The cost of living crisis is eating away at all of our income but is having a particular impact on pensioners and this will get worse as the weather gets colder.
Pensioners are harder hit as most are on fixed incomes and are spending a greater proportion on life’s essentials, such as energy, the price of which has risen significantly over the past 18 months.
That’s the bigger picture behind the government’s decision to give all pensioner households an extra £300 payment to help them get through the winter.
It is £300 per household and not per person, announced in Jeremy’s Hunt’s autumn statement, will not be means tested and all pensioner households will get it in addition to their fuel payment of winter.
Cost-of-living payments come in as many retirees will struggle to pay their energy bills this winter, but should those who don’t need the money give it away?
The extra money will provide real help to those struggling with their heating bills. However, there are also plenty of retirement households that don’t really need it.
Is it fair to give them an extra £300 tax free when people of working age struggling with bills get no similar extra help?
It’s a tricky question and debating the good or bad of payouts is not the purpose of this column, so I’ll let you decide.
But certainly among UK pensioner households there are some who have a comfortable final salary or other retirement income, with plenty of accumulated savings and investments, who are in a much better financial position than most.
I know many of them are This is Money readers and may be reading this column.
So here’s my suggestion: if you know that extra £300 payment for living costs isn’t something you need, why not consider giving it to someone else for whom it would make a real difference?
Our wealthiest retired readers have worked hard, paid their taxes, lived frugally, borrowed prudently, and accumulated their wealth diligently over the years, so it’s only fitting that they feel they should get something back.
However, for some, the extra £300 payment will end up increasing their savings or being spent on non-essentials.
If this applies to you, maybe donate your £300 to someone who needs it more.
You may know someone who this could help – and while they may be reluctant to accept your charity, you can explain to them that as this is extra money from the government you are happy to give it to him.
Alternatively, local charities and community organizations can help you use the payment directly by donating it to someone in need.
If you want to donate money, this type of direct donation seems like a better method than giving it to a big charity, which I know some do with their winter fuel payments.
There’s nothing wrong with that – and the money will go to help a good cause – but getting those payments to someone who can use it directly via the shortest path possible is one way to make a difference. quick difference.
Pension credits – another way to help someone
The weather has turned colder and that, combined with shorter and darker days, means the situation for struggling pensioners is likely to get worse as heating and electricity bills rise.
On a daily basis, I hear conversations between people of working age who worry about turning on the heating – so I can only imagine how badly things are going for the poorest pensioners who spend much of their day at home.
It is therefore essential that low-income pensioners claim all the support to which they are entitled – and the pension credit is essential in this respect.
The Pension Credit is designed to help those retiring on low incomes, but around 850,000 of those who qualify for it are not claiming something that could be worth an average of £3,000 a year to them.
The government lobbied earlier this year to get people to claim a pension credit and Steve Webb, our pensions columnist, tells me it seems to have worked, as the system has been somewhat overwhelmed.
But if you’re entitled to it and haven’t claimed it, or know a friend or relative in that position, don’t be put off by reports of administrative errors, file the claim.
It’s also vital for getting other help. Pensioners are urged to act now because it means they can get the next £324 low-income cost of living payment. Age UK says people must apply by December 18, read our guide on what to do to apply for pension credit and extra winter support.
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