Category Archives: pensions

Paying for care in old age


So the Conservative manifesto is out and now we know their plans for dealing with car in our old age. Of course, the Labour cretins are already spouting that they’re penalising defenceless pensioners and are going to risk killing a few off…

Let’s look at the simple one first – the winter fuel payment. Every year each pensioner household gets a coupe of hundred quid towords their energy bills. I general spend it on a case of decent wine, but I digress. Labour say that abolishing it will hit the worse off and pensioners will die because they can’t afford to heat their homes.

This is patent scare mongering from McDoughnut and co. The Tories are not intending to take it away from the poorest people because they’re going to means test it. So people like me won’t get it and I’ll have to buy a case less of decent wine at Christmas or fund it myself. To me – and I suspect many other in my financial position – it’s sensible. for the poorest pensioners, it’ll not effect them. More Project Fear from Labour!

Now let’s look at care costs and what’s proposed. At the moment people who are looked after in residential homes must pay for their care if they are judged to have assets worth more than £23,250 and those assets include their property.

Under the new scheme, they will be assessed to get a picture of their finances and if their combined savings and property are valued at more than £100,000, they will need to pay for their care. If they want to hang on to their home, they can defer payment. The state will deduct the cost from their estate when they die.

So on the face of it, instead of selling your home to fund care you’ll get to keep it until you die. Those in residential homes currently pay when they have assets of £23,250 and that will rise to £100,000 so it’s hard to see how this can be spun as leaving them in a worse position however hard the other parties may try.

What’s labour’s solution to addressing pensioners paying for their care? Well, I studied the manifesto. On page 54, it bangs on a lot about what it calls ‘dignity for pensioners’ yet strangely there is no mention of care costs. If I’ve missed it, please tell me where it is.

It’s a knotty problem, but as far as I can see the Conservatives are at least talking about it and putting forward a plan. Labour just seem to be ignoring and accepting the status quo, whilst at the same time slagging of the Conservatives. Predictable really…

The cost of Freedom…

freedom-in-the-shape-of-a-cross
A lot of bullshit has been talked over the last week or so about the costs of Brexit in terms of collapsing stock markets and the falling value of the pound, so I thought I’d dig into it a little.

I started with my own pocket. I don’t have a pension because I worked for myself before I retired so my pension comes from investments that I made over the years in PEPs and ISAs, and unit trusts that I invested in. There’s also a pot of money I made when I downsized and moved to a cheaper area of the UK. I think that makes me a pretty good arbiter of whether I’m better or worse off after Thursday’s vote.

On paper, I’m about £6,000 worse off on my portfolio since last Wednesday night, but interestingly I’m about where I was the same time the previous week. In fact I was worse off on paper when dear old Gordon gave us the financial crisis. So in terms of share values, Brexit has cost me bugger. In any case it’s a paper loss. If I don’t sell the shares, then I’ve still got them and not the cash. Having held them for donkey’s years, I’m not about to cash in just yet.

Of course the big holiday I’m taking next year in South Africa just got more expensive because the pound has dropped a bit. Except that the Rand has jumped about quite a bit too, so if we’re trying to guess whether Brexit has cost me more on that one, it’s still anybody’s guess.

And if you look at the pound against the Euro, it’s down to around 1.23 today. However, I found an old exchange receipt from a previous holiday in the back of the drawer and, guess what? 1.24 to the pound! No big drop – more like big deal!

The worse thing that happened to me was when interest rates plummeted. When I retired 7% was easily achievable on 1 year fixed term. Today it’s around 1.6% so my income dropped accordingly. Even after Brexit I should still be able to get something around that so I’m not panicking.

All in all, I think UKIP summed it all up nicely. “It was a very British apocolypse – it was all over by teatime!”

Emergency budget next week then, Gideon?…

Migrants in English Channel

News from the English Channel yesterday as a boat load of men were spotted in the English Channel off Dover.

The boat was intercepted by the Coastguard but surprisingly it was not heading to, but away from the UK, towards Calais.

Another surprise finding was that it was loaded with white British Citizens, who were all seniors of pensionable age.

They claim they were trying to get out of the EU so as to be able to return to the UK later as illegal immigrants, and therefore be entitled to far more benefits than they were receiving as legitimate British pensioners.

They were given food and water and assisted safely on their journey.

We are booking on the next boat out.

Let me know if you want to come…

Happy New Year!

Yes, it’s New Year again. No, I haven’t lost my marbles…

It’s the 6th April, that day when you’ve just lost your ISA allowance and you can look forward to filling in your tax returns.

And this New Year we have an election to look forward to which probably means that next New Year you’ll have even more complicated tax returns to fill in. Hoorah!

I love the New Year. It gives me an opportunity to collect interest certificates from all the banks I deal with that I always have to chase. Then I get to update all my spreadsheets to keep track of my complicated financial life. It was so much simpler when I was an employee and just had a salary check coming in each month. Keeping track of your pensions and investments when you retire and live of the proceeds of selling your old house can be a right royal pain in the arse.

So, for this Easter holiday I shall be head in computer trying to get it all done – and the sooner the better because for some strange reason HMRC always seem to have overdeducted my tax and I need to claim it back. Of course if I owe them money, then I get charged penalties and interest but if they owe me money, I get bugger all. Funny, that…

So to one and all : Happy New Year

You can’t trust a pensioner…

What’s all this about letting pensioners have access to their pension pots and allowing them to spend their own money? Outrageous! You can’t trust the buggers an inch…!

It’s good that this government has done away with the legalised daylight robbery that is the annuity based pension plan. For years, investment companies and insurers have been taking your money, paying you the same interest you would have got if you’d put in the bank yourself and then trousering your cash when you die.

I’ve personal experience of this. I have a pension drawdown plan that enables me to leave my pot in my will should I die before 75 – the age at which until recently I would have been force to hand it over and buy an annuity. I’ve always thought this was an appalling way to have to deal with a pension pot so I was pleased when the government did away with it. Of course the pension provider will still rip me off at 75 because I will have to change plans in order to keep my own money and, no doubt, he will charge me for the priviledge. Still, it was a step in the right direction.

Now, it seems, they are proposing to go a stage further and actually let us spend our own money and trust us to do it prudently. Interesting therefore that a recent report from Liverpool Victoria – or LV as they prefer to be trendily named these days – suggests that in the first five years of retirement, pensioners blow loads of their dosh on ‘frivilous’ shit like laptops, cruises, holidays, and theatre trips –  and later regret they have been so recklessly profligate. Scandalous! But then, LV would say that, wouldn’t they? They do have a vested interest.

On average – and we have to take all averages with a pinch of salt – newly retired pensioners between 65 and 70 spend around £33,000 on these frivolities in the first 5 years which represents and overspend on income of around £1,300 a year.  Now you’ll have to forgive me if I don’t find that exactly reckless, given that when you first take you pension you get up to 25% of the pot as a tax free lump sum.

And the point is, surely, that having worked all their lives they are entitled to let go a bit on retirement and enjoy some of their newly found freedom while they are still young enough and fit enough to do so.

So let’s not forget that it is their money, not the governments and not LVs. And if they were that  reckless at frittering away their dosh, presumably they wouldn’t have put it into a pension plan in the first place…