Pensioners - Tax, Trusts and (some) Free Help!

There has been a noticeable increase in the number of pensioners re-organising their financial affairs in a more beneficial way since the Government announced the freezing of tax allowances for over-65s and over-75s.

Pensioners are not only worried about their own financial positions but they are anxious not to be a burden on their families. As we know, in the name of tax system simplification, from April 6 next year the Government is scrapping the age-related income tax personal allowance so those under 64 are no longer set for a boost at 65. Those 64, or 65-plus and currently getting extra tax-free income, will see their allowance frozen at 2012-13 levels. At the moment, pensioners aged over 65 can bank a larger income from state and personal pensions, employment - without paying any tax. Those between 65 and 74 can take home £9,940; those aged 75 can take £10,090.

The problem is pensioners will have planned their future finances with the age-related income tax personal allowances, now they have to think again.

There has also been a rise in the number of pensioner couples looking at trust funds to not only protect their own assets but those of their families as well as help in paying care home fees. Setting up trusts, although complicated, can make sure there is a steady income for the whole family but can also be a benefit in paying care home fees, a major drain on resources as we get older. 

I am part of the T.O.P. team in the UK, an independent free tax advice service for older people on low incomes who cannot afford to pay for professional advice. TaxHelp for Older People is a service originally provided by the Low Incomes Tax Reform Group but is now provided by Tax Volunteers, and through which pensioners with a household income less than £17,000 per year, qualify for free tax advice. I am finding that I am making an increasing number of home visits and attending more surgeries for those pensioners who meet the charity’s requirements as a result of these changes. There is no doubt that at whatever end of the economic spectrum the pensioners are, the Government’s move on tax allowances has caused a great deal of anxiety.

Pensioners are turning to professional advice and at HCB we can offer both legal and tax specialist help, avoiding the inconvenience of having to use two firms to get the service required.