How to Boost Retirement Income – Do You Know Your Benefits?

Every year, a staggering £5.5bn of benefits goes unclaimed by older people, according to Age UK1. This financial support could potentially add thousands to your annual income. Here’s how to make sure you, or a parent or grandparent, aren’t missing out.

There are three key benefits that go unclaimed – Pension Credit, Housing Benefit and Council Tax Reduction. Here’s how they work and the financial difference they could make to you.

Pension Credit

  • Around four million people are entitled to Pension Credit but a third of these aren’t claiming2, leaving around £2.8bn unclaimed each year1.
  • While the amount received depends on your income and retirement savings, Age UK calculates that if everyone claimed their entitlement, it could boost their annual income by an average of £1,7163.
  • Pension Credit is made up of two parts – the first is a guarantee credit, which tops up your weekly income to £148.35 for single people or £226.50 for couples.
  • The second part is a savings credit for people who have saved towards their retirement4. This savings element is worth up to £16.80 per week for single people or £20.70 for couples, but may not be available to people who reach State Pension age on or after 6 April 2016.

Housing Benefit

  • Just over £1bn worth of Housing Benefit goes unclaimed each year1, equivalent to an average of £2,444 a year for the pensioners who miss out.
  • Housing Benefit can help towards your rent, depending on your income and savings. Usually if you have more than £16,000 of savings you won’t qualify, unless you receive the guarantee part of Pension Credit5.

Council Tax Reduction

  • More than two million older people didn’t claim their entitlement – this is equivalent to an average of £728 a year for those who didn’t claim1.
  • If you’re on a low income, your council may be able to help you with your Council Tax bill through its Council Tax Reduction or Council Tax Support scheme. This could give you a reduction of up to 100% on your bill, depending on your individual circumstances6.
  • Although Council Tax Reduction was only introduced last year (replacing the Council Tax Benefit on 1 April 2013), an almighty £1.69bn worth of its predecessor, Council Tax Benefit, went unclaimed each year1.

Where to get help

It’s simple to find out whether you, or your parents or grandparents, are missing out.

  • Turn2us is a charity that helps people access benefits and grants. Its website includes a handy benefits calculator that assesses your financial situation and highlights your benefit entitlement.
  • You can also get help and advice on benefits from charities such as Citizens Advice and Age UK.
  • You can contact the government, or your council, directly for Council Tax Reduction.

Support from Foresters

Members of Foresters Friendly Society may also be able to access financial assistance via our range of discretionary grants that can help with the cost of optical and dental care or in times of hardship. Find out more about our Foresters Extras range of member benefits here.

Membership benefits are discretionary and are not regulated by the Financial Conduct Authority and the Prudential Regulation Authority and are regularly reviewed by us to ensure they are relevant to our members.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

Sources

  1. www.ageuk.org.uk/money-matters/claiming-benefits/unclaimed-benefits/
  2. www.ageuk.org.uk/money-matters/claiming-benefits/pension-credit/what-is-pension-credit/
  3. www.ageuk.org.uk/latest-news/1-in-pensioners-struggling-despite-unclaimed-benefits/
  4. www.gov.uk/pension-credit/overview
  5. www.gov.uk/housing-benefit/eligibility
  6. www.gov.uk/council-tax-reduction

Foresters remembers, and a legacy of World War 1

To mark Remembrance Day in this especially poignant anniversary, we recall our members who were affected by the First World War and the benevolent fund that was begun to help them.

World War 1 changed the world forever ­and, as in every community, many Foresters members lost their lives. Rolls of Honour for Foresters Branches throughout the UK record the names of those who were killed, and in many cases those who were wounded or who served, as well.

Remembrance Day is, rightly, about those who gave their lives, but the war’s aftermath was devastating for the families left behind too, with many struggling financially as well as emotionally after losing their main breadwinner.

We set up a Foresters’ War Memorial Benevolent Fund in 1918, to provide financial assistance to members and their families who had been severely affected by the losses of WW1. As George Heath, the Foresters’ President at the time, asked: “Could they imagine a better war memorial?”

The fund continues today in the form of the Foresters Child Support Fund, which can provide financial assistance for children who have lost a parent or are in otherwise difficult situations.

As we remember all those who have given their lives to keep the peace and freedom we enjoy in the UK, we hope they would approve of our own small memorial. It reminds us that benevolence is a fundamental principle of Foresters.

Find out more about the Foresters’ Child Support Fund and our other member benefits. The membership benefits we provide aren’t regulated by the Financial Conduct Authority and the Prudential Regulation Authority and are regularly reviewed by us to ensure they are relevant to our members.

For more about commemorative WW1 events, visit www.1914.org.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

Taking Stock – The Pros and Cons of Investing in Shares

Is it time to take stock?

The pros and cons of investing directly in shares – and why funds may provide a comfortable alternative

The Royal Mail flotation last year provided a wake-up call to the potential benefits of investing directly in shares, and some weighty companies have followed suit this year. Could this type of investment be for you? We have set out to help you decide (and offer an alternative for those worried about the risk of buying shares).

With the economy picking up again, more and more companies – including big names such as Saga, Poundland and TSB – have floated on the stock market this year. As many of these flotations are open to the public, it’s a good time to weigh up the pros and cons of becoming a direct shareholder – and we also look at funds, which offer a way to invest with less risk involved.

Pros of investing directly in shares

Over the long term, shares usually outperform money held in cash or fixed interest (Government gilts). Research by Barclays found that if you invested for 10 years, in 90% of the 10-year time periods since 1899 you would have been better off in shares than in cash, and for 79% of the 10-year time frames you would have been better off in shares than in fixed interest. If the time period was 18 years, you would have had a 99% chance of outperforming cash and an 88% chance of outperforming fixed interest if you had invested in shares.

There are also plenty of examples of a jump in returns from flotations as demand pushes up the price. For example, when Royal Mail issued shares last year, investors saw the price increase by almost 40% on the first day of trading.

Please note: Past performance is not a guide to future performance.

Cons of investing directly in shares

But not all flotations result in a huge return overnight. Facebook shares were launched at US$38 in 2012, only for investors to lose almost US$10 a share two weeks later when they started trading.

Even when you get past the initial phase it can still be a rocky ride. For example, shares in supermarket giant Tesco fell by 16% on 12 January 2012 when it issued a profit warning after disappointing Christmas sales.

More drastically, holiday firm Thomas Cook saw its share price fall by nearly 70% in November 2011 after a string of setbacks including the cancellation of holidays to Egypt and Tunisia due to political unrest in the region.

As with much else in life, if you’re prepared to take a risk and it pays off, you will reap the rewards – but there are no guarantees.

Why funds may be a comfortable alternative

Investing in a fund gives you the potential benefit of good performance with less exposure to the risks associated with investing directly in the shares of a handful of companies.

Funds pool investors’ money and can use it to buy a broad spread of assets including shares, bonds, gilts and property, so they could include a large number of different investments.

Taking this collective approach offers several benefits over investing directly in a small number of shares:

1. Diversification

Although the value of your investment can still fall, having a broad range of investments within a fund means you’re not tied to the fortunes of one or two companies. This means that if one performs badly, it will have a smaller impact on your return. You may also find that whatever causes one company’s share price to slide could be the very same thing that causes another company in your fund to perform well. Similarly if one asset class is not performing well, another may compensate for this poor performance.

2. Expertise

Investing in a fund also gives you access to a professional investment manager. As well as benefiting from their experience and expertise, fund managers often have access to information and research about companies that isn’t readily available to the public. This can give them an invaluable insight into how to invest your money.

3. Cost

It can also be more cost-effective to invest in the stock market through a fund. Invest directly in shares yourself and you’ll pay dealing charges of around £10 every time you buy or sell. In a fund, these charges and the costs for professionally managing the fund are spread across all of the fund’s investors.

One type of fund which may be worth considering is the Foresters Friendly Society Order Insurance With Profits fund. If you’re interested in finding out more about this type of investment, why not take a look at our simple guide to With Profits savings.

Please note that, dependent on the investment conditions when you withdraw your money, you may get back less than you paid in.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser if you want financial advice. You may have to pay a fee for this advice.