This content originally appeared in the MSE weekly email on 22 April 2015.
Like Kylie or Clooney, some things just get better with age. Sadly, your finances aren't always one of them.
So to help, our 50 Over-50s Tips helps you make the most of your cash. Here are some new, big and easy ones to get you started...
1. New. Beware SunLife's over-50s plan. It may pay out LESS than you put in (Parky, stick with chat shows).
He's a lovely fella, but Michael Parkinson's caring voiceover makes Axa SunLife's over-50s plan seem simple, yet for many it's a seriously bad bet, locking you in with payments until you die, and oft paying out less than you put in.
For when it's good (some being clever make £10,000s), when bad and the best buys, see my new Over-50s Plans – Winners & Losers guide.
2. Fight hideous travel insurance costs – a YEAR's cover from £15.
Older travellers get milked by insurers. Yet scour hard (we've done it for you) and there are still decent rates. Here are the cheapest annual policies (cover a year's trips) for individuals that meet our min cover levels.
For full info, incl couples' policies and more, see our new Over-65s Travel Insurance guide.
- 50+: Holidaysafe Lite* £15 Europe; £25 world
- 66+: Holidaysafe Lite* £39 Europe, Leisure Guard* £64 world
- 70+: Holidaysafe* £39 Europe, Leisure Guard* £65 world
- 80-85: via Castle Cover* £325 Europe, £512 world
- Over 85: For cheapest single-trip deals use the MoneySup* comparison.
Alternatively, the fee-free Nationwide FlexAccount* bank account includes annual European travel insurance up to age 75 (needs £750/mth income to qualify), and if older you can often pay £50 to get it.
In Europe, ensure you've an in-date free EHIC card to get treatment in an EU state hospital at the same cost as a local. Some may find the EHIC+* insurance policy (not a Government policy) which covers the costs of treatment on EHIC cards, plus usual baggage delays etc a winner.
If you've had medical probs, always declare them. See Pre-Existing Conditions.
3. Warning: Pensioner Bonds close in 3 weeks – get 4% ASAP.
Pensioner Bonds, or officially "65+ guaranteed growth bonds", have brought a little cheer for over-65s' savings. Yet the deadline to apply is 15 May, and while it's been extended before, as it's just after the general election, that's unlikely this time.
You can put up to £10k in both a 1yr bond at 2.8%and the 3yr bond at 4%. If only doing one, the 3yr wins as even if you withdraw after a year its rate is roughly the same as the 1yr. For why and full help see Pensioner Bonds.
4. Over-50s discounts, freebies & entitlements.
Age has its privileges. Many older people are eligible for exclusive discounts, passes and freebies. Even if not, if you're a pensioner and you see "student discount", try asking for a pensioner discount. It often works.
- Over-50s discounts and deals: From a free over-50s' dining card to over-60s 25% off at Specsavers, 10% at B&Q and more, see Over-50s' Discounts.
- Over-60s: 1/3 off train tickets with a Senior Railcard, free prescriptions (in Eng - free elsewhere) and are you entitled to free bus & tube travel?
- Anyone in your home born pre-5 Jul 1952? You're due up to £300 in tax-free winter fuel payments. See Winter Fuel & Cold Weather.
- Lower-income pensioners: Free Insulation & Boilers, worth £1,000s.
- Over-75s: Bag a free £145.50 TV licence covering the whole household.
5. Cheap car insurance – can you get it for 96p/yr?
While older drivers can find it tough to access cheap cover, our all time record cheapest was 96p/yr (after cashback) from gran Barbara Wakerell. For full step-by-step info on how this happened see our Cheap Car Insurance system.
6. Have the 'unpleasant issues' chat.
Hopefully you'll live healthily and happily until you're 190. But in case problems arise, it's best to deal and communicate sooner and openly with your family – they're the ones who'll be impacted most, but may be too scared to broach it with you.
- a) One in three over-65s have dementia when they die. Unless you've a Power of Attorney which allows loved ones to take over your affairs, they need go through the usually hard, horrid & costly attempt to apply in court. Far better is to sort it in advance, (I have one at 42), to kick into effect only if and when you lose your faculties. See Power of Attorney for help.
- b) Death happens. These are issues for us all to consider, but of course the older you are the higher the chance it'll be sooner. Go through our Death Happens Checklist, including arranging who'd look after any dependants, planning your funeral and how you'd like to be cared for if needed.
- c) Don't die will-less. If you've assets, ensure you're choosing what happens to them. See Free and Cheap Wills (includes what happens if you don't). Plus do an Inheritance Tax Plan to make use of allowed exemptions.
- d) Are you hurting your spouse by looking after the finances? More than 60% of couples say one person deals with all the home's money issues. If you're reading this, my guess is that's you. Yet if you were hit by one of the three Ds - death, divorce or dementia - it could heap financial misery on the grief. That's because often the other partner is in the dark.
Too often people have asked me: "My partner just died, I'm in dire straits, I simply don't know where to start with the finances, what do I do?" One even struggled to access her husband's money to pay the mortgage.
So why not create a financial fact sheet naming all product providers – from roadside recovery to investments, boiler cover to bank accounts. Keep it somewhere safe, but don't put too many security details in, just in case. Then have a kitchen table briefing every few months to update and discuss.
7. Are you missing out on pension credit worth up to £35/week?
Up to 1.5m eligible pensioners miss out on pension credit - those with total income under £151/wk, or above that if you've small savings. Do check. For help, see our Pension Credit guide, and the Benefits Check-Up tool.
8. Warning. Equity release is NOT a no-brainer.
Equity release loans are sold as a way to spend the value of your home while you're still living there.Yet rates, at 5%-7%, are far higher than mortgages, and more importantly, as you usually don't make repayments, interest compounds at rocket speed. Taking £20k aged 65 can take c.£90k from your home's value 25 years later.
If you can, the best way to get cash from your home is to downsize and do it early. Many wait, and when the time comes decide they're too old to move and constantly regret it. See Equity Release Need-To-Knows.
9. Don't be loyal to gas & elec firms - it costs you.
It's a national disgrace that I pay far less to boil a kettle than a 90-year-old on a state pension struggling to understand the system. That's why switching to a cheap tariff that could save £250/year to break the energy loyalty habit is vital.
Switching isn't a big faff. It's the same elec, same gas, same safety. Only service, billing & price changes. Sometimes YOUR OWN ENERGY FIRM offers a cheaper deal, but you need to ask to move to it.
To make it easier, use the MSE Cheap Energy Club which compares for you, shows you top long-term cheap picks and alerts you when to switch again.
10. Pension Freedom - what does it actually mean?
Two weeks ago, sweeping changes mean that anyone aged 55 or over can withdraw cash from their pension whenever they wish – and spend it.
Yet for most that's a bad move. Even if you want the cash, there may be ways to withdraw it more tax efficiently. My Pension Freedom - everything you need to know in 5mins guide will give you a quick briefing and we're working on a full 40-page booklet (I'll tell you about it here when done).
Lots more info in 50 tips for over-50s and if you want more from your bank account.