Category Archives: pensioners

Threats to pensioners from increased taxation

Numerous birds are coming home to roost from George Osborne’s cuts of a few years ago. e.g

  • Spending on the military now considered too low
  • Funding for the NHS not sufficient to meet the needs of an increase in the numbers of elderly people, and advances in technology.
  • Local government bodies getting into difficulty

(on the last item I note from our local borough council rates leaflet that goverment grants to the council have declined steadily from £130 millions in 2013/14 to approx £20 millions in the current financial year, and will reach zero by 2020/21, whilst demands for social care change in the opposite direction.)

No wonder bus routes are being cut to a stage where older or disabled people need to look to other forms of transport, and is likely to cause increased numbers of cars on the road.

Proposals to hit the elderly include a proposal that pensioners should continue to pay national insurance into old age:

The tax that pensioners should pay to fund care

Protest rally plan over free bus passes as state pension age changes

A campaign group made up of women adversely affected by changes in the state pension age is set to hold a protest rally this month.

Members of The Women Against State Pension Inequality (WASPI) group will have to wait several years for their pension following the Government’s decision to raise their retirement age to 66 by 2020.

The previous age had been 60, meaning as many as 220,000 women from across the West Midlands have been forced to change their retirement plans as a result of the decision.

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Tens of thousands of pensioners face cuts to income after huge HMRC trawl identifies decades of errors

A huge trawl of records comparing HMRC’s official files with those held by pension schemes has identified errors dating back as long as 40 years ago.

Retired workers with both public and private sector pensions face reductions to their future pension payments, which in some cases will see their retirement income halve.

In some cases pensioners have been paid too little and will receive back payments in addition to future increases. However they will not receive any interest on the payments or compensation.

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Our comment: Is this intended to make pensioners panic that some minor omission might crop up ?

apply National Insurance Contributions to pensioners’ earnings, think tank reports

A new generational contract is needed to tackle the big challenges Britain faces for young and old, covering a better funded NHS and care system, a radically reformed housing market, and a new citizen’s inheritance to boost the prospects of younger generations. This is according to the final report of the Intergenerational Commission published today (Tuesday).

Over the last two years and via 22 reports, the Intergenerational Commission – chaired by Lord Willetts and including TUC General Secretary Frances O’Grady and CBI Director-General Carolyn Fairbairn – has investigated the stresses and strains on Britain’s contract between generations, and what can be done to renew it.

The generational contract reflects the fact that we judge the success of a society by how it treats its old, and believe strongly that each generation should have a better life than the one before.

However, the Commission warns that the public are increasingly questioning whether Britain is offering young people the prospects previous generations have enjoyed. This is not just confined to younger generations either, with healthcare now the most pressing area of worry for British adults.

The Commission finds that much of this pessimism is borne out by the evidence it has uncovered:

Income and wealth progress for young adults has stalled

New analysis shows that the disposable incomes of millennials at age 30 are no higher than the generation before them (generation X) at that age – despite the economy growing by 14 per cent over the last 15 years. In contrast, the incomes of baby boomers at age 30 were more than one third higher than the generation before them.
Millennials are half as likely as the baby boomers were to own their own home by 30, and are four times as likely to rent in the private sector.
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Our comment: That ‘Millenials’ are less well off than previous generations is understood, and the need for appropriate levels of funding for the NHS, though we believe that the cost should be shared by all. Older people have already lost the Age Related Tax Allowance.

Pensioners given ‘ASBO’ for putting plants outside their flat

Two pensioners were slapped with an “ASBO” for putting plants and a welcome mat outside their home of 35 years.

John Whelan, 70, and his wife Alicia, 67, were recently handed an “ASBO” for trying to brighten up the communal areas of Sefton Park tower block in breach of fire regulations.

Former project manager Mr Whelan said the corridor has been left looking like a ‘prison’ since residents of York House on Croxteth Drive were ordered to remove any decorations.

An injunction, which has been seen by the ECHO, was issued to Mr and Mrs Whelan in January, forbidding the couple from ‘placing any items in the communal areas’.

Mr Whelan claims the “ASBO”, which lasts for the lifetime of the couple’s tenancy, could result in the couple being evicted – if they were to break the conditions of the order.

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Our comment: is this really what ASBOs were intended for ?

Social care postcode gap widens for older people

Older people in England’s most deprived areas are twice as likely to lack the help they need for basic acts, like using the toilet or taking medicine, compared with those in the richest neighbourhoods, according to figures that expose gross inequalities in access to social care.

The official analysis is another sign that years of cuts have damaged the ability of councils in poor areas to meet the growing demand for care, potentially putting significant pressure on the NHS. It comes on the back of the crisis over social care that is still unresolved. There have been a series of warnings about a multibillion-pound funding black hole and increasingly severe consequences for the health service.

A third of men aged 65 and over in the most deprived areas (33%) have an unmet need for at least one so-called “activity of daily living”, such as washing their face and hands or getting out of bed. In the least deprived areas the figure falls to 15%. Meanwhile, 42% of women over 65 in the most deprived areas have an unmet need for at least one such activity, compared with 22% of their counterparts in the richest areas.

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Thousands of pensioners and working-age families at risk of losing their homes in a controversial benefits overhaul

The Government is scrapping its Support for Mortgage Interest (SMI) scheme and replacing it with a loan from next April 2018. The move could be a massive blow to thousands of low-income pensioners.

Thousands of pensioners and working-age families are at risk of losing their homes as part of a controversial benefits overhaul.

The Government has announced plans to scrap the Support for Mortgage Interest (SMI) benefit and replace it with a loan from April 2018.

The Department for Work and Pensions (DWP) has been sending out letters to 135,000 households – of which 65,000 are low-income pensioners – telling them to decide whether they want to take responsibility for the loan when the benefit is scrapped.

However, insurer Royal London has slammed the move, pointing out that claimants aren’t being told what rate the new SMI Loan will charge or being given enough guidance on taking out the state-backed second mortgage.

 

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State pension age to go to age 68

Teenagers and those in their twenties can expect to work to age 70 as the state pension age rises to cope with an ageing population and longer lifespans.

There are already a number of age increases planned, but that process is beginning to accelerate.

The Government has just announced that a planned increase to 68, due to happen between 2044 and 2046, will now take place between 2037 and 2039.

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The State Pension is taxed, why not The Winter Fuel Allowance?

We are surprised that subjecting pensioners to new means tests is being suggested for the Winter Fuel Allowance which may require an army of means testers. It would also subject many pensioners to a process that they feel very uncomfortable with. Our suggestion for a long time has been to make WFA subject to taxation in the same way as the State Pension is. We’ve never heard anyone complaining that the very wealthy enjoy the State Pension, so what is the problem with taxing Winter Fuel Allowance? The answer that many may give is that a lot of people will be affected by this, without necessarily being on a massive income. But at least the most needy would get the pension in full, and it would stop the continual bleating about this allowance being paid tax free.

An army of means testers needed ?

An army of means testers needed ?

Pensioners could ‘lose free TV licences

Free TV licences for the over-75s could be means-tested once the BBC takes over responsibility for paying for them from the Government.

The benefit is currently universally available for all aged 75 and older, meaning that one in six households or around 4.36 million people do not pay the annual licence of £147.

But the BBC is considering scrapping this benefit for better-off pensioners, who have just learned that if the Conservatives win the general election, they could have to pay significant amounts towards the cost of their social care from savings and the value of their homes.

Supporters of the BBC, including Lord Melvyn Bragg and Lord Puttman, are reported to believe that Theresa May’s manifesto pledge to means-test the winter fuel allowance is an opportunity for the corporation to do the same with the free licences.

Lord Bragg, who voluntarily pays the licence as part of a campaign to encourage wealthy pensioners to support the BBC, told The Sunday Times he thought means-testing would be “a very sensible idea”.

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Some constructive alternatives for funding care of the elderly

There are a lot of comfortably off pensioners. And lots of poor ones. And there are a lot better ways of finding money for elderly care than Theresa May’s manifesto commitment to whipping the houses off people who need care at home.

Under the Conservative’s plan, people needing either domiciliary (aka at-home) or residential care will have to pay for everything until the value of their assets, including their home, is down to £100,000. The Tories promise that no one will be forced to sell their home in their lifetime to pay for care, with the cost instead deferred and taken from their estate after death.
Care of the Elderly Costs
The plan is superficially seductive. The older generation have benefitted from spectacular – and largely unearned – increases in the value of their property. Why should younger working people, through income tax, pay for the galloping costs of elderly care when they can’t even dream of affording to buy a home themselves? Doesn’t it make more sense to instead take the money out of the congealed wealth sitting in property? And, indeed, there can be no justification for the state protecting the inheritances of the well off by taxing hard-pressed working people.

But there are two major drawbacks. Firstly, there is the risk that the elderly will delay seeking support at home because they won’t want to enter into a domiciliary care plan involving a charge on their property. They won’t get early treatment and will fall on the NHS.

The second drawback is more serious. No one chooses Parkinson’s or Alzheimer’s – they choose you. Health inevitably deteriorates in old age, but the conditions that will result in intensive care costs, whether domiciliary or residential, are largely random. A quarter of the over-85s are likely to develop dementia and a third will need constant care. But that leaves large numbers not in need of intensive care. Indeed, only one in eight over-85s are in care homes.

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We don’t for a moment think that someone in their 50s with breast cancer should have a lien put upon their home to pay for their care. We share the risk by paying through our taxes for the NHS and community care services. Why, then, should we think that a random third of the over-85s should have charges added to their homes but the other two-thirds not?

But that doesn’t take away from the fact that the increasing cost of care for the elderly needs to be found somewhere, and it would be unfair for the young to shoulder all the burden.

One of the oddities of the tax system is that we stop paying 12% national insurance on our earnings once we reach state pension age. The idea is that NI is basically a savings system that pays for our pensions, so once we’re in receipt of a pension we stop paying in. But NI, when first set up, was a system of insurance against illness and unemployment. If NI is supposed to help fund the NHS and care services, there is no reason why pensioners – the better off at least – shouldn’t be paying it, albeit at a reduced rate.
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