Benefits for pensioners: 10 reasons it's good to be retired
It's safe to say it isn't a golden age for pensioners. Falling stockmarkets, pathetic annuity rates, miserly returns on savings and a Chancellor of the Exchequer who appears to be out to get you can make you wonder why you put in all those years of hard work.
But it's not all bad news. There are plenty of pensioner benefits, here's our guide to the top 10.
1. FREE BUS PASS
If you are old enough to claim your state pension and live in England you are also able to claim an older person's bus pass. This entitles you to free bus travel at off-peak times - that's between 9:30am and 11pm Monday to Friday and all day at weekends and on public holidays.
Free bus passes are also available in Wales, Scotland and Northern Ireland, but unfortunately you can't use passes to travel between the nations.
Still, given the soaring price of petrol, free bus travel isn't to be sniffed at. Contact your local council to find out how to apply for one.
2. DISCOUNTED RAIL FARES
Once you turn 60 you are eligible for a Senior Railcard. It will cost you £28 a year but given that the card gives you a third off all UK rail tickets you'll quickly make your money back. You can apply at railcard.co.uk or at your local train station.
3. WINTER FUEL PAYMENT
If you were born before 5 July 1951 you are entitled to a tax-free lump sum to help you with your fuel bills during winter. How much you'll get depends on your living arrangements.
Generally, if you are the only person in your household who qualifies but are under 80 you'll get £200 (£300 if you're over 80); if you live with someone else who qualifies you'll get £100 (£200 if you're over 80 or £150 if the other person is over 80 too). You don't need to act, the money will be automatically paid to you.
4. COLD WEATHER PAYMENT
On top of the winter fuel payment, pensioners who get Pension Credit usually qualify for a Cold Weather Payment if the temperature drops particularly low during the winter.
A network of weather stations monitor local temperatures between 1 November and 31 March every year. If there is a seven-day period where either the average temperature drops below 0ºC for seven days or more, or it is forecast to be on average 0ºC or lower in your postcode you will automatically be credited with £25 per week.
5. FREE TV LICENCE
If you are 75 or over then you're entitled to a free TV licence, saving you £145.50 a year. So you can watch all the telly you want safe in the knowledge you're not paying Jeremy Clarkson's wages anymore.
If you have a TV licence you will automatically receive a refund for any payments made after your 75th birthday and yours will be converted into an Over 75 Licence.
6. CHRISTMAS BONUS
In 1972, then prime minister Ted Heath introduced a £10 Christmas bonus for pensioners. It was worth £98 in today's money and was considerably more than the £6.75 a week basic state pension that pensioners of the time received.
Bizarrely, given the government's austerity drive this bonus still exists, and there are no plans to get rid of this Christmas present from the Treasury. But the money is still just £10, so it's nowhere near as generous as it was in Heath's day.
You don't need to do anything to claim this benefit; it should be paid to you automatically in the same way as you receive your winter fuel payment. If you think you're entitled to the money and haven't received it you should speak to The Pension Service on 0800 731 7898.
7. HOUSING HELP
If you are on a low income and claiming Pension Credit you are also entitled to help with your housing costs.
If you rent your home you can claim housing benefit to help with your payments. And homeowners can claim Support for Mortgage Interest. The amount paid is a standard rate of interest (so it might not match the rate of interest you pay on your mortgage) and it is paid directly to the lender.
"The rules about how much help you can get are complicated," says Paul Crayston, spokesperson for the Money Advice Trust. But there is help out there, so speak to your local Citizens Advice Bureau or call the National Debtline on 0808 808 4000.
8. REWARDS FOR BEING A SILVER HELLRAISER
Once you've retired it's time to start playing up every bad habit you have. This is because when you retire you convert your pension savings into an annuity that pays you an income for life.
Obviously, the annuity company doesn't want to pay you more in income than you give it in pension savings, so the longer it thinks you'll live the less income you will receive. So what you have to do is try to get an enhanced annuity.
These annuities pay out a higher level of income as they are intended for people with health problems that mean they may not live as long as a strapping, healthy 65-year-old.
"Even people who consider themselves to be healthy may be eligible for an enhanced annuity if they are a smoker or drink significant amounts of alcohol," says Jim Boyd, spokesperson for annuity specialists Partnership.
"People who are eligible for an enhancement can receive extra income in retirement of up to 40% or more." So for once in your life it can pay to admit to that extra glass of wine or crafty cigarette.
9. FREE PRESCRIPTIONS
While the rest of us grumble about paying £7.30 for prescriptions, those of you who are over 60 (or living in Wales, Scotland or Northern Ireland) can waltz in and out of the pharmacy as often as you like for free prescriptions. That's going to add up to some pretty big savings as the years go by.
If you embrace your age and shout about it when you enter a museum, art gallery or theme park, you'll probably find yourself in line for a discount on the admission price. For example, annual membership to English Heritage properties for the over-60s is £12 cheaper than for younger adults.
If you are visiting somewhere and you aren't sure whether it offers a senior citizen discount make sure to ask.
Tax-free lump sum
An inelegant phrase that is nonetheless accurate in what it describes: a one-off payment to a beneficiary that is free of any form of taxation. Usually received when using a pension fund to purchase an annuity, as 25% of the overall fund can be taken as a tax-free lump sum.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.