retirement

Applying for pension credit

My Experience of Applying for Pension Credit

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In this recent blog post I discussed how over-75s may be able to avoid losing their free TV licence by claiming pension credit.

As I said then, I have recently done this myself on behalf of an elderly couple who are friends of mine. As promised, today I’ll be sharing my experience of the telephone application process. I hope anyone thinking of doing this themselves or on behalf of elderly friends or relatives may find this helpful.

But first, let’s recap on what pension credit is…

Pension Credit

Pension credit is a state benefit for people above retirement age who are on a low income. It can be paid to single people or to couples. It is usually paid weekly, though you can also choose to have it paid fortnightly or monthly.

Along with attendance allowance – which I discussed in this recent post – pension credit is one of the most under-claimed benefits. According to the Department for Work and Pensions (DWP), around 40 percent of eligible people, or two in five, fail to claim it. That’s an estimated 1.5 million eligible households in the UK who are missing out.

Pension credit actually comes in two parts – guarantee credit and savings credit. Guarantee credit boosts your weekly income to £167.25 if you’re single or £255.25 if you’re a couple (all figures correct as of March 2020). You may be eligible for guarantee credit if you have reached state pension age and your total income is less than these amounts (even if you own your own home). If you have under £10,000 in savings and investments this will not be taken into consideration. If you have over £10,000, it will be assumed that you earn £1 a week per £500 of savings and investments (equivalent to an interest rate of 10.4%). This will be added to your total income when working out your eligibility.

Savings credit is meant to be a reward for those who have saved for their retirement. It’s worth up to £13.73 a week for a single person or £15.35 for couples. To qualify, you must have a minimum income of £144.38 a week if you’re single, and £229.67 a week if you’re in a couple. For every £1 by which your income exceeds this amount, you get 60p of savings credit – up to the £13.73/£15.35 maximum. If your income is less than the £144.38/£229.67 savings credit threshold, you won’t qualify.

While for most people pension credit won’t be a huge amount, it has the big advantage that it acts as a gateway to a range of other discounts and benefits. The free TV licence for over-75s is just one of them. Pension credit recipients may also get reduced council tax (or free if awarded guarantee credit), free NHS dental treatment, help towards the cost of glasses, help with the cost of travel to hospital, cold weather payments, automatic entitlement to the Warm Home Discount, help with rent, free home insulation and boiler grants, and more. All of this means it is well worth applying for, even if you’re not certain whether you qualify.

Checking Your Entitlement

The government is keen that anyone eligible for pension credit should claim it. To that end they recently launched a free online calculator you can use to work out whether you qualify and how much you might get.

You can use the calculator anonymously to check your entitlement (or someone else’s), either as an individual or a couple. You can’t actually apply via the calculator, though. It is just for guidance, to help you decide whether it’s worth putting in a claim.

The calculator asks a variety of questions about your circumstances and current income, including any pensions or other benefits you may receive. The latter may actually improve your chances of getting pension credit. For example, if you receive attendance allowance and/or carer’s credit (as my friends do) this can improve your chances of qualifying. When I did this on behalf of my friends, the calculator showed that they should be eligible for a payment of just over £10 a week.

As mentioned above, the results on the calculator are for guidance only, and there is no guarantee that you will receive the amount shown. However, in my friends’ case it definitely confirmed that applying would be worth doing.

Applying for Pension Credit

By far the easiest way to apply for pension credit is to phone the DWP’s Pension Credit Helpline on 0800 991234. You will need to have your National Insurance number, information about your income, savings and investments and your bank account details to hand.

If you’re applying on someone else’s behalf, the DWP like you to have the person concerned with you at the time. The call handler spoke briefly to my friend to confirm her personal details and that she was happy for me to take over the application process.

It turned out to be a two-stage procedure. Initially I spoke to a male call handler who asked a list of questions about my friends’ circumstances and their finances. This was basically the same set of questions I had answered on the online calculator. It was reasonably straightforward, and at the end he informed me that my friends did indeed appear to have a valid claim, so he was going to put me through to his colleague who would take me through the actual application.

This meant that I had to answer the same set of questions again from another DWP employee – a woman this time, as it happens. This did strike me and my friend as rather a waste of everyone’s time. We wondered why the answers I had given initially couldn’t just be passed on to the second person, but I suppose the DWP must have their reasons.

Anyway, we duly went through all the questions (and a few more) again. I would, incidentally, comment that the young woman I spoke to – who told me her name was Jenny – was extremely pleasant and helpful. At one point we went off at a tangent and started talking about our favourite cakes (well, it was tea-time by then). I felt she went out of her way to help us, and she certainly made the whole application process a lot less stressful.

After going through all the questions, Jenny said she would need information about how much exactly was in my friends’ bank accounts and when their (small) private pensions were paid in. This could have been problematic, as it involved logging in to my friends’ online bank accounts and finding this information there. But Jenny was patient and flexible about this, and in the end we found all the information she needed.

The whole process took a little over an hour. if you have to break off half-way through that is possible and you can ask for a reference number so you can complete the application another time. But I really wanted to get the whole thing done and dusted in one call, and thankfully – with Jenny’s help – we achieved that.

The Outcome

After about six weeks my friends received a letter from DWP saying their application had been successful and they had been awarded pension credit.

The amount was the same as had been shown on the online calculator. It was about £10.50 a week, going up to almost £12 in April (I’m sorry I can’t remember the exact figures). This money was savings credit rather than guarantee credit, but that makes no difference as far as the free TV licence is concerned. If you are over 75 and qualify for either type of pension credit (or both) you are entitled to a free TV licence.

We then submitted the short application form to the TV licence people, with a copy of the first page of the DWP letter confirming the award of pension credit. We haven’t heard any more since, but presumably my friends will receive their free TV licence in the coming weeks.

So that was my experience of applying for pension credit on my friends’ behalf. I hope it has encouraged you to proceed with your own application if you are considering making one. If you get to speak to the lovely Jenny in Scotland, do pass on my regards to her!

And if you have any comments or questions about this post, of course, pleased free free to leave them below as usual.

This is a fully updated repost of my March 2020 article.

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So why does a money blogger need a personal financial adviser?

So Why Does a Money Blogger Need a Personal Financial Adviser?

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…that’s the question I was asked recently by a Pounds and Sense reader after I mentioned in this blog post that I had a financial adviser.

Of course I replied to her directly at the time, but on reflection I thought it would be good to provide a more in-depth answer to this question on the blog.

To recap, my financial adviser is called Mike and he works for a company called Integrity Wealth Solutions. I was recommended to Mike by my accountant, and he has been advising me for over three years now.

Mike actually looks after about half of my portfolio. He advised me about this initially and set up the recommended investments on my behalf, making maximum use of my tax-free allowances. He continues to monitor my investments and makes any recommendations for adjustments as required. I see Mike once a year in person to review how things are going (both with the investments and me personally). But of course, I can also speak to him by phone (or email) any time if required.

The other half of my portfolio I look after myself, and it is fair to say it is well diversified! As regular readers of PAS will know, I have investments in property crowdfunding, P2P lending, the robo advisory platform Nutmeg, and various others.

Why then do I need Mike? Here are just some of the reasons…

1. Mike is a trained and experienced independent financial adviser/planner who works full-time in this field. I am a money blogger and obviously have a special interest in financial matters, but I have no professional training or direct work experience in this field. I can ask Mike for his professional opinion on any investment-related matters, and while I am not obliged to follow his advice I do of course take it very seriously.

2. Mike has a backup team in his office and access to specialist investment research services and software. He uses these resources to inform his advice, and also to provide in-depth reports (with snazzy-looking charts and spreadsheets!) regarding how my investments are performing.

3. As a regulated financial adviser, Mike has to follow all the correct protocols and ensure that all advice he gives follows best professional practice and is appropriate for my needs and circumstances. He cannot cut corners, invest on a whim or hunch, or let himself be distracted by the latest ‘bright shiny object’ in the investment world. I have to admit that I have been guilty of all of these things myself in the past!

4. As a professional financial adviser Mike also has access to certain investment opportunities or platforms that are not easily accessible to the general public. I won’t go into detail about this here, but it is certainly something I have had occasion to be grateful for in the current coronavirus outbreak.

5. Mike is able to provide personalized but objective advice about my finances, based on information I give him. Money and investment can be emotive subjects, and it’s great to have a sympathetic – but at the same time sensible and detached – professional advising you. I am sure Mike sometimes sighs inwardly at some of my more exotic investments, but he is always interested in what I have been doing with ‘my’ half of my portfolio and happy to offer his thoughts as appropriate.

Are there any drawbacks to having an adviser? Well, of course, you have to pay them! In the case of Mike I paid an up-front fee initially and now pay a small monthly commission. Hand on heart I can say that Mike is well worth his fee, and even in the current exceptional circumstances his charges have been more than covered by the amount by which my investments have grown.

So that is why I have a personal financial adviser. If you are fortunate enough to have money to invest, I strongly recommend you consider engaging one too.

If you would like to find out more about the service offered by Mike and his colleagues at Integrity Wealth Solutions, you can check out their website and contact them on 02476 388 911, or email them at advice@integritywealth.co.uk. They are friendly and not at all pushy, and will be delighted to talk you through the service they offer without obligation. If you do get in touch, please mention that you were recommended by Nick Daws of Pounds and Sense blog. If you end up becoming a client they have said that they will pay me a small fee to say thanks. This will help to cover my costs and ensure I am able to go on sharing tips and advice to Pounds and Sense readers.

As always, if you have any comments or questions about this post, just let me know.

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AdviceBridge review

AdviceBridge: A Personalized, Affordable Retirement Planning Service

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Today I’m spotlighting a pension advisory service called AdviceBridge that may be of interest to any Pounds and Sense readers who are planning for their retirement.

There is no doubt that in recent years retirement planning has become more challenging. The pension reforms introduced by George Osborne in 2015 gave people much more freedom over how and when they can access their retirement savings. There are many benefits to those reforms – and I’m a fan of them myself – but it does mean most people now have big decisions to make over how to finance their retirement.

A further factor is the decline of ‘defined benefit’ pensions. These guaranteed a certain pension usually based on how long you had worked for an employer and how much you earned during your career. The great majority of working age people nowadays have ‘defined contribution’ pensions, where you build up a pension pot over the course of your working life. This then provides you with an income (alongside the state pension and any other investments) when you retire. Anyone with a pension of this type will have important choices to make over how, when and where to save for their pension, and what to do with it once they reach retirement age. Many people who are not financial services professionals understandably struggle with this and need some expert help (I did myself).

Getting professional financial advice can be expensive – typically pension advisers in the UK charge £2,000-£3,000 up front and then 0.5% a year. But a new service called AdviceBridge promises a personalized, affordable retirement planning service. Indeed, they say they can do this for as little as a tenth of the average adviser fee, partly by running the service online and over the phone (no face-to-face meetings required).

Although it is a low-cost service, AdviceBridge is staffed by fully trained and regulated financial advisers, and the company is authorized and regulated by the Financial Conduct Authority (FCA). AdviceBridge never holds investors’ money, even when they assist in the implementation of a retirement plan. The advice they give is though covered by the Financial Services Compensation Scheme (FSCS), which means clients can claim compensation of up to £85,000 if they receive bad advice.

Who Is AdviceBridge For?

In order to keep their charges low, AdviceBridge say that at the moment they are only able to help clients who meet the following criteria:

  • You are resident and domiciled in the UK.
  • You are generally in good health.
  • You do not have any unsecured loans.
  • You are not currently contributing to pensions with safeguarded benefits such as a final salary pension.
  • You do not own any buy-to-let property or any non-standard investments.
  • You do not receive any means-tested benefits.
  • You would like to plan individually, not as a couple.

How Does It Work?

Assuming you meet the criteria above, you start by filling in an online questionnaire and completing some electronically-signed compliance documents.

As well as the usual contact information, the questionnaire covers such matters as:

  • your age
  • your employment status
  • your annual income
  • any existing private or company pensions
  • whether you will qualify for a full state pension
  • other savings and investments
  • your target retirement age
  • how much income you hope to have in retirement
  • any major outgoings in future you need to plan for
  • and so on

Once you have entered this information, you can create and log in to your account to see an overview of your financial situation. You can adjust the parameters in order to achieve a realistic and sustainable level of retirement income. Here is a screen capture showing part of this (an example account, not mine personally!).

AdviceBridge Example

Personalized Plan

Naturally, the above is just the first stage of the process. Once you have provided this information and set up your account, the AdviceBridge advisers will crunch the numbers and (with the aid of their specialist software) produce a personalized plan for you.

This is obviously a key document. The sample plan I saw came to 39 pages in PDF form. It was divided into three sections: About You, Our Recommendations and Advice, and Appendices.

About You sums up the information you have provided to AdviceBridge via the questionnaire. It covers your personal circumstances, your retirement savings and investments, and your progress so far towards achieving your retirement goals.

Our Recommendations and Advice is the longest section of the plan. It presents recommendations on every aspect of managing your finances for retirement, including restructuring your investment portfolio if required (with specific recommendations for low-cost personal pensions and ISAs). It also examines the likely outcome of following the recommendations, including both average and conservative projections. A sample page from this section of the plan is shown below.

Finally, the Appendices section includes a range of supplementary information, including more detail about the UK state pension, rules about annual pension allowances and taxation, your options for accessing your pension (drawdown, annuities, etc), and more.

AdviceBridge recommendations

It doesn’t end there, though. Once you have had a chance to read and digest your plan, you can arrange a call with a personal financial adviser from AdviceBridge to talk through the advice and recommendations and help you decide how to proceed. The advisers are not paid commission on product sales, so they are able to give unbiased advice about what investments may be best for you based on your specific circumstances.

So What Does It Cost?

For the basic AdviceBridge service as described above, there is a one-off fee of £300 with no recurring charges. This service will suit people who are happy to arrange their own investments based on the advice given and the telephone call with an adviser.

If you want AdviceBridge to set up the recommended investments for you – to implement your financial plan, in other words – they will do this as well for an inclusive fee of £500, again with no recurring charges.

Finally, if you opt for the Plan+Implementation service and want ongoing support and assistance too, including dynamic risk adjustment, an annual telephone review, ongoing telephone support, assistance putting your pension into drawdown, and the opportunity to monitor your portfolio online using a dedicated app, AdviceBridge offer all this for an additional £100 a year or £10 a month.

All of the above is summed up in the table below which I have copied from the AdviceBridge website.

AdviceBridge plans

My Thoughts

Overall, I have been very impressed by AdviceBridge, both in terms of what they are offering and the prompt and friendly support they provided while I was writing this article. Here are some of the main things I like about their service:

  • much lower fees than traditional financial advisers
  • all fees quoted include any taxes due – what you see is what you pay
  • range of options according to how much (or little) work you want to take on yourself
  • non-commission-based advisers, so unbiased advice on what investments will suit you best
  • advisers are free to recommend across the entire range of investment opportunities
  • all digital process – no need for personal visits or face-to-face meetings
  • fully FCA authorized company and advisers
  • advice is covered up to £85,000 under the Financial Services Compensation Scheme (FSCS)
  • all personal information is securely encrypted
  • in-depth written advice and recommendations on your retirement finances backed up by telephone support

Any negatives? Well, the only real one I could find is that various groups are currently excluded from the service, e.g. buy-to-let landlords and holders of ‘non-standard investments’. I guess the latter might include me, as I have a proportion of my portfolio in P2P lending and property crowdfunding.

I do of course appreciate that to keep their service so inexpensive AdviceBridge have to streamline their service, but it is a pity if this excludes a significant proportion of people who could benefit from it. I understand that this is something that AdviceBridge keep under review and in future they may remove some of these restrictions. In the mean time, if you aren’t sure whether you are eligible, it is well worth giving them a ring or contacting them via the website to ask (without obligation).

In my opinion, if your circumstances match their criteria, AdviceBridge are well worth checking out. I particularly like their £500 Plan+Implementation service, which covers not only researching and producing a retirement plan for you but implementing it as well. I would also seriously consider paying the extra £100 a year (or £10 a month) for the ongoing service. Obviously that brings the price up a bit further, but it is still far less than you would pay a traditional financial adviser for a similar service.

As always, if you have any comments or questions about this post, please do leave them below.

Disclaimer: This is a sponsored post for which I am receiving a fixed fee (but no commission). Please note also that I am not a professional financial adviser and nothing in this post should be construed as individual financial advice. Everyone should do their own ‘due diligence’ before investing and take professional advice as appropriate. All investment carries a risk of loss.

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My best investments of 2019

My Best Investments of 2019

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One question I get asked fairly frequently as a money blogger is what I think are the best current investment opportunities.

I have to be very careful when responding to this sort of question (and always tell people this). For one thing, I am not a qualified financial adviser, so it would be against the law for me to offer personalized investment advice. And even if I were, I still wouldn’t be allowed to give one-to-one advice without first doing an in-depth fact-find on the person in question.

Of course, this is exactly as it should be. For one thing, everyone’s circumstances are different, and what represents a good investment for me might not be the same for you. It depends on a wide range of factors, including your income and expenditure, your family responsibilities, how much you want to invest, the timescale (and purpose) you are investing for, your age and health, and so forth.

Another important consideration is your attitude to risk. Other things being equal, higher returns come with higher risks. If you’re comfortable with this and willing to accept it in exchange for the chance of better returns, that is of course your decision. On the other hand, if riskier investments would cause you sleepless nights, you are probably better off seeking a safer – if possibly less exciting – home for your money.

In addition, anything I say here is inevitably based on my own experience, and there is no guarantee yours will be the same as mine. I might, for example, have great success with one platform and suffer losses on another. But there is no way of knowing whether your experiences if you invest will be the same as mine. This applies especially if you have to choose specific investments on the platform (as with many P2P/property crowdfunding platforms) rather than putting your money into a pooled fund of some kind.

And, of course – as the financial services ads always say in the small print – past results are no guarantee of future performance…

I don’t want to come across as too negative. I am, after all, a money blogger and investor myself. So what I can – and will – do is talk about my own investing experiences and share information about what has worked well for me this year. It’s then up to you to decide if you want to investigate these opportunities any further. If so, you will need to do your own ‘due diligence’ before deciding how to proceed, perhaps taking professional advice from a qualified financial adviser as well (which I strongly recommend if you are new to investing or at all uncertain).

  • Although I count myself as a reasonably experienced investor, I do still have an independent financial adviser (Mike from Integrity Wealth Solutions). He oversees about half my investments, while the other half I look after myself. He also advises me on my financial situation more generally and answers any questions I can’t answer satisfactorily myself. i will talk more about this in another post. But I wanted to mention it here to show that I am not at all opposed to using a financial adviser and in general recommend it, particularly when starting out in investing.

My Best Investments of 2019

Below I have listed some of my investments that have performed best this year and/or caused me the least stress and hassle! I have included a few lines about each one, and links to any blog posts I have written about them for further info.

(1) Nutmeg

Nutmeg is a robo-advisory platform. I have used it for my Stocks and Shares ISA investments over the last three years. My investment pot has grown steadily, albeit with a few ups and downs, as is to be expected with equity-based investments. At the time of writing my Nutmeg pot has grown by about 40% since i started investing in April 2016, which is certainly a lot better than I could have achieved with a bank savings account. Of course, you shouldn’t normally invest in any equity-based product with anything less than a five-year timescale.

Nutmeg use exchange-traded funds (ETFs) as their investment vehicle. These are discussed in more detail in my in-depth Nutmeg review, which also includes details of what I invested with them and when. Note that my investment has grown by a further £1,100 since that article was published.

(2) Ratesetter

Ratesetter is a P2P lending platform. They don’t pay the highest rates, currently ranging from 3% for instant access to 4% for their Max account (where you pay a release fee of 90 days’ interest if you wish to withdraw). Though better than most bank savings accounts, those rates are clearly nothing spectacular.

One thing I particularly like about Ratesetter, though, is that they have a provision fund that effectively covers investors against defaults. That means you don’t have to worry about diversifying your investments across a range of loans, as is the case with some other P2P lending platforms. Of course, if the whole platform were to collapse the provision fund wouldn’t necessarily save you, but Ratesetter has been going for ten years now and appears professionally and competently run. It has delivered the promised returns to me with no stress or hassle, and I am happy to recommend it based on my experience.

In addition, if you check out my Ratesetter review you can discover how to get a free £20 bonus if you invest a mere £10 with them.

(3) Buy2Let Cars

I took a long time before deciding whether to invest with Buy2Let Cars, as it is quite an unusual investment. Basically what you are doing is putting up the money to buy a car for someone in a responsible job who can’t afford to buy one outright themselves. You then receive monthly repayments over a three-year period, and a final repayment of capital plus interest at the end of the loan. The minimum investment is £7,000, so this is obviously not going to work for everyone. Personally I bought one new car at a price of £14,000 in March 2018. Since then I have been receiving £250 per month in repayments, with a final payment of £8,429 due in month 37. That will give me a total net profit of £3,429 based on an annual interest rate of 10% (the rates on offer can vary but once you have signed an agreement the rate is fixed for the duration of the contract).

There are – of course – various safeguards and protections in place, fully discussed in my Buy2Let Cars review. Buy2Let Cars say that to date they have a 100% repayment record to investors, which appears to be confirmed by their Trust Pilot reviews. This investment has been working very well for me, with payments turning up in my bank account every month like clockwork. I am currently semi-retired, so it is providing a useful extra monthly income for me, with a large lump sum due in 2021, just a few months before I qualify for the state pension 🙂 If you think it might work for you, I recommend checking out my Buy2Let Cars review and speaking to my contact there, Brett Cheeseman, who helpfully answered all the questions I had at the time I invested.

(4) Kuflink

Kuflink offer the opportunity to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage.

Kuflink don’t pay the highest rates in this field – their loans are typically at an interest rate of around 7% – but in my view they offer a fair balance between risks and rewards. One thing I like about them is that interest is paid into your account monthly on all loans. I only have a relatively small amount invested, but so far everything has been going well with just the occasional short delay in repayment of capital.

Kuflink currently have a generous welcome offer, with cashback of up to £4,000 for new investors. Take a look at my Kuflink review for more information about this.

(5) Crowdlords

Crowdlords is a property crowdfunding platform. I have been investing with them almost since their launch and have made a good overall profit. Crowdlords pay competitive interest rates (over 20% in some cases) and offer a choice of equity and debt investments. Equity investments are higher risk than debt ones, but offer the potential for bigger returns if all goes well.

My only reservation about Crowdlords is that I currently have two overdue investments with them. In both cases, though, I have received full and reasonable explanations for the delays, and have been told that the money should be in my account within the next few months. Obviously, if that doesn’t happen, I will let Pounds and Sense readers know.

Crowdlords doesn’t have a welcome offer as such, but they do have a Refer a Friend scheme. If you sign up quoting my code, I will share the commission I receive 50:50 with you. Please see my Crowdlords review for more information about this.

So those are the investments that have given me the best returns and/or least stress during 2019. I do have others as well, including Primestox, ZOPA, Bricklane, The Lending Crowd, The House Crowd and Property Partner. Most of these have still made some money but none has really set the world alight.

Only Primestox actually lost me money. This is (or was) a premium food investment platform. They started promisingly and I made good returns on my early investments, but then they were hit by a series of delays and defaults. This happened with three projects I invested in. In the case of two I have received partial repayments with more promised, but in the third I have probably lost my £500. Primestox are no longer advertising investment opportunities, and I assume are re-evaluating their business model.

Property Partner is an interesting case. I have made modest returns on my portfolio this year, partly due to the fact that the property market in general has been in a slump. That said, there haven’t been any issues with delays or defaults, and dividends have been credited to my account every month as promised. It will be interesting to see what happens in 2020 as properties come up to their five-year anniversary and investors have the opportunity to exit at the current market price. As I noted in this recent blog post, this has the potential to create opportunities for both buyers and sellers.

I haven’t included certain other investments in this article. These include my Bestinvest SIPP, which is now in drawdown and holding up well in value. Neither have I included money invested via my financial adviser. This is mostly in funds from Prudential, which again are doing pretty well.

Lastly, I haven’t included the money I ‘invested’ in Football Index. My portfolio has more than doubled in value over 18 months, so in some ways it is my most successful investment of 2019! I am sure luck has played a significant part in this. Nonetheless, if you want to know more about Football Index – and read how you can get a risk-free £50 when signing up – you might like to check out this recent blog post.

I hope you have enjoyed reading this article, which has run on a bit longer than I expected. I hope also it may have given you a few ideas to investigate further if you are in the fortunate position of having money to invest.

As always, if you have any comments or questions about this article, please do post them below.

Disclaimer: As stated above, I am not a professional financial adviser, and nothing in this article should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investment carries a risk of loss.

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Elderly People and Scams Infographic

Elderly People and Scams (Infographic)

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Today I’m sharing another eye-opening infographic from my friends at the credit reference agency Equifax.

It’s an unfortunate fact that older people with vulnerabilities can be targeted by scammers. Older people often fear being mugged or burgled – but 90% of all crimes committed against the over 65s are actually fraud.

Scammers don’t always come across as aggressive or pushy – they can often appear very polite and friendly, which is how they win people over and gain their trust. They use several methods to commit identity theft and steal money, which include:

Age UK has reported that almost 5 million people over the age of 65 believe they have been targeted by scammers. People living on their own, or suffering with dementia, are especially vulnerable.

The same study revealed that 27% of single people were duped by a scam when they were targeted, compared with less than a tenth of people who lived with someone else.

The cost of fraud – in terms of money, time and individuals’ health – is massive.

  • In 2017, victims suffered an average loss of £29,000 due to investment fraud
  • On average, pension scam victims lose £91,000
  • It can take weeks to sort out the aftermath of a scam

The infographic below sets out some ways to help elderly people protect themselves against scammers – and warning signs that might suggest they’ve been targeted..

Thank you to Equifax for an eye-opening graphic. If you help look after an older person – whether it’s a friend or a family member – it’s important to keep an eye out for this and offer advice and support when appropriate. This applies especially if they live on their own.

The infographic includes some excellent advice on ways to reduce the likelihood of being scammed online. But, of course – as mentioned at the start of the article – scammers operate in other ways as well.

An increasingly popular method is scam phone calls, e.g. this one where the victim receives what appears to be a genuine phone call from HMRC telling them that they are being prosecuted for tax evasion. Of course it’s a lie, the purpose of which is to get the victim to make payments into the scammer’s bank account and/or hand over their bank details. If you know any older people who may be vulnerable to telephone scams, it’s important to warn them about this and tell them always to contact you for advice before they respond.

As always, if you have any comments or questions about this post (or the infographic), please do leave them below.

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Three Most Important Retirement Questions

Guest Post: The Three Most Important Retirement Questions

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Today I have a guest post for you from James Mackay, a certified financial planner and regular reader of Pounds and Sense 🙂

In his article below, James addresses an issue that will be real and pressing for many readers of this blog – how to prepare for retirement and enter it successfully.

Over to James then…

 

If you’re starting to think about your retirement, these are three important questions that you need to ask.

1. Have You Had Enough?

It’s Sunday evening and you’re winding down after a busy weekend with friends and family. As you sit back in your favourite chair and think about the week ahead, you can’t quite get comfortable.

The thought of going back to work on Monday morning makes you feel a bit uneasy. In fact, the thought of doing it for another 5–10 years makes you feel sick!

If you’ve ever experienced this, you might be approaching the point where you’ve had enough (that’s a technical term).

The question you need to ask yourself is whether the pain of going to work outweighs the benefit. If you find yourself in this situation; where you’re emotionally, physically and mentally drained and no longer excited to perform at the highest level, it’s time to do something about it.

Having had enough doesn’t mean that it’s necessarily time to retire. It simply means that you need to change the status quo.

Maybe you’ve had enough of your current role, but you’ve got more to give in another capacity. Your years of wisdom could be very valuable in a different guise. Perhaps you’ve had enough of having a boss and are ready to go it alone. With the years of experience, it’s no surprise that over 50s are the best entrepreneurs. Or maybe you’re happy to carry on but just want a little bit more flexibility around what you do and when you do it.

These are all useful options to explore, particularly if you haven’t got enough to hang your boots up yet. Sometimes, the benefit of working for “just one more year” can make a real difference to your financial situation.

2. Do You Have Enough?

If you’ve had enough, and are ready to move onto pastures new, the next question is do you have enough?

Whenever I ask this question, people start telling me how much they’ve got saved up. But they’ve got it all wrong. It’s like trying to build a house without the seeing the floor plans. You need to start with the end goal and work back from there.

Working out if you have enough requires knowing:

  • Your monthly number – this is how much a comfortable lifestyle is going to cost.
  • Your monthly income – this is how much income you’ll receive from the State Pension, final salary pensions, buy to let properties, etc.
  • The gap – this is the difference between the two, and where your savings come in. Broadly speaking, if you’ve got 20x the gap in savings, you should be fine. Any less and you might not be quite there yet.

But, there’s more to retirement planning than just simply figuring out your ‘number’. Finding your purpose in retirement sounds wishy-washy, but without a clear purpose you’re likely to be one of the 25% of retirees who return to work.

3. Will You Have Enough to Do?

You need to ask yourself what you are going to do when you wake up on that Monday morning, free from the ties of work, and how are you going to fill your time.

If for the last 40 years you’ve been busy being busy – chances are you’re going to get pretty bored sitting around the house for 40 hours a week. I’ve seen many successful individuals retire, only to get bored and return to work within five years. The newly-found free time that retirement provides can be overwhelming for some.

Retirement is about having enough money to sleep at night and enough purpose to get up in the morning. It’s not just about the numbers, it’s about how you’re going to spend your time. Purpose will drive you in retirement, money will fund you. Try not to get those two mixed up.

The bottom line is this… retirement is the biggest transition you’re ever going to make. It’s not the sort of thing you do regularly and not the sort of thing you want to get wrong. By asking yourself these three questions, you’ll improve your chances of achieving a successful retirement.

Byline: James Mackay is a Certified Financial Planner at Frazer James. He has helped hundreds of clients to achieve financial independence and retire with confidence, clarity and purpose.

James Mackay

 

Many thanks to James (pictured above) for a valuable and thought-provoking post. As a semi-retired 63-year-old myself, I can identify with all of the points he raises.

Actually I think there is a strong case for phasing your retirement if possible, maybe reducing the number of days per week you work initially and/or moving to a less pressured role. This can make retirement feel more like going on an interesting journey rather than driving over a cliff!

I also think there’s a good case for continuing to do some work you enjoy during the early years of retirement at least, to boost your income, provide social interaction, and keep your mental and physical faculties sharp. Of course, voluntary work can do this as well (apart from boosting your income, which may or may not matter to you).

If you have any comments or questions about this article – for me or for James – as always, do feel free to post them below.

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