Money

Why retirement could be bad for your health

Sandra Haurant — 2013-05-16T09:00:00+00:00

The dream of early retirement seems sweet enough. Clocking off work for good, watching colleagues wave goodbye with envy in their eyes while you head off to spend time in the garden, travel the world or simply put your feet up with a good book.

But according to research published today, the reality may not be quite so rosy. A survey conducted among 9,000 people aged between 50 and 70 in 11 European countries showed that retirement could actually be detrimental to a person's health.

The Work Longer, Live Healthier study, published by the Institute of Economic Affairs and the Age Endeavour Fellowship, showed that retirement could have a negative impact on both mental and physical health over time. While, initially, people may be healthier on retirement, the research suggested that, over the medium-longer term, retirement causes a drastic decline in health for both men and women.

According to the research, retirement decreases the likelihood of being in 'very good' or 'excellent' self-assessed health but about 40%. It increasing the probability of suffering from clinical depression by about 40%, and the chances of being diagnosed with a physical condition increase by about 60%. And retiring earlier can actually make matters worse, as the longer a person is retired, the greater the issues become.

Edward Datnow, chairman of the Age Endeavour Fellowship, said in the Independent the report was a "wake-up call" for the UK's retirement lobbies. "There should be no 'normal' retirement age in future. More employers need to consider how they will capitalise on Britain's untapped grey potential and those seeking to retire should think very hard about whether it is their best option."

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What to do if you are retired and still in debt

lovemoney.com — 2013-05-14T09:30:00+00:00

Filed under: Retirement

One in three retirees is still paying off debt. If this is you, and you're worried about it, here are some options.

One in eight retirees still owe money on their mortgage, with the average amount owed a whopping £50,000, according to new research by pensions company MGM Advantage.

And over a third still have personal debts averaging nearly £7,000.

Worryingly, many of the mortgages with money still owing on them are interest-only mortgages, suggesting there may be no repayment plan in place to pay off the remaining debt.

If you're in this situation, you might be having sleepless nights wondering how you might find the money to pay these debts off.

Here are some options to consider.

Use your savings
If you do have savings, it makes sense to use them to pay off your debts, rather than carry on paying high rates of interest. That's particularly true right now as savings rates are so terrible.

Carry on working
It's not the answer most older people want to hear but working, even part-time, means you still have an income still coming in. Of course, there's the small matter of finding a job and the costs associated with working, such as transport, but if you are able to find a job that pays a decent salary then it is definitely worth considering.

Make cutbacks
You might already have cut back as far as you can. If you haven't, and you're struggling, then it's time to take a look at your household budget.

Write down all your spending for a month and take a look at areas where you might be able to save money.

For example, can you use your car less, or stop eating out? It's tough, but short-term pain can reap long-term gain.

And can you save money by switching your gas and electricity supplier, home insurance, car insurance and other household bills such as your home phone? Spend an hour or two shopping around and see if you can save.

Pay less for your debts
If you have debts such as bank overdrafts, credit cards or personal loans (and the MGM figures says over a third of retirees do), see if you can switch and save.

You could switch your overdraft to a current account such as the Santander Everyday Current Account, which offers a four-month fee-free overdraft.

Or you could pay it off with an interest-free money transfer from a credit card. Right now, the Fluid 24-month card and the MBNA Platinum card offer 24 months interest free on money transfers. You'll pay a fee of 4% of the money you're transferring.

If you have credit card debts, you could get an interest-free period of up to 26 months with a top 0% balance transfer card.

If you have a personal loan, you may be able to switch to a cheaper loan elsewhere. Just be aware of any early repayment or other charges you might incur if you move.

Top 0% balance transfer credit cards

Make sure you're claiming all your benefits
Research suggests that pensioners are missing out on around £5 billion a year by not claiming all the benefits they're entitled to. The GOV.UK Benefits Adviser can help you find out if you're eligible for benefits such as Pensions Credit, housing benefit and Council Tax benefit.

Shop around for an annuity
You shouldn't just accept the first annuity rate you're offered. See what else is on offer, particularly if you have a pre-existing medical condition as this could mean you'll get a higher annuity.

Track down old pensions
If you think you have an old personal or company pension that you've lost track of, you can use the Department of Work and Pensions' free Pensions Tracing Service.

Downsize
If you could live comfortably in a smaller home, then downsizing is definitely an option. If you really need to raise some money then moving away to a cheaper area could provide a decent nest egg. But bear in mind that if you're moving to somewhere unfamiliar you will need to make friends all over again and you could be far away from close family.

You don't have to sell your home to downsize - you could rent it out and rent a smaller place.

See if you can save by switching gas and electricity supplier

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Sir Alex Ferguson could improve your retirement

Sarah Coles — 2013-05-08T12:09:00+00:00

Filed under: Retirement

Sir Alex Ferguson has been a big figure on the British football scene for almost 40 years, so his decision to retire at the end of the season is seen as the end of an era. But while talk immediately turned to his replacement, for Ferguson, life will be about his options in retirement.

And his position highlights three vital retirement lessons that could make all of us richer.

Ferguson took the helm at Manchester United in 1986, and his time there has made him Britain's most successful football manager. There are those who love him and those who hate him - presumably it depends on the team you support - however, we could all benefit from learning three vital lessons from his retirement choices.

1. There's no such thing as a retirement age

There has been a great deal of disquiet about the raising of the state pension age to 67 - but Ferguson's retirement comes at the age of 71. It shows that we need to start thinking more flexibly about the notion of a retirement age.

For some people, our financial situation will dictate a later retirement age than we might ideally like, for others a love of our work may encourage us to stay on. In fact Ferguson originally retired in 2001, but changed his mind after deciding that it was simply to early for him to leave the game.

Whatever the reason, the earlier we adjust to the idea of flexibility around retirement, the better we will be able to handle the decision whether to retire or not when we hit the age of 60 or 65 - and the better we will be able to take the news that we cannot afford to retire when we thought we would.

2. Retirement is not the end of work

This is not the end of Ferguson's stint at the club. A club statement read: "The most successful manager in English football history will bow out after the West Bromwich Albion game on 19 May and join the football club board." Ferguson said: "Going forward, I am delighted to take on the roles of both director and ambassador for the club. With these activities, along with my many other interests, I am looking forward to the future."

Working in retirement is increasingly common. For many people working within the same organisation in a less demanding role makes a great deal of sense - as they have built up knowledge and expertise they can use in their new role. It makes sense for us all to consider the opportunities to work in our own retirement, so we can lay the groundwork well in advance.

3. You need to consider your pension options

Ferguson's own pension arrangements are no-one's business but his own. However, according to Hargreaves Lansdown, someone of a similar age, with a similar history of heart conditions, could get an annuity of 7.75%, as long as they shopped around and targeted the enhanced annuities available to those with certain medical conditions.

This sort of rate is unheard of for most people - a typical annuity at the age of 60 would be little more than 5% - and at 65 would still be under 6%. It goes to show how important it is to shop around for the best possible annuity when we retire - taking both our age and health into consideration.

Of course, it goes without saying that Ferguson is likely to have a more comfortable life in retirement than the vast majority of people in the UK. However, there's the chance that if we learn the three lessons of his retirement, we could improve our own situation significantly.

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Cap pledge for elderly care costs

Press Association — 2013-05-08T12:00:00+00:00

Filed under: Retirement

A £72,000 cap on elderly care costs and new legal rights for carers has been promised in the Queen's Speech.

Tougher checks on hospitals, including an Ofsted-style rating system, on the back of the inquiry into the Mid Staffordshire hospital scandal are also being brought forward under the Care Bill.
The measures are part of a package that ministers say will join up health and social care to boost protections for patients and simplify the system.

Care cost reforms were left out of a draft Bill published by the coalition last year, sparking fears the plans would be kicked into the long grass, but earlier this year the Government announced it would introduce a £75,000 limit on bills in England.

A month later in the Budget, plans were announced to accelerate the introduction of the cap, bringing it in at a level of £72,000 in 2016 - a year earlier than originally intended.

The limit is more than double the £35,000 recommended by the independent Dilnot Commission in 2011 but the Government said today it would "give everyone peace of mind by protecting them from catastrophic costs".

Under the Bill, the threshold for financial assistance will be extended. It was originally expected to go up from £23,250 to £123,000 but under the Budget revisions will be set at £118,000 in 2016.

Ministers believe certainty about the maximum bill people could face will allow everyone to buy insurance to protect them against the possibility of care costs.

In a joint introduction to the speech Prime Minister David Cameron and Deputy Prime Minister Nick Clegg said: "If you have contributed all your life, you should be rewarded in retirement. So we will introduce a Bill to cap social care costs, meaning that pensioners do not have to sell their homes to fund care."

The Bill includes a number of measures in response to the Robert Francis inquiry into Mid Staffordshire NHS Foundation Trust, which found as many as 1,200 patients could have died after they were ''routinely neglected''. It will enshrine proposals outlined by Health Secretary Jeremy Hunt in March to give a new chief inspector of hospitals, a so-called ''whistleblower-in-chief'', powers to shine the spotlight on failing trusts.

An Ofsted-style ratings system - where hospitals and care homes will be ranked on their performance - will be introduced and it will become a criminal offence to provide false or misleading figures about how well they are doing.

Sir Merrick Cockell, chairman of the Local Government Association, said: "The priority is fixing the financial crisis engulfing adult social care. Local authorities are facing an estimated £2.7 billion reduction in funding to provide support for vulnerable residents. The stark reality is that if such vast sums of money continue to be taken out of the care system, it could be in very real danger of collapse."

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Four in ten set for inheritance shock

Sarah Coles — 2013-05-02T09:39:00+00:00

Filed under: Retirement

By far the majority of us expect to inherit something from our parents. For some people it's a handy nest-egg to pay off the mortgage, for others it's the only thing that will keep them solvent in retirement. For some families, inheritance may well be the most important part of their wealth (such as William and Harry), however, new research has revealed that in the real world four in ten people will get nothing.

So where has the money gone, and what can we do to protect ourselves?

Relying on the money

Skipton Building Society found that 75% of people aged 20-35 expect to inherit from their parents. Their expectations are impressively high - and they are hoping to receive an average of £78,000.

Many have come to rely on the money. The research showed that a fifth are counting on their parent's inheritance to help them get out of debt, while another fifth hope they'll finally be able to step foot on the property ladder. A quarter hope they'll be able to pay off the mortgage and 15% are banking on having it to put their own children through university.

Particularly worrying is the fifth who are hoping their parent's wealth will sort out all of their money problems, and have completely shelved all financial plans for the future as a result.

Shock

Unfortunately, the research also showed that a great number of them are in for a nasty surprise. While 84% of parents would love to be able to leave thousands of pounds to their offspring in order to carve out a comfortable future for them, they have chosen to spend much of the money on the family now - four in 10 have already been giving their children hand-outs to help them with college fees, driving lessons and rent payments.

Meanwhile, 49% of parents aged 50 and over have already had to dip into their savings to get by. Stacey Stothard, Corporate Communications Manager at Skipton Building Society, said: "The sad reality is when times are tough financially for children, they're also tough for their parents, so it comes as little surprise that many have had to dip in to chunks of their savings to get by. What's more, many parents who can see their children struggling financially are increasingly sharing their money with their children while they're alive and well. It goes without saying that this will impact on any inheritance later on."

Protect yourself

It reveals just how dangerous it is to rely on an inheritance for anything. Stothard says: "The knock on effect could see children sleepwalking into a financial nightmare, basing their financial plans on something they actually might never receive. Rather than second-guessing their parents financial matters, people should never ignore the benefits of investing a little time into fully understanding their own."

The answer is, therefore, to get to grips with your finances, and make plans of your own. You need to be saving towards things like property ownership, education for your offspring and your retirement yourself. If you want to factor inheritance into those plans (and many millions of people will), you need to talk to your parents about it - to be certain that your expectations match their intentions.

As Stothard says: "No matter what your financial circumstances, it's much better to recognise where you are and to review your financial affairs regularly, rather than place a dependence on benefiting from someone else's. Doing the latter is a big gamble, and in today's financial climate, it might not pay off."

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Ministers disagree in benefits row

Press Association — 2013-04-29T04:00:00+00:00

Filed under: Retirement

Coalition ministers have traded blows over pensioners' benefits after Iain Duncan Smith urged the wealthy to hand the money back.

The Work and Pensions Secretary said he would "encourage" people to forego perks such as free TV licences and winter fuel payments.

But Deputy Prime Minister Nick Clegg responded by attacking the Tories for blocking means-testing of the benefits.

Mr Duncan Smith's Conservative Cabinet colleague Ken Clarke said he did not believe it was even possible to return money to the Government.

David Cameron has stood by his general election pledge to protect universal benefits for pensioners until at least 2015, despite the coalition's austerity drive.

But in an interview with the Sunday Telegraph, Mr Duncan Smith repeated his view that wealthy pensioners should consider repaying the money. "It is up to them if they don't want it to hand it back," he said. "I would encourage everybody who reads the Telegraph and doesn't need it to hand it back."

Interviewed on the BBC's Sunday Politics, Liberal Democrat leader Mr Clegg said: "I have always argued for us to change the system. I do not think it is reasonable for us to say to a working family who has just had their child benefit taken away... why should they through their taxes pay for the multi-millionaire pensioner next door for his TV licence or his winter fuel payment? I think we should grasp this nettle just as we have grasped other nettles in government. The Conservatives don't want to do so."

Asked about Mr Duncan Smith's comments, Mr Clegg said: "I think the idea of saying in the meantime, you give people benefits and then you say, 'Oh, by the way, can you please give them back?' - I don't think that makes sense. Let's be clear about this. When money is tight, you have to have the right priorities in tough times."

Mr Clarke, 72, refused to say whether he personally returned the universal benefits he is entitled to. "It is certainly the case when it comes to a bus pass and when it comes to the winter fuel all taxpayers should decide and recipients should decide what to do with it themselves," he told the Murnaghan programme on Sky News.

"You can't hand it back to the Government. I don't think it is a system for doing that. Every pensioner and retired person like myself has to make up their own mind about whether they really need it and whether they are going to give it to some worthwhile cause. No doubt most pensioners who are reasonably prosperous give quite a lot of money to charity and worthwhile causes in any event."

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Video: 350 pensioners are aiming to top the charts for charity

Emma Sleight — 2013-04-26T06:00:00+00:00

Filed under: Retirement

Singers and musicians living in Anchor Care Homes and retirement properties across the country have released a charity single in the hope of raising money to combat loneliness.

The group have named themselves the Anchor Community Band and their song, See Yourself, was inspired by comments about loneliness and isolation from older people from England, Scotland and Wales.The track was recorded by over 350 musicians in aid of Contact the Elderly, which combats loneliness and social isolation among older people.

The national charity organises monthly afternoon tea parties for small groups of people aged 75 and above who live alone and supports volunteer hosts and drivers within their local community.

Band members include trumpet player David Speedy, 70, and wife Denise, 69, who live at Anchor's Martham Court in Harpenden.

Denise, who is a grandmother of four, said: "I first started singing at the age of ten in school and then joined a church choir. Music is everything to me. You can turn off and become a different person; music just takes over."

"We feel very proud that we have contributed to a record which will hopefully raise lots of money for a worthwhile charity. We're aiming to get into the top 40!"

The track's production costs were covered by Legal & General so that all income from sales, up to £15,000, will go to Contact the Elderly. In addition, all profit from the sales will be donated to the charity.

The band's musical director Carl Martin said: "Rehearsing for this song over seven weeks with lots of older people living in Anchor properties has been such an amazing experience.

"It's a really powerful song because the words are telling younger people that older generations are exactly the same as them, with just a bit more life experience. It's now time to go out and buy the song to raise money for a fantastic cause and help us get into the charts!"

See Yourself is available to pre-order as a download on iTunes and as a CD on Amazon.co.uk now.

It is released officially on 3 June, when you'll be able to download it from iTunes and buy the CD from Amazon.co.uk.

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Pensioners 'should share the pain'

Press Association — 2013-04-22T05:00:00+00:00

Filed under: Retirement

Pensioners should "share the pain" of austerity cuts and pay more tax to promote inter-generational fairness in the housing market, a think-tank has said.

The Fabian Society claimed high-levels of home ownership among older people threatens fairness, as middle-income workers' wages stagnate and they cannot afford to buy a home.

More than three-quarters (76%) of pensioners now own homes, compared with just over half (58%) 20 years ago, while the last decade has seen a "dramatic fall" in home ownership among under-45s, the think-tank said.

In 1979, the year Margaret Thatcher came to power, middle-income working age households enjoyed an income 93% above that of middle-income retired households. That figure is now 37%, the study showed.

The society said this had "profound implications" and there should be a "presumption of equality" as "old age is no longer a proxy for poverty". It said: "In public policy and deficit reduction measures, ministers should adopt a presumption of equality across age groups. In financial terms alone, older people are no longer distinct and blanket policies favouring them should be reviewed."

The society argued that pensioners' taxes should increase, their benefits be cut, and a tax on property wealth should be introduced.

The key policy should be to raise taxes on pensioners so the 27% they pay as a portion of their gross income would rise to 33%, in line with working age households with the same income. This would raise £7.2 billion every year, the society said. But the project should be long-term, to avoid a sharp drop in living standards.

In the meantime, the Government should consider measures such as taxing private pension lump sums, as part of a "grand bargain" that would help fund universal care services.

Specific universal benefits such as the winter fuel allowance - which contributes 3% to middle earning pensioners' incomes - could be re-assessed without threatening the wider principle of universalism, the think-tank said.

The Fabian Society was invited to carry out the research by Hanover, one of the UK's largest providers of old people's housing. The think-tank said it "analysed data to explore the incomes, wealth, housing and social circumstances of older people in the middle - and the implications for public policy and services".

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Care home residents supported by hand-outs to meet fees

Adrian Holliday — 2013-04-09T12:30:00+00:00

Filed under: Retirement

Rising numbers of elderly people are being supported with cash hand-outs from family and friends to meet local authority care home fees. Care home analysts Laing & Buisson says the number of state-funded older care home residents paying top-up fees have risen 4% to 56,000 a year.

But some may be moved if these fees can't be paid - and the distances could be considerable.

Fees pressure

Top-up fees can be paid by family and friends when a home is picked that costs more than the fee a local authority will usually pay. However if top-up cash isn't paid, then care home residents can be switched to cheaper places where fees are lower - sometimes hundreds of miles from friends and family.

The issue of top-up fees affects the poorest and most vulnerable older people, says Age UK, which claims that local authority funding for social care has fallen in real terms since 2010, causing a third of those entitled to state support to scratch around for more cash.

According to Laing & Buisson, on average English councils are paying £480 per week for residential care in 2012/13, approximately £50-£140 less than the 'fair market range' price of £528-£623.

No choice

"Age UK hears from its advice line that in practice people are all too often given no choice but to pay a top-up as there are simply no suitable places available at the local authority's agreed baseline fee rate."

And while Government has committed to implementing a cap on care cost, this may not provide older people with the security they need if contributions towards the cap are calculated on deeply unrealistic rates says Age UK.

Payback?

A toxic mix, says Age UK Charity Director General Michelle Mitchell, "of long term chronic underfunding and more recent austerity cuts to social care budgets is resulting in local authorities stretching their budgets and paying unfeasibly low fee levels to care homes. This in turn undermines the residential care sector, forcing homes to cut costs."

Older people have contributed towards society throughout their lives, adds Mario Ambrosi from Anchor, a not-for-profit provider of housing for older people. "At their time of need they can expect adequate support from the state. It clear that the Government still needs to do more to address the social care funding crisis."

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Expat pensioners' income decimated

Adrian Holliday — 2013-04-05T08:30:00+00:00

Filed under: Retirement

The buying power of expats has been hammered in the last 10 years. New stats reveals that the buying clout of eurozone expats, on average, has plummeted by 22%.

However the greatest buying power hit has been endured by UK expats in Australia. Currency squalls has seen their buying power decimated - by up to 47%.

Still the lucky country?

In a new survey of 50,000 expats, pensions administration company Equiniti claims an expat living in the eurozone with a £5,000 annual pension ten years ago could expect an income of €7,300. Today, that £5,000 would buy you just €5,692.

The biggest losers, says Equiniti, are people who moved to Australia who have seen a £5,000 pension plunge from AUS $13,625 to AUS $7,253, a drop of 46.7%. These expats are additionally penalised because their UK pension is frozen - a double blow - despite, in many cases, a long history of building up state insurance payments.

Jamaica and South Africa winners

"Ten years ago the value of sterling," says Equiniti Paymaster Keith Boughton, "was significantly higher than it is today, and those emigrating abroad for their retirement enjoyed considerable value from their pension. A plummeting pound has left many expat pensioners unable to make ends meet and struggling to find other ways to protect the value of their pensions."

However, better news for expats heading for South Africa and Jamaica where there has been an increase in the buying power of their pension during the past ten years.

Property upside

Globally, most retired people will find it difficult to escape surging food prices as supply chains become increasingly connected and the influence (and power) of commodity price speculation increases.

Bear in mind though that British expats who bought property in Australia ten years ago will likely have done well in terms of capital appreciation. Australia has seen property prices surge massive in the last five years (though questions are being asked about its long-term sustainability).

Day-to-day cashflow however is a different issue.

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You can be healthier and happier - eventually

Sarah Coles — 2013-03-27T09:23:00+00:00

Filed under: Retirement

There's good news for anyone who wishes they could be fitter, have more exciting hobbies, and go on holiday more. All of these things are within your grasp - it's just that you're going to have to wait a while to get your hands on them.

Because a new survey has shown that this is what retirement means nowadays.

The study, by Skipton Building Society, found that most people retire in good health nowadays, and instead of looking forward to some quality time with their sofa and their TV, they are getting the chance to do all the things they put off when working full time. Some 76% of people plan to be as busy and active as possible, before their body gives up the ghost.

The best things in life

Retirees get to do the good things in life. They take an average of three holidays a year, and 29% have plans to travel the world properly. Some 40% intend to take up old hobbies, while on average retirees spend at least two days and one evening a week socialising.

They also get to do those things which seem too hard to squeeze into a working day - including keeping fit. More than 50% do more exercise than they did in their 20s, with hiking, swimming and cycling listed as the most popular activities. Just under half say retirement is a great time for all those things you don't have time for in your youth.

Meanwhile one in four do charity or volunteer work. One in ten have also attended evening classes, or gone back into higher education, and 11% plan to learn a language in retirement.

Stacey Stothard from Skipton Building Society, says: "Years ago the general perception was that once you had given up work and entered retirement, you'd pretty much had it. You were on the journey to your grave. But these days people have a much brighter attitude to retirement, acknowledging the fact that actually, there's a good third of your life left to enjoy. As such people are embarking on activities which would once have seemed risky for a pensioner to try - such as Zumba, dance classes and aerobics."

"We're seeing a generation of pensioners who are every bit young at heart - and quite possibly more on the go than people half their age."

Protect your nest egg and download this free brochure: 10 Tips to improving your pension.

The sting

It sounds like a wonderful future, where we all get everything we always wished for. However, there's a major sting in the tail. This sort of retirement is available to people retiring now - with plenty of equity in the homes they bought in their 20's, and their generous final salary pensions.

The future for younger people, with no property to speak of, no pensions saving, and the prospect of waiting until their 70s before they qualify for a state pension, is altogether more alarming. There's every chance that instead of exploring the world, earning a degree, and getting fit, they'll be working all hours to make ends meet.

The only solution is to take control of our own future, and save for our retirement. The question is whether anyone has any cash left for this anymore, or whether the golden age of retirement will soon be gone forever.

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Son spends mum's savings instead of paying for care

Sarah Coles — 2013-03-27T07:58:00+00:00

Filed under: Retirement

Simon Shonn (49), of Suthers Street, Radcliffe, Bury, was given control of his mother's savings when 75-year-old Irene Shonn's Alzheimer's meant she needed to live in a care home. He was meant to pay the home £665 a week for living costs, but instead blew the lot.

His case came to court, so what was his punishment? And how can we avoid Irene's fate?

The fraud

According to The Bolton News, Simon Shonn took control of his mother's affairs in 2010, when she moved into Heathlands Residential Care Home in Prestwich, Manchester. He had been living on carer's allowance, as the sole carer for his mother, but lost this when she went into the home.

But instead of adjusting to live on a far smaller income, Simon decided to live on his mother's savings. He blew around £50,000 on luxuries, from home improvements to TVs and computers, new clothes and going out. The prosecution told the court that a 'significant amount' had been spent at HMV. In the interim the outstanding bill for his mother's care hit £29,000.

He had spent all the money, so could not cover the costs, leaving his mother facing the threat of eviction from the home. In the end the local authority stepped in and picked up the bill.

Punishment

He admitted fraud at Bolton Crown Court. He was sentenced to 300 hours community service, a curfew for six months, and a 21 month jail sentence suspended for two years.

The Daily Mail reported that Judge Peter Davies explained why he was sparing him from jail, saying: "This was a grave offence, however you are the only family member who cares for your mother and that is to your credit. You continue to look after your mother as she endures this dreadful condition... I have to think what is the public benefit, you are unlikely to commit further offences, you are not a danger. Your mother may not know what was going on and looks forward to your visits and I would not wish to deprive her of that."

Protect yourself

It raises the importance of carefully weighing up your options before signing a 'lasting power of attorney' agreement. You can draw these up while you are of sound mind, to indicate who you would like to control your affairs if you lose the ability to deal with them yourself. They can relate purely to your finances, or health, or both.

These replaced enduring power of attorney agreements in 2007 (although in Scotland the system involves a continuing power of attorney and in Northern Ireland it's still an enduring power of attorney).

These are far cheaper and simpler to arrange than trying to sort things out after someone has lost mental capacity - although they are by no means cheap.

According to Winston Solicitors 15% of people abused their rights under the EPA system, using the donor's money to fund their own lifestyle. So it's essential that you use someone you trust completely.

If you are unsure, you can appoint two people, and can insist that they both agree any decisions made about your finances. If you lose faith in someone after appointing them, you can revoke the power and set up another one. Again this will cost you some cash, but certainly less than if the wrong person is in charge of your money.

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Are you in denial about ageing?

Michelle McGagh — 2013-03-21T11:00:00+00:00

Filed under: Retirement

Retirees today aren't what they used to be: they're off climbing Kilimanjaro and taking pottery classes rather than picking up their pipe and knitting needle.

The conclusion is that people don't seem to be getting old anymore and if we're not getting old then we don't have to worry about pensions and long-term care. Hooray! Or is it?

Baroness Greengross, chief executive of the International Longevity Centre believes 'our society is in denial of the inevitability of ageing' and this has led us to 'put off the difficult decisions for far too long'.

These difficult decisions are about saving enough for our retirement and having enough money in the bank to pay for decent care if we can no longer care for ourselves.

There's a very good chance that you're going to get old and there's an increasing chance that you're going to spend some of your twilight years in care. The problem is no-one wants to think about either of those things; maybe it's because of we start thinking about getting old and needing care then we start thinking about death and pondering our own mortality is never a happy past time.

Chances are you're not pondering these question but don't worry, you're in good company; the government isn't thinking about it either.

According to the Public Service and Demographic Change Committee the cost of age-related spending issue to increase from 21% of GDP in 2016/17 to 26% in 2061/62. To put it in perspective that's an increase of £79 billion in today's money.

According to the committee there has been a lack of joins up thinking when it comes to age-related costs, all of which have left our pensioners with little to live on, a confusing care system and a healthcare system that is unable to deal effectively with their needs.

It's not a surprise that we're all living longer but the government has put its head in the sand when it comes to dealing with these problems, leaving them all to fester.

Individuals need to look at how successive governments have handled the issues and cots around ageing and note its failings. The chances are you are making the same mistakes; not saving enough for retirement, assuming long-term care is something that other people need, assuming that you can always stay in your home without making modifications.

Thinking about these problems now and dealing with them in advance will ensure you don't find yourself in the situation that the government finds itself in. It may be troubling to think about old age now but it will give you peace of mind when you get there.

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B&Q employee celebrates 90th Birthday

Sarah Coles — 2013-03-14T12:30:00+00:00

Filed under: Retirement

Albert Billington, one of the UK's oldest workers and B&Q's oldest staff member, celebrated his 90th birthday by arriving for work at B&Q. He has worked for the company for over 23 years - starting after retirement from the print industry at the age of 67. The Store Manager said: "He really is a shining example of the fact that age is really just a number and that you're only as old as you feel."

But is this a great example of how working in retirement can be good for your health as well as your wealth - or is this a worrying sign of the future?

Record numbers of people are already continuing to work past 65. Research from Saga shows that 27% of people who are currently over the age of 50 expect to work past this age. B&Q is proud of the diversity within its workforce with over a quarter (28%) of store employees aged over 50.

Positives

Research from Prudential shows that one of the driving forces behind working later is that people are not ready to stop work at 60 or 65. More than half (55%) of those considering working past State Pension Age believe it would keep their minds and bodies active and healthy, compared with 40% who are motivated by boosting their retirement incomes. Almost as many (38%) say they would be happy to work on simply because they enjoy working so much.

Saga also say it's good for business, pointing out that: "As people in later life are more likely to bring extensive knowledge and experience to a job, Saga encourages employers to be more open to employing older workers."

And the group argues that it's good for the economy: "By keeping more over 65s economically active, we will be improving the medium term job prospects for the economy, since millions of older people pulling out of the labour force with inadequate pensions would leave less money to spend on leisure, services and consumption which ultimately means fewer jobs and lower growth for younger generations too. A social revolution seems underway, and the more people embrace these opportunities, the better for all of us."

The negatives

However, there is a flip side. Many are working on because they simply don't have the means to retire. Stan Russell, Prudential's retirement income expert acknowledges: "Retiring at 60 or 65 years old is no longer a financial reality for many people."

For some people, working in retirement is not a positive lifestyle choice. It's a case of slogging to a job they have long-since grown sick of. Alternatively, it can mean taking on work they take no pleasure from and get nothing out of but a paltry paycheck at the end of the month. For them the idea of celebrating their 90th birthday at work is a living hell.

But what do you think? Would you work in retirement? Let us know in the comments.

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2.3m give up work to be carers

Press Association — 2013-03-07T07:05:00+00:00

Filed under: Retirement

More than two million people in the UK have given up work to care for disabled, sick or elderly relatives and loved ones, according to a survey.

More than one in five of the adult population, or 22%, have seen their work affected by caring responsibilities, with an estimated 2.3 million leaving jobs to care for a loved one, revealed an online poll for the charity Carers UK.
Almost three million people have reduced their working hours to cope with caring responsibilities, showed the survey of 2,073 adults conducted last month.

The hardest hit were 45 to 54-year-olds, where more than one in four, or 27%, reported that caring had taken a toll on their work.

The findings have prompted Carers UK and the group Employers for Carers to call for more support for people attempting to juggle work and caring roles.

Carers UK chief executive Helena Herklots said: "As with childcare a generation ago, employers can play a critical role in shifting how we, as a society, support people with family responsibilities.

"But support from employers can only go so far, and families need to be able to access reliable, good quality and affordable care and support services to enable them to juggle work and care.

"Without urgent action from Government to ensure families can access this support, millions more will see their careers and earnings suffer - with long-term personal costs to families and significant costs to business and the UK economy."

The figures have been published after the 2011 Census in England and Wales showed one in 10 residents, a total of 5.8 million people, devotes at least part of their week to caring for disabled, sick or elderly relatives and loved ones without any expectation of payment. This is an 11% rise on the 5.2 million unpaid carers recorded in the 2001 census.

The greatest increase was among those providing more than 20 hours a week of care, with the number rising from 1.66 million a decade ago to 2.1 million in 2011. Nearly 300,000 extra people are dedicating 50 or more hours a week to looking after family and friends, with the figure now standing at 1.36 million.

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£10,000 cost of basic pensioner living

Jess Bown — 2013-03-06T08:00:00+00:00

Filed under: Retirement

Maintaining even a basic standard of living now costs pensioners in the UK more than £10,000 a year, according to new research from Key Retirement Solutions.

Its figures show that a typical pensioner spends £10,020 a year on essentials such as housing, heating, food and drink.

They also reveal that pensioners spent a total of £103.9billion on basic living costs last year, with more than £16.4billion of that going on housing and energy bills.

Dean Mirfin of Key Retirement Solutions told the Daily Mail: "The basic cost of living for a pensioner covers only the basics, without much scope for emergency spending or any luxuries. The state pension is a vital safety net, but cannot deliver all the income needed."

Not all pensioners are in the same boat, though. Where they live in the country has a massive impact on the amount they require to cover basic living costs.

Those living in London, for example, spend close to £12,300 a year on day-to-day essentials, while those living in the Welsh capital Cardiff can get by on just £8,180.

"It is clear that where you live matters very much in how expensive your life in retirement will be," Murfin added. "The £4,100 gap between Cardiff and London is a major difference."

The study indicates that, as might be expected, London is far and away the most expensive British city for pensioners to live in.

However, other cities where life is expensive for older people include Belfast, where the annual cost of maintaining a basic standard of living is £9,929, and Bristol, where the average pensioner spends £9,862 a year.

At the other end of the scale, older Britons living in Hull spend just £8,596 on the same items, while those in Newcastle have an annual bill of £8,221.

And while Londoners might argue that the benefits of living in the English capital make the extra cost worth paying, the website Whycardiff.com - which is aimed at people considering a move to the Welsh capital - begs to differ.

"Cardiff offers all of the features and benefits of a capital city, at a low cost," it said.

Most expensive cities for pensioners
1. London - £12,300
2. Belfast - £9,929
3. Bristol - £9,862

Cheapest cities for pensioners
1. Cardiff - £8,180
2. Newcastle - £8,596
3. Hull - £8,596

Download this handy booklet on 10 tips to improving you pension for free!

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Last-time buyers: top tips for the over-50s buying their final home

lovemoney.com — 2013-03-04T12:15:00+00:00

Filed under: Retirement

Just because you have bought and sold properties before doesn't mean you can't make mistakes. And you need to get that all-important last home right.

The family home is cherished by many, and it's difficult to let go of. But sentimentality doesn't pay the bills and sometimes a large family home simply becomes unmanageable as the occupants get older.
There are many reasons that older homeowners decide to move house and there is certainly no typical last-time buyer. Some upgrade to their dream property because they have the money, want a bigger home, and why shouldn't they? Others move to be closer to family, especially when grandchildren come along.

Many downsize to release equity to help fund retirement, while others are motivated by the lower running costs of a smaller home. For older homeowners with mobility issues, bungalows become attractive as do small retirement flats in buildings with lifts.

It's each to their own, of course, but whatever your reason for a last-time buy, make sure you consider all of your options first. The tips below include some of the major things you should consider, but remember to take independent and professional advice if you want to be clear how your home could affect your inheritance, cost of care and eligibility for State benefits.

1. Don't overstretch yourself

It sounds obvious, but many people do overstretch themselves on their last purchase, because they want that really special home and they figure they can afford it at the moment.

But ill health doesn't always come with a warning, and it's a sad fact of life that serious illness is more common when you reach your sixties and beyond. You might be planning to work until you are 75 but your body may not agree. Equally you might get made redundant and there isn't exactly an abundance of jobs out there. Many older jobseekers reckon it's particularly hard for them to find work in the current climate.

Mortgage lenders will also restrict your ability to borrow into your old age, with most limiting mortgage terms to finish by your 75th birthday, and of course you have to prove that your income stacks up. But it's up to you to be cautious too, because if you get it wrong you may have to sell your dream home, and there are no guarantees that you will get the price you want for it.

2. Consider downsizing

It can sound pretty patronising when well-meaning younger people suggest that you should downsize, because why the heck should you? Indeed, if you are in your fifties or sixties you may not feel particularly old or immobile.

Nevertheless, many last-time buyers do decide to downsize to a smaller property that will be more manageable when they are older. And it's certainly worth considering, because a property that is easier to get around is a home you can stay in for longer if you do become ill or have impaired mobility. If you intend this move to be your last, it makes sense to consider a property that will suit your final years, as well as the next few.

Smaller homes are also easier to clean and cheaper to heat - something that might become important when you are not working, and possibly spending more time in your property than you currently do.

3. Location, location, location

You may picture yourself spending your later years in an idyllic rural retreat, and that's ideal for some. No doubt you currently drive a car and can easily get to where you need to be. There is no reason you can't drive a car until the day you die, but in practice many people do stop driving in their later years, or cut down the number of longer journeys they need to make.

Because of this it's important to consider access to public transport when you think about the location of your last-time buy.

Equally, a property within a bustling community gives you access to other people, shops, libraries, doctors and other amenities. These things do become more important when you retire and also sadly, if you lose a partner. The notion of being isolated seems quite alien to those of us with busy lives, but the fact is that's exactly how many older people on their own feel.

4. Be practical

Many people would baulk at the idea of a retirement flat because, even though they are available to over 55s, there is a perception that they are really more suitable for much older residents. And some people mistakenly think that purpose-built retirement flats are a bit like old people's homes. Of course, they are nothing like that (and there's nothing wrong with old people's homes anyway!), with residents having their own flat and total privacy, like in any other apartment building.

They might have benefits that could prove useful later in life though - like accessible shower baths, 24-hour security, lifts to all floors, and access to care. Plus you are less likely to find that your neighbours are party animals (though it's possible).

They can also be good value and are usually located close to transport links and amenities. Contrast this with a quaint country cottage that might look just perfect, until you try to manage the crooked stairs, low doorframes and two mile walk to the post office.

5. Get advice

When it comes to your last-time property purchase, many older homebuyers are considering their inheritance. Perhaps you are thinking of downsizing to release equity to gift to your children now, or perhaps you want to upgrade to a more valuable home that you want to pass on.

Whatever your preference, it's crucial that you seek both financial, legal and tax advice. Not only are there issues surrounding Inheritance Tax, but increasingly people are beginning to think about the possible cost of long-term care and your property's value comes into play here, along with your other assets.

You need to be clear about how gifting money and property to your children works because if you get it wrong there could be unintended consequences that affect you and your children. A good legal and tax adviser will be able to explain your options, and a financial adviser will look at the best deals available if you are planning to buy your last home with a mortgage, or if you are considering releasing equity in the future.

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Grandparents helping with handouts

Press Association — 2013-03-04T10:00:00+00:00

Filed under: Retirement

One in six generous grandparents is helping their squeezed grandchildren jump financial hurdles with cash handouts, research suggests.

Some 15% of those surveyed said they are helping the young generation with costs such as university expenses and buying or renting a home, a survey for Investec Wealth and Investment found.
Almost half (47%) of grandparents who give financial help said the money goes towards paying down their grandchild's debt or helping them deal with high day-to-day living costs.

The typical amount that grandparents said they were paying out to their younger relatives was £2,496.

Older people living in Wales were found to be the most likely to be giving their grandchildren a helping hand, with one fifth (21%) of people surveyed there saying they did this.

Youngsters in Scotland were also among those more likely to be receiving help from the bank of granny and grandpa, as were those living in London, the Midlands and Yorkshire and Humberside.

Nick Gartland, senior financial planning director at Investec, said: "We have a number of cases where a grandparent's son or daughter has lost their job and they have had to provide significant financial help to ensure their grandchildren don't lose out.

"Many grandparents are also conscious of the impact of inheritance tax and believe it makes more sense to see the younger generation benefiting from their assets during their lifetime."

More than 1,000 grandparents took part in the survey last month across Britain.

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Early winter fuel payments on the way?

Adrian Holliday — 2013-02-28T09:30:00+00:00

Filed under: Retirement

Country dwellers eligible for a winter fuel allowance payment - worth £200 to £300 for anyone over 80 - could see their cash early, allowing them to buy off-grid fuel before winter prices start to bite.

The move is supported by energy minister Baroness Verma. If approved, it could help shave hundred of pounds off energy bills for many.

Advance payment?

An advance in the timeline of the winter payment would help around 1m UK pensioners who live in rural areas, forced to buy their energy supplies off-grid (it's thought around 15% of consumers are not linked to the national gas grid).

The move is needed given that average energy bills now cost consumers around £1,400 a year. Yesterday British Gas saw an 11% hike in profits, helped by a 6% price rise in November (British Gas has also paid out £3.5bn in dividends paid out to shareholders in recent years).

The Oil Firing Technical Association, quoted in the Telegraph, claims the average typical rural household could have recouped £170 if heating oil was bought forward to June 2010 compared with buying in mid-winter, due to seasonal shifts in energy pricing. The move is supported by Citizens Advice.

Budget ahead

"People who are not connected to the gas grid," says Citizens Advice, "and therefore rely on heating oil or LPG to keep their homes warm in the winter have to pay for their fuel in bulk and up front. Our evidence shows that people on low incomes, including the elderly, can find it very difficult, or in some cases impossible, to afford to fill up their tanks ahead of winter."

To qualify for the payment in the winter of 2012-13, you have to be over 60. Or your birth date must be on or before July 5 1951. The Winter Fuel Payment is tax-free and not means tested, so it doesn't matter whether you are working or claiming benefits.

However there remains much debate over whether it should continue to be means-tested. Last winter, it was paid to almost 13 million people at a total cost of £2.1bn to the taxpayer. But senior Lib Dem Paul Burstow claims it should only to go those claiming pension credit - currently around 2m (even though 3m are eligible).

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Rules for retiring Pope: what does he keep?

Sarah Coles — 2013-02-27T07:30:00+00:00

Filed under: Retirement

This is the first Pope to have retired since Medieval times, so unsurprisingly the rules about what happens to a former pope have been somewhat lost in the mists of time.

The Vatican, however, has revealed all. So what happens on a Pope's retirement? And how does it compare to what lies in store for you?

Costume change

The name change will come immediately. He can't go around calling himself the Pope, and will have to settle for Pope emeritus or Pontiff emeritus. He will, however, still get to be called His Holiness. This, a Vatican spokesman revealed, was decided in consultation with Pope Benedict and his advisers.

The Pope currently cuts a dash in his white robe, red shoes and red cape. He will continue to wear the white robe, but sadly he loses the right to wear a cape - unless of course he takes up a retirement hobby involving crime fighting in which case a cape may be suitable attire once more. He will also be denied the right to continue wearing the papal red shoes, and is expected to favour brown instead.

He'll lose his Fisherman's Ring, which will be destroyed along with the lead seal of the pontificate.

New life

Aside from that, he'll lose the right to the Swiss Guard. He'll still keep a security detail, but that will fall to the far-less-flamboyantly-dressed Vatican Gendamerie.

He does, however, get to stay in a monastery in Vatican City - which may lead to some awkward moments in future if he bumps into his near neighbour, the new Pope.

Sadly he has also taken his final ride in the Pope-mobile before he retires to a life of contemplation and prayer.

Compares

It makes the average retirement seem remarkably straightforward. You get to walk out of the gates for the final time without a backwards glance. You can wear what you like, be called what you like, and indulge a fondness for capes to your heart's content.

You can live wherever you want, and however you wish, and nobody is going to notice - let alone pass judgment.

Of course, there's a chance you may not be looked after so well, and your living quarters may not be so handily placed. There's also the probability that you will get a bit less attention and adoration in your golden years.

But on the plus side, at least your decision to down tools at the age of 85 isn't going to lead to global speculation that you're a bit of a slacker.

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