Millions of Pensioners Fall £4,500 Short Of Meeting Basic Bills, Heating and Food Needs

Millions of elderly people face a shortfall of up to £4500 a year between the state pension and their outgoings according to new research. The average pensioner household spends just over £10,000 each year on bills but the full basic state pension is just £5,881 annually, or £113.10 a month.

Pensioners who are lucky enough to have savings or a private pension can make up the difference but others risk having to cut back on food or heating in a desperate attempt to balance the books. Figures out this week reveal that 1.6 million of 10.8 million pensioners in the UK live in poverty. Of this number, around 900,000 are classed as being in severe poverty, having less than half the average household income. Pension CreditFigures from the Office for National Statistics shows that food is the largest bill for pensioners at £1,563 a year for the average household. Other large outgoings include rent and energy. In the South East, pensioners spend the most on basic essentials at £11,945 per year. In Wales, the average pensioner household is £8,829. A new flat-rate pension is also being introduced at a rate of £148.20 per week. However, there is still a £2,700 a year gap between the pension and the outgoings.

Dean Mirfin, group director at Key Retirement Solutions said:

[quote] “This analysis shows how many pensioners will have to make harsh spending decisions unless they have other provisions such as savings or a private pension. [/quote]

One former mill worker said that he had seen the price of everything go up, whilst the money to pay for it did not increase.

Age UK pointed out that help is available in the form of Pension Credit. Pension Credit is vital in helping pensioners on low incomes as it provides a top-up to their basic pension, however it is estimated that one in three pensioners who are entitled to financial support do not know that they are.


10,000 Employers Join Workplace Pension Scheme

From the first week of July, around 10,700 employers will be auto-enrolling their staff into a new workplace pension scheme. This move is the largest staging date of the workplace pension initiative so far as it involves the highest number of employers at one time.

The Government’s workplace pension scheme is a new system where employees are automatically drafted into pension schemes by their employers. A percentage of an employees salary (0.8%) will be automatically taken from their pay and will be matched by a 1% contribution from their employer and an 0.2% top up from the Government in the form of tax relief. These figures will eventually rise over time, for instance in 2018 workers will be contributing 4% of their salary, with 3% coming from their employer and 1 per cent from tax relief t0 make a total of 8% of a salary in contributions per year. If an employee wishes to make larger contributions, they can do so. They are not automatically enrolled, the scheme is not compulsory and you can choose to opt out. It is believed that around 10% of employees have opted out of the scheme so far.Workplace Pensions

The idea around it is that a small portion of your pay is automatically placed in your pension pot. By turning it into an automated system, the Government hopes it will convince everyone to get into the habit of saving for retirement whilst contributing enough to ensure that they will get a good pension.

People earning less than £10,000 a year or those under 22 will not be automatically enrolled. Medium sized businesses are now due to start the auto-enrollment process. The scheme first began back in 2012 with the largest employers, however the smallest employers won’t have to launch their scheme until 2018. By May 2014, over 15,000 employees had confirmed their details.

If you choose not to have a Work Place pension, you can top up your Government allocated pension with Pension Credits once you are over the age of 65.

Pension Credit Helps To Boost Income

If you are over the age of 66, do you like the sound of being able to boost your income by an estimated £1,700 a year? Experts say that an estimated three million people could see their bank balances boosted simply by claiming all that they are entitled to. As much as five billion in pension top ups goes unclaimed, often simply because older people are too ‘proud’ to get the help on offer. Other pensioners told researchers that they found the process to be too complicated or personal, whereas some people just did not know they were entitled to the money.

However, the research found that claiming a package of pension credit, council tax discounts and housing benefit could line their pockets with an extra £1,716 per year. Yesterday, a pension specialist urged those close to retirement or already retired to make sure that they get what they are entitled to. She said that the current pensioners built Britain up to what it is today, so they should not have to scrape by. She said thPension Credit phone numberat women especially have very small incomes.

A new report which was commissioned by Age UK and found that one in 10 pensioners would not be able to pay a £200 bill if they were hit with it unexpectedly. Statistics showed that one in four over 65s feel financially worse off than they did last year, with a third worried about the cost of living in general. A spokesperson for the charity said that Age UK helps people every day claim what they are entitled to.

The basic state pension is £113.10 a week for a single person. However, if the person’s total income is below £148, they could get a top up as part of Guarantee Credit from the Pension Credit scheme. Those who have saved towards their pension can get Savings Credit. Even if the person’s income is not boosted a lot by this credit, it opens the door to other benefits such as Council Tax reductions and housing benefit. They are also eligible for free NHS prescriptions and eye tests, as well as getting Cold Weather payments after a spell of bad weather.


Experts Reveal The Secret Of Doubling One’s Pension Pot

Experts have discovered a way for millions of workers approaching retirement age to increase their pension pot by almost 100%, it hasDeposit Into Piggy Bank Savings Account been reported.

Since the government’s new rules on state pension plans, many retirees have found they would be worse off if they chose to receive their state pension straight away, as opposed to deferring it.

It is expected that the state pension will increase by 10.4 percent over the next four years, plus an extra five percent for living costs. Therefore, experts have advised that if one can defer their pension for four years and live off their accumulated savings in the meantime, they will have a much bigger pension fund waiting for them by the end.

Alan Higham, retirement director at investment firm Fidelity, said:

[quote]”Many will be looking for a guaranteed income when they retire. If they spend money from their own pension instead of taking the state pension, and hold off for four years, the overall value from their savings pot will double.

“By doing this, the difference is always going to be double what you would expect if you had bought an annuity on day one.”[/quote]

Indeed, new rules in the Budget released recently no longer require workers to buy an annuity with their pension pot when they retire. The option to live off one’s own savings and defer taking their state pension is the new alternative for those trying to play it safe and save more money.

However, as the rules are set to change again in 2016, only those looking to retire in the next two years will be able to take advantage of this tactic. Financial experts have also warned that there are still risks with adapting this approach.

For one, the government could change the rules again, which could see the 10.4 percent rate decrease or even drop to zero. If another Government happened to be elected, it could also have its own plans for the pension.

Yvonne Goodwin of Yvonne Goodwin Wealth Management said that deferring one’s state pension is a good idea, but only if one is on top of their own finances. She also pointed out that spending one’s savings was not the only way to defer taking the state pension.

[quote]”It is a good idea to maybe get a part-time job and leave your pension, and your state pension, to grow. While your money is in a pension fund it is tax-free.”[/quote]

she said.

Campaigners Push To Raise State Pension To £175 Per Week

Earlier this month, campaigners presented their case for the UK State Pension to be increased to £175 per week, at the Pensioners’pensions-credit-uk Parliament in Blackpool.

The three-day event gave campaigners a chance to voice their concerns over the current quality of life for older people living in Great Britain. The proposal that the State Pension be raised to £175 per week was just one of the key issues raised by the campaign group, the National Pensioners Convention.

At the moment, the basic State Pension rests at just £113.10 per week, which the Convention says is not enough to support individuals in later life.

They claim that £175 per week is the minimum income needed to live above the poverty line.

[quote]“The UK is not an easy place to be for many older people right now.

“Despite what some people say, pensioners have not escaped the Government’s austerity programme.”[/quote]

They went on to point out that cuts to the winter fuel allowance; rationing of care services; changes to the way pensions are uprated annually and the government’s freeze on tax allowances are all beginning to “take their toll” on the retired and the elderly.

This is all happening as the cost of living rapidly rises, creating a hazardous environment for retirees to enjoy later life. The Convention summed up the UK state pension system as “one of the worst in Europe”.

In light of the current chokeholds on pensions, new research revealed that more than 70 percent of people are likely to continue working past the State Pension age in order to boost their pensions. The study was carried out by Metlife and included an analysis from former pensions adviser Ros Altmann. Altmann surmised that working one full extra year, plus two more years part-time, could boost one’s pension fund by 11 percent.

However, the study also showed that only 20 percent of workers believe they are saving enough for retirement, whilst 41 percent do not understand retirement savings following George Osbourne’s decision to scrap the need to buy an annuity.

On a better note, it was revealed that 24 percent of workers (7.3 million) plan to start saving or increase their pension contributions in light of the new changes.

Ros Altmann stated that a ‘national wealth service’ should be established in order to help savers understand the new pension system and make adequate plans for their retirement. She is also urging the government to put new rules in place that compel ‘non-advice’ services to disclose their charges upfront.