Pre-Budget Report - Festive Cheer or a Tale of Woe for Pensioners?

Brentwood, United Kingdom (PressExposure) December 12, 2009 -- Has the pre-budget report brought festive cheer for pensioners, or has it done little to make a difference to the recession-hit retired population? Organisations such as Age Concern, Help the Aged and the National Pensioners' Convention think the Chancellor is giving with one hand and taking with the other.

State Pension Rise In April 2010 the full state pension is set to rise by 2.5% from £95.25 to £97.65 for a single pensioner and from £152.30 to £156.16 for couples. However, Dot Gibson, general secretary of the National Pensioners' Convention, said: "One in four pensioners still lives in poverty and rising costs of food and fuel, combined with record lows in savings returns and underperforming pensions, mean that pensioners continue to suffer a disproportionate increase in the cost of living."

It is believed that the cost of living in retirement is increasing more than amongst other sectors of society. Charities say this is because more money is spent by pensioners on food, heating and lighting. This, combined with the substantial drop in retirement income over the past 12 months due to low interest rates and the fact that the VAT rate will revert back to 17.5% on 1 January, spells financial concerns for the over 60s.

Andrew Harrop, Head of Public Policy at Age Concern and Help the Aged said: "Many older people will be relieved that the Basic State Pension and Pension Credit will both increase above planned indexation. Yet the Government has missed a golden opportunity to promise to restore the link between Basic State Pension and earnings by 2012. Sliding beyond this date will plunge an additional 70,000 pensioners into poverty, saving relatively little for the Government - an estimated £250 million a year after 2012."

Working beyond Retirement Age The Chancellor says he will make it easier for people to continue working beyond retirement age by reducing the number of hours they need to work before claiming working tax credit. Hours will be cut from 30 to 16 a week from April 2011; however this announcement may well be met with mixed feelings too. Geoff Charles of Bower Retirement Services feels that whilst some older people may welcome the news, many others won't necessarily want to work later on in life. He says: "If you work hard throughout your life, you deserve to enjoy your retirement years by resting, spending time with your family and doing the things you always looked forward to. And what's more, as you get older, managing a day's work is likely to become physically difficult."

Free Travel Cutback Free travel is currently available to all from the date of their 60th birthday. Eventually, however, due to changes in the age limit from April 2010, passengers will find themselves waiting until their 65th birthday to qualify for free travel. As of April, there will be an extra month's wait before qualifying for a bus pass and the threshold will rise by a month every two months until 2020 by which time three million over 60s will no longer be eligible for a bus pass. Even next year some 92,000 people will be denied the bus pass they were expecting as they reached their 60th birthday.

Bingo Tax Lowered Strange it may be, but bingo is subject to a tax of its own. Currently this stands at 22% but is set to be cut to 20%. However, according to one leading online bingo news resource, this is yet another one of the Chancellor's give and take moves and whilst they welcome the news, they are quick to point out that it was only recently the tax was increased by 7% from 15%.

So, does the pre-budget report bring festive cheer for pensioners? Or is it more a tale of continued woe? A quote from Mervyn Kohler, spokesman for Help the Aged, summarises: "The Government has turned a blind eye on older people. Squeezed by high inflation on basic goods and services, especially fuel, older people were desperately looking for substantial help this winter - but the chilling message from the Chancellor is 'keep struggling'."

About Bower Retirement Services

Bower Retirement Services is an Essex-based FSA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England and free on-going, lifelong customer support. For more information visit http://www.brsequity.co.uk, telephone 01277 262724 or e-mail info@brsequity.co.uk.

Press Release Source: http://PressExposure.com/PR/Bower_Retirement_Services.html

Press Release Submitted On: December 12, 2009 at 10:45 am
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