It’s said that like wine and cheese, some things get better with age. I’m never sure whether MoneySaving skills fit that or they’re a bit more like raw meat.
Either way, a whole gamut of new financial challenges open up as you get older.
Yet don’t think there’s nothing you can do. For the over-50s, it’s crucial to get on top of the changes.
So get active, and tool up on knowledge…
All change for anyone nearing retirement
In the Budget, the Chancellor announced sweeping changes to pensions. From 2015, no-one will be made to get an annuity, the product you buy to convert a pension pot into a regular income for the rest of your life.
From 2015, at the age of 55, you’ll be able to take 25% of your pension savings as a tax-free lump sum. You can then access the rest when you need it but you’ll pay tax on that. For many, this flexibility's a boon. Yet the danger's some will use money up too quickly.
Retiring between now and then? Never just take your pension company's offer rather than finding the best rates – you'll lose out each year for the rest of your life, so amounts can be huge, eg, £11,000 lost on £100,000 over 25 years.
You now also have the choice of waiting to draw down. If you do get an annuity (which isn’t wrong for everyone), you can’t change your mind. If you don’t know what you’re doing, get Independent Financial Advice (see www.unbiased.co.uk ).
You're entitled to it...
As you get older, a host of entitlements become yours.
This includes bus travel for the over-60s (62 in England) and free Tube and bus travel for Londoners. You’re also entitled to a www.senior-railcard.co.uk which costs £30, but gets you 1/3 off rail travel. Over-60s also get free prescriptions in England (in the rest of the UK you don’t ever pay anyway).
If anyone in your home is aged over 75, you can bag a free TV licence for the whole house.
You’d be surprised how many people don’t know this, as one woman emailed me the other day: “My husband had no idea he qualified for a free TV licence until your weekly email yesterday. Now we're getting 3 years’ fees refunded - £400+."
And if anyone in your home was born before 5 January 1952, you're due up to £300 in tax-free winter fuel payments. Plus anyone on specific income support/jobseeker's allowance, or pension credit gets £25 for every seven days it's sub-0°C.
Free travel insurance for up-to-75s
Older travellers get milked by insurers as costs rise outrageously. But costs don’t need to be huge. One trick is the no-fee Nationwide FlexAccount, which includes annual travel insurance if you’re aged 74 or under. You’ll need to properly switch your bank account to it to get it though, and you need to pay in £750/month income to qualify.
If you don’t fancy that, then prices vary greatly with age. At 50, the cheapest single traveller annual policy with reasonable cover levels is £15 in Europe, by 70 it’s £56, by 85 it’s £276. Full best buys are at www.mse.me/travelinsurance. With all these policies and the banks, do ensure you declare any pre-existing medical conditions.
Over-50s' discounts & freebies
B&Q, Odeon, Specsavers... Age has its privileges. There's a free over-50s' dining card for meal deals at 100+ pubs 'n' carveries. Over-60s get 25% off Specsavers, 10% off B&Q, cheap cinema tickets and more. There’s a full list at www.mse.me/50plus.
In fact, my tip is (this works better for pensioners): if they offer a student discount, try asking for a pensioner one too. They can only say no.
Have the 'unpleasant issues' chat, including losing your faculties
Hopefully you'll live healthy and happily until you're 183. But in case problems arise, it's best to deal and communicate sooner and openly with your family.
- 1 in 3 over-65s develop dementia. Unless you've a Lasting Power of Attorney, which allows loved ones to take over your affairs, they need to apply in court, which can be hard and costly. Yet don’t think that if you get a Power of Attorney you need to give up control now, you can put it in place in case you lose your faculties. More info at www.alzheimers.org.uk.
- Unlike dementia, death is assured. We will all die, and it’s important to plan for it. This includes making a will so your assets go where you want. Discuss your preferences for funerals and care with your loved ones, and plan inheritance tax if you’ve assets that take you over the £325,000 threshold.
- Compile a financial factsheet with info loved ones can access. If you’re in a couple where one of you looks after all the finances, this can risk the other being left in the lurch if something happens. So list down all the products you have, whether cards, breakdown, mobile, insurance or investments (without too much security info) and put it somewhere safe that you both know about so you're not the sole source of info.
Are you in the 1m missing out on up to £35/week pension credit?
The full state single pension's £110/week, yet if your total income is under £145/week or even if you've some savings, you may be entitled to a top-up with pension credit. Call 0845 60 60 265 to talk to the Pension Service helpline and find out.
These are just the tip of the iceberg. For my full 50 tips for the over-50s, see www.mse.me/50plus.