Benefits and tax in retirement
Research has revealed* that more than £5 billion of means-tested benefits go unclaimed by retired people each year
Here’s a rundown of the different benefits and other support that are available to retirees
The basic State Pension gives you a regular taxable income for the rest of your life
The amount you get from the basic State Pension will depend on how many years of National Insurance contributions you’ve accumulated, so it’s not means tested
The full basic State Pension for 2013/2014 is currently £110.15 a week.
You may need to be drawing State Pension to be entitled to certain benefits
Pension Credit provides additional retirement income if you are on a low income. The qualification for Pension Credit is gradually rising in line with the state pension age
Even if you find out you’re only entitled to a small amount of Pension Credit, it is worth claiming it. This is because it can help you qualify for other benefits, like Housing Benefit, and help paying Council Tax
Guarantee Credit tops up your weekly income if it’s below £145.40 for single people or £222.05 for couples
Savings Credit is an extra payment for people aged 65 or over who have saved some money towards their retirement
Although Council Tax Benefit was scrapped in April 2013, you can now apply for Council Tax Reduction if you pay Council Tax and are on a low income and claiming certain benefits
You can apply for Council Tax Reduction whether you own your home or rent
Winter Fuel Payment 2014/15
Anyone who was born on or before 5 July 1952 is currently entitled to between £100 and £300 to help with the cost of energy bills during the winter months.
Payments tend to be made automatically between November and December
People who receive certain benefits such as Pension Credit may be entitled to a further payment of £25 if local temperatures drop or they are forecast to fall to zero degrees Celsius or below for seven consecutive days between 1 November and 31 March
People on a low income who live in poorly-insulated homes or without central heating, as well as those receiving Pension Credit, can apply for State assistance. Different heating schemes are in place around the UK
You can contact Home Heat Helpline on
0800 336699, or visit the Money Advice Service guide on benefits in retirement to find out more
Over 60s are entitled to free prescriptions and eye tests. Everyone is entitled to free prescriptions in Northern Ireland
If you have a disability, long-term illness or special care needs you may be able to claim either a Personal Independence Payment (if you are under 65) or an Attendance Allowance (if you are 65 or over)
The rate you are paid will depend on the level of care you need
A full Council Tax bill is based on at least 2 adults living in a home.
You’ll get 25% off your bill if you count as an adult for Council Tax and live on your own.
You’ll also get a discount if you live with people who don’t count as adults for Council Tax.
Who doesn’t count?
These people are not counted as adults for Council Tax:
- children under 18
- people on apprentice schemes
- 18 and 19-year-olds in full-time education
- full-time college and university students
- young people under 25 who get funding from the Skills Funding Agency or Young People’s Learning Agency
- student nurses
- foreign language assistants registered with the British Council
- people with a severe mental disability
- live-in carers who look after someone who isn’t their partner, spouse or child
- diplomats
Depending on your age and where you live in the UK you could be entitled to free or discounted bus travel. In some regions of the UK, you could also get concessions on rail and other fares
The Disabled Persons Railcard also provides a discount, with a third off most fares for the cardholder and a companion
Disabled drivers can apply under the Blue Badge Scheme for a pass enabling them to park in some restricted areas, such as on yellow lines
The government’s Motability scheme allows disabled people to lease a new car, mobilityscooter or powered wheelchair, without needing to pay road tax
If you were born before 3 September 1929 and are a British national you could apply for a free 10-year passport
Some products, including big purchases such as mobility vehicles can be purchased without paying VAT, or at a reduced VAT rate of 5% if the buyer is registered disabled. This is subject to approval from HMRC and proof of disability
You are able to get a free TV licence from the age of 75, and can apply for a short term licence if you are 74
This is valid until the end of the month before you turn 75
If your spouse or civil partner has died as a result of their service in Her Majesty’s Armed Forces or during a time of war you may be entitled to a War Widow’s or Widower’s Pension
To claim, contact the Service Personnel and Veterans Agency on 0800 169 2277
*Age UK research
All information accurate as of 17/01/2014
This article is provided by the Money Advice Service.
