Yes, you read it here first (see "BUDGET 2010: ARE WE BETTER OFF?"). If your a man aged 60 or less, you won't be getting your pension until you're 66 and I have no doubt that it will continue to increase over time until future generations will be working until they're 70.
Watch out now for your bus pass, the winter fuel allowance and the TV licence. These subsidies to pensioners cost the Government about £4bn and they will be on the target list for further cuts in welfare benefits that are due this autumn.
The problem with 'across the board' benefits like this is that they don't differentiate between those that really need them from those that don't. And when they cut these benefits, they hurt those needy people and the rest simply shrug and pour another glass of wine. It can't be beyond the wit of some economist to come up with a simple formula that's easily applied so that the poorer pensioners in society are protected from the whim of a Chancellor. How about, if you're of pensionable age and you pay income tax you don't get the benefit, or if your income's above £20,000 (to take a number) you don't get a bus pass, or whatever. Like the man said - it's not rocket science.
There's a big black hole in the economy that has to be filled and a lot of what Mr Osborne has done makes sense, but let's not fill the hole with the supporting framework of the poorer pensioners.
On the positive side, businesses will not be able to force you to retire at 65 if you don't want to. Some far-sighted companies have already adopted this policy. B&Q for example abolished their retirement age more than 15 years ago.
Perhaps the best way to supplement your retirement income is to look after yourself and run a small part-time business from home. Retirement Revenue have got some good ideas on that subject.
Be well.
Thursday, June 24, 2010
Tuesday, June 22, 2010
BUDGET 2010: ARE WE BETTER OFF?
Well, there you have it, George Osbourne's first budget. This was the 'Emergency' Budget to resolve the rotten mess that the country's finances are in. So how will it affect the country's pensioners and are we better off or not?
On the face of it you'd think that we'd probably done quite well, but let's just think about it for a moment. On the plus side, the Government has restored the link between pensions and earnings. To be precise, pensions will keep pace with earnings, the Consumer Price Index or 2.5%, whichever is greater, with effect from April next year. As Mr Osbourne said: "There will be no more 75p increases to the State Pension." That's great, but it is no more than all the parties had said before the election, so it's not exactly news, welcome though it is.
Unfortunately, the increase in VAT to 20% is likely to wipe out any benefit. Neither will the VAT increase be offset by the reported £1,000 increase in the personal tax allowance to £7,475. That's because we already benefit from a personal tax allowance of £9,490.
Inflation is likely to rise and there is no sign of any increase in interest rates and this is bad news for those on fixed incomes, like us for example.
There were some other 'teasers' that were a bit light on detail, but which indicated the way the Government is thinking. It will no longer be compulsory to buy an annuity before the age of 75 and this will be broadly welcomed, but we don't have the detail yet.
Anyone under 60 might be a bit concerned about the news that the Government will be 'accelerating' the advance in the retirement age to 66. It was previously understood that this would not happen until most of us were passed caring, but it sounds as though this might come in much more quickly; like in 2016 for men and 2020 for women. There is going to be a comprehensive review of the retirement age and we're unlikely to know any more until the review is completed, but you can bet your pension that the increased retirement age will be effective in 2016 for men and 2020 for women. That means that millions of people under 60 are not going to get a pension until they're 66.
This Budget seems to be a bit of a Curate's egg for us pensioners - good in parts, but you could argue it both ways. According to Emma Simon in the Telegraph: "Pensioners are the biggest losers".
Looks like we might need Retirement Revenue after all.
Be well.
On the face of it you'd think that we'd probably done quite well, but let's just think about it for a moment. On the plus side, the Government has restored the link between pensions and earnings. To be precise, pensions will keep pace with earnings, the Consumer Price Index or 2.5%, whichever is greater, with effect from April next year. As Mr Osbourne said: "There will be no more 75p increases to the State Pension." That's great, but it is no more than all the parties had said before the election, so it's not exactly news, welcome though it is.
Unfortunately, the increase in VAT to 20% is likely to wipe out any benefit. Neither will the VAT increase be offset by the reported £1,000 increase in the personal tax allowance to £7,475. That's because we already benefit from a personal tax allowance of £9,490.
Inflation is likely to rise and there is no sign of any increase in interest rates and this is bad news for those on fixed incomes, like us for example.
There were some other 'teasers' that were a bit light on detail, but which indicated the way the Government is thinking. It will no longer be compulsory to buy an annuity before the age of 75 and this will be broadly welcomed, but we don't have the detail yet.
Anyone under 60 might be a bit concerned about the news that the Government will be 'accelerating' the advance in the retirement age to 66. It was previously understood that this would not happen until most of us were passed caring, but it sounds as though this might come in much more quickly; like in 2016 for men and 2020 for women. There is going to be a comprehensive review of the retirement age and we're unlikely to know any more until the review is completed, but you can bet your pension that the increased retirement age will be effective in 2016 for men and 2020 for women. That means that millions of people under 60 are not going to get a pension until they're 66.
This Budget seems to be a bit of a Curate's egg for us pensioners - good in parts, but you could argue it both ways. According to Emma Simon in the Telegraph: "Pensioners are the biggest losers".
Looks like we might need Retirement Revenue after all.
Be well.
Monday, June 21, 2010
HINDSIGHT'S A WONDERFUL THING
Back at the end of March I considered investing in gold, but said to myself (and anyone else who read the blog) that I had probably missed the boat. You can still see the original item - published on 26th March and called "How Can I Get More Interest?"
At the time, gold was trading at $1,104.30. Right now it's about $1,231.79, down from a high above $1,248. If I sold now (and to be honest if I had invested in gold I would now be selling) I would have made something over a 10% return in less than 3 months. That's not too sniffy is it? But then you see, hindsight is a wonderfull thing, and I wish I had a pound for every trader who said: "If only.......".
The Retirement Revenue website has just published an article about Setting Investment Objectives, you can get to it from here, and it makes sensible reading. It might be fun for us retired folk to take a bit of a punt every now and then, but in my case I see it as just that, a bit of a punt. It's a gamble at the end of the day and I don't have enough in my pension pot to risk it on gambling. I don't want to look back with the benefit of hindsight and think: "If only.....".
Be well.
At the time, gold was trading at $1,104.30. Right now it's about $1,231.79, down from a high above $1,248. If I sold now (and to be honest if I had invested in gold I would now be selling) I would have made something over a 10% return in less than 3 months. That's not too sniffy is it? But then you see, hindsight is a wonderfull thing, and I wish I had a pound for every trader who said: "If only.......".
The Retirement Revenue website has just published an article about Setting Investment Objectives, you can get to it from here, and it makes sensible reading. It might be fun for us retired folk to take a bit of a punt every now and then, but in my case I see it as just that, a bit of a punt. It's a gamble at the end of the day and I don't have enough in my pension pot to risk it on gambling. I don't want to look back with the benefit of hindsight and think: "If only.....".
Be well.
Sunday, June 20, 2010
5 TIPS FOR ENTREPRENEURS
I have no connection with it, but I find "The Week" to be an excellent magazine that provides a precis of the best of British and foreign media.
There's a piece in the City section by enterprise expert Rachel Bridge offering her tips about how to get the maximum return from a business start-up. I think they're worthy of greater consideration so, to get you thinking, I've repeated the headlines here:
1. Make your start-up easy to sell.
2. Don't borrow if you can avoid it.
3. Do something you understand.
4. Outsourcing is your friend.
5. Set tangible goals.
All good advice for the budding entrepreneur and you don't need to be a 30-something 'whizz-kid' to create a new business. Many people in their 50's and 60's have started very successful enterprises. Tip number 5 above is particularly relevant to the older generation considering a small business to supplement their pensions.
The goals you set have to be tangible, but they also have to be achievable and fit within your time frame. No point is setting unrealistic goals about building a significant enterprise if you only want to work three days a week for the next five years.
If you're thinking about starting a small business to pay for a few of life's little luxuries, you could do far worse than join the members of the Retirement Revenue community. You can see their website here.
There's a piece in the City section by enterprise expert Rachel Bridge offering her tips about how to get the maximum return from a business start-up. I think they're worthy of greater consideration so, to get you thinking, I've repeated the headlines here:
1. Make your start-up easy to sell.
2. Don't borrow if you can avoid it.
3. Do something you understand.
4. Outsourcing is your friend.
5. Set tangible goals.
All good advice for the budding entrepreneur and you don't need to be a 30-something 'whizz-kid' to create a new business. Many people in their 50's and 60's have started very successful enterprises. Tip number 5 above is particularly relevant to the older generation considering a small business to supplement their pensions.
The goals you set have to be tangible, but they also have to be achievable and fit within your time frame. No point is setting unrealistic goals about building a significant enterprise if you only want to work three days a week for the next five years.
If you're thinking about starting a small business to pay for a few of life's little luxuries, you could do far worse than join the members of the Retirement Revenue community. You can see their website here.
Thursday, June 17, 2010
MILLIONS HEADING FOR IMPOVERISHED RETIREMENT
There’s been some pretty scary news from an outfit called Partnership. According to them (they specialise in annuities and long-term care), millions of UK workers are heading for an impoverished retirement. Partnership have revealed the extent of a savings black hole that will leave millions of pensioners trying to survive on less than £10,000 a year.
It’s pretty obvious that people are not saving anywhere near enough for their retirement years.
Apparently, almost 90% of all pension pots are less than £50,000 and over the six years to 2009, 77% of all annuity transactions have been for less than £30,000.
Philip Brown, Partnership’s Head of Retirement Products, said: “Put simply, our figures show that most average men and women retiring in the UK today can look forward to a State pension of under £6,000 per year, plus a private pension of around £2,000 a year.
He went on to warn that “Today’s average wage for men and women is hovering around £26,000, so in other words they will be obliged to live on a reduction in income of up to 70% when they stop work”.
Either we’re going to have to work far longer than we expected or we are going to have to come up with some other way of supplementing our retirement income.
The Retirement Revenue website offers a range of ideas for earning money in retirement and it’s well worth a look. You can get there from here.
Be well.
It’s pretty obvious that people are not saving anywhere near enough for their retirement years.
Apparently, almost 90% of all pension pots are less than £50,000 and over the six years to 2009, 77% of all annuity transactions have been for less than £30,000.
Philip Brown, Partnership’s Head of Retirement Products, said: “Put simply, our figures show that most average men and women retiring in the UK today can look forward to a State pension of under £6,000 per year, plus a private pension of around £2,000 a year.
He went on to warn that “Today’s average wage for men and women is hovering around £26,000, so in other words they will be obliged to live on a reduction in income of up to 70% when they stop work”.
Either we’re going to have to work far longer than we expected or we are going to have to come up with some other way of supplementing our retirement income.
The Retirement Revenue website offers a range of ideas for earning money in retirement and it’s well worth a look. You can get there from here.
Be well.
Monday, June 14, 2010
Back from the wine
I'm back home now after a little sojourn to St Emilion in the Bordeaux region of France. A very pleasant few days enjoying the weather, the town and the wine. If you've never been to St Emilion you should put it on your list of places to see. It dates back to the 8th century and contains a massive underground church dug out of the rock by Benedictine monks. Fascinating.
The wine, of course, is famous throughout the world and 2009 was an exceptional year for the region. Prices are almost certain to increase over time, so it might be worth buying some if you have a long-ish term view of investments. You'll probable need to hold it for five years or so to get the best return. Of course, you'll also have to store it or arrange for it to be stored by your wine merchant. Berry Brothers and Rudd in London are very good.
I did a short article about investing in wine a while back and you can still see a copy on this link: http://bit.ly/9niaN9
The great thing about investing in wine is that if it doesn't make you a handsome profit, you can always drink it. Gives a whole new meaning to liquid assets doesn't it!
Cheers.
The wine, of course, is famous throughout the world and 2009 was an exceptional year for the region. Prices are almost certain to increase over time, so it might be worth buying some if you have a long-ish term view of investments. You'll probable need to hold it for five years or so to get the best return. Of course, you'll also have to store it or arrange for it to be stored by your wine merchant. Berry Brothers and Rudd in London are very good.
I did a short article about investing in wine a while back and you can still see a copy on this link: http://bit.ly/9niaN9
The great thing about investing in wine is that if it doesn't make you a handsome profit, you can always drink it. Gives a whole new meaning to liquid assets doesn't it!
Cheers.
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