Cutbacks in the recession

A recent article in the Telegraph suggested that despite the recession, people are more likely to cut back on their pension savings rather than curb their spending on clothes or eating out - you will find the link to article and the organisation that produced the survey below

http://www.telegraph.co.uk/finance/personalfinance/pensions/6416142/New-clothes-more-important-than-pensions.html


I wonder whether this is an example of people adopting a 'devil may care' attitude as suggested in the article or, is it more likely that people are more wary of investing in financial products at the moment - especially in view of the very low interest rates and recent instability in financial markets?

What do you think?
Lynne

Age limits and disability benefits

I am a new member of the research team and I am looking at social policy around money and savings.

One of my longstanding research interests is social care and how it should be funded in future. It is a 'hot topic' at the moment and is likely to be a high profile issue in the run up to the 2010 election. You may have seen the news debates about the future funding arrangements for long term care. One of the issues that is being discussed is whether disability benefits that are currently available without a means test, should be added to the general social care funding pot. In the recent Government consultation paper, two main benefits were included (1) Disability Living Allowance for those aged under 65 years and (2) Attendance Allowance for the over 65's. The Government has just announced that it will not include Disability Living Allowance for people under 65 in these proposals but Attendance Allowance is still 'up for grabs' (see the link below). I would be very interested to hear from anyone who receives Attendance Allowance or who has a relative who does, to find out what you think about these proposals?

As the Government increasingly wants people to work longer (e.g. past 65 years) it is going to become harder to justify age differences in benefit entitlements. The age at which people are deemed to be 'working age adults' and 'people who are retired' will become much less clear cut in future. On the one hand, we have anti-age discrimination legislation that seeks to challenge artificial age limits in some areas of policy and others where a distinction is being made on the basis of age (typically 65). Do you think this is fair ?

http://careandsupport.direct.gov.uk/news/2009/10/health-secretary-clarifies-government-position-on-disability-benefits/

Lynne

Older people paying too much tax?

A report by the National Audit Office has just been published which says that a lot of older people pay too much tax. This happens often because older people may have several different sources of income, rather than one simple salary. For example, tax may be deducted at source from interest-bearing accounts and many people are unsure how to claim it back. They have estimated that 1.5 million older people have overpaid tax by an average of £171, although some older people may have underpaid tax. Completing a tax return is complicated enough no matter what age you are, and however simple your income. It is worth finding out if you might be overpaying tax. I have always found the tax people to be very helpful if you phone them. Alternatively there are some sources of tax advice for older people - we are trying to find out which might be genuinely useful.

The NAO report may be found at http://www.nao.org.uk/publications/0809/dealing_with_the_tax_obligatio.aspx

Dinah 23.10.09

Is 'Financial Capability' the solution?

I have attended two conferences this week where the focus was on building 'financial capability' in individuals by education and the provision of information as the solution to the increasing complexity of managing household finances.  The conferences were very different but many of the messages were similar.  The first was on financial exclusion from the mainstream and was run by the Runnymede Trust, and the second on pensions and pension reform, run by the Pensions Policy Institute.  At both, many of the speakers commented on how in today's world it is becoming more and more difficult for people with low or middle incomes to know what to do for the best with their money.  One of (or possibly the only) solution that many saw was to give more and more information to individuals.  While accurate and easy to access information is important, I struggle to see how this will help in many cases or with some fundamental problems.  It will only serve to highlight more risks, uncertainties and insecurities, and won't magic spare money for people on low incomes or whose savings are now giving no interest, or who have put their money into pensions and have now lost large chunks of their life savings because of the problems in capital markets and equities around the world.

“Money : No need to Quarrel Anymore”

When couples first marry there are many excitements but also many adjustments to make.

One of the main adjustments is the arrival of children but also the pressure that it puts on the money available and who should be free to spend it. Some couples create ‘housekeeping’ but even then one spouse may feel free to spend money more readily than the other.

We asked older couples whether they were each free to spend as they wished. Older couples generally said ‘yes’ but there seemed to be limits. This was summed up by one woman who said “We know what we can’t do’.

This seems to reflect several older couples attitude and we wondered whether this is general. Do people in long relationships limit how they spend because they know anything else will lead to a painful quarrel?