We call upon the Chancellor to take note of the ‘Pensioners’ Protest Song before making his final decisions.
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.
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.
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.
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”.
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.
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.
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.
Proposals effecting pensioners are coming thick & fast from the Tory Manifesto. Our resident pundits Ted & Fred discuss some major issues on using the value of your property to pay.
The Scottish National Party (SNP) has accused the Conservatives of doing the ‘bare minimum’ for older people and of ‘shameful’ treatment of pensioners.
In the run up to the general election in June a key battleground is over the state pension, with Labour pledging to keep the triple lock on the state pension but the Tories yet to make a commitment to this.
SNP MP for Ross Skye and Lochaber Ian Blackford has today claimed the Tory Party is u-turning on the triple lock and depriving pensioners of support.
‘The Tories have turned their back on our older people,’ he said.
‘As well as potentially u-turning on the triple lock on the state pension, they have done absolutely nothing to encourage older people to claim the vital financial support they are entitled to. Instead, the Tories are happy to let almost £300 million sit in the Treasury’s coffers rather than try and get extra support to those who need it.’
Our comment: We try to be non political, but will bring you news affecting pensioners from all political parties.
Thousands of over-60s normally eligible for free bus travel could now have to pay to ride due to a massive backlog in renewing permits.
People are facing delays of up to 28 days as Lincolnshire County Council deals with 6,000 applications a month rather than the usual 1,200 to 1,500.
This is because 67,000 passes are due to expire this year and demand is high despite the council advising people as early as last autumn to apply six months before expiry dates. It normally takes up to 10 days to issue a renewed pass.
Read more at http://www.lincolnshirelive.co.uk/thousands-of-over-60s-face-waiting-up-to-28-days-for-free-bus-pass-renewal-in-lincolnshire/story-30285097-detail/story.html#hMQ2ggA5ytRMqJUD.99
Theresa May is coming under pressure to spell out her plans for pensions, after failing to commit the Conservatives to preserving the “triple lock” guarantee after the general election.
The Prime Minister dodged a question on pensions at a campaign event where she committed the party to maintaining its controversial promise to spend 0.7% of national income on international aid.
Meanwhile, Chancellor Philip Hammond signalled that he wants the upcoming Tory manifesto to drop the party’s pledge from the 2015 election not to raise income tax, national insurance or VAT over the life of the next Parliament.
Read more: http://www.dailymail.co.uk/wires/pa/article-4433242/May-urged-reveal-pensions-plan-dodging-triple-lock-question.html#ixzz4ey9Yb100
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Pensioners with “defined benefit” pension arrangements could lose up to 30 per cent of their retirement income under controversial new plans being considered by the Government.
A green paper published today by the Department for Work and Pensions suggests that struggling companies could soon be allowed to remove the so-called “gold plating” which protects the value of former workers’ benefits by ensuring their pension incomes rise with inflation.
It is the first time the Department for Work and Pensions has suggested it might allow firms to break the pension promises they have made to staff, without first going through the courts.
More than 11 million workers have final salary pensions and could be affected by the possible overhaul, as pressure mounts on the Government to make them more sustainable.
It comes as the total funding “black hole” in UK final salary pension schemes has for the first time topped £1 trillion, prompting experts to conclude they are too costly to keep going in their current form.
Baroness Altmann has claimed its “ridiculous” that affluent pensioners receive the benefit without a tax penalty – which could help fund social care
AN ex-Pensions Minister is calling for rich pensioners to be taxed on the winter fuel allowance.
Baroness Altmann says it is “ridiculous” they are not — and that the tax penalty could help fund social care.
The Sun on Sunday can reveal just 518 OAPs have declined the payment, which ranges from £100 to £300 and used to help pay heating bills in the winter months, since 2011.
Total government expenditure on it is around £2billion and it is paid to more than 12million pensioners.
Our comment: this has been a recurring hot chestnut over recent years, but so far governments have not responded. Many people forget that the State Pension is taxed for those with sufficient income. We advocate an increase of 25% in the allowance which is then paid with state pension payments, which will be taxable. That way those that need it will get the full amount, and those on higher incomes will be taxed on it.