives by getting injured or ill people to hospital more quickly than a road vehicle could. But it is not run by the NHS or paid for taxpayers. Each local air ambulance service is a charity and raises its own money. So it is particularly appalling that crooks are leafleting houses to encourage donations to ‘Air Ambulance Service’ but are not associated with any of the charities that run it.

A similar scam was closed down by the High Court two years ago and the directors of the company prosecuted. It is just one of many enterprises which imitate charities and deliver bags or leaflets asking for donations. Often these are not registered charities and give at best a tiny fraction of what they collect to any real charity, keeping the money for themselves. If you get a bag or leaflet through the door claiming to raise money for charity check carefully that it is genuine before donating. It is much safer to give money online or to give unwanted items directly to a nearby charity shop.

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