Expats to lose £300 winter fuel payment?

It looks likely that George Osborne may strip around 100,000 expats of their winter fuel allowance, worth up to £300 a year. A possible 'temperature test' is mooted, so only payments could be made for British pensioners living in chillier countries.

Is it right that UK pensioners in Spain, for example, should claim their winter fuel 'right'? %VIRTUAL-SkimlinksPromo%


If you apply the principle of Universal Benefits - a cornerstone of the Welfare State - the answer is Yes. But universalism is under attack, witness the discussions about stripping a roster of benefits from better off British pensioners.

The Mail claims the number of people living in sunnier parts of Europe still banking the benefit has risen following a European Court of Justice ruling last year, enabling the £300 allowance - in some cases - to be paid to almost 450,000 British expats.

Pensions secretary Iain Duncan Smith had previously hoped to stopper the payments to OAPs living in places like Greece, the Canary Islands and Spain - even parts of the Caribbean. But a Strasbourg court overrode him.

Heated debate

Expat winter fuel payments occupy an increasingly grey area between benefits, rights and entitlements. You pay into a pension (state and private). Benefits, on the other hand, can be given to those who contribute little to the UK tax base.

It's also easy to generalise. There are plenty of places in Spain and Greece, for example, that can be pretty chilly in winter. And energy prices are on the rise in most places, not just the UK. (Conversely, the cost of conditioning in many places isn't cheap.)

Nick Clegg appears broadly supportive of a clampdown on the payments. "If you're going to make further welfare savings," he said on the BBC's Andrew Marr show recently, "which I am prepared to look at, then you've got to start at the top, you've got to start with welfare for the wealthy, benefits paid to the rich and the retired."

7 ways to improve your retirement
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Expats to lose £300 winter fuel payment?

If, like many Britons, you have failed to save the cash you need to maintain a comfortable standard of living in retirement, one option is to sell your home and downsize to a smaller property, using the money leftover to cover your living costs.
If moving out of the family home is too much of a wrench, however, the good news is that equity release schemes allow you to stay in your house or flat while still using the equity built up in it to provide some extra cash. The downside of the schemes, which work a bit like mortgages, is that you may not have much left to pass on to any children or other relatives.
But that's a small price to pay for a reasonable standard of living. For more information, try Age UK on 0800 169 6565.

Choosing the right annuity can have a significant impact on your retirement income. And as with most pensions, you automatically have what's called an 'open-market option' (OMO), you can scour the market for the highest annuity rate.
It is worth checking what your pension provider is offering first, though, as some companies offer guaranteed rates for existing customers that are likely to beat those available elsewhere. The Pensions Advisory Service on 0300 123 1047 is a good place to get some free advice.

On retirement, most people convert their pension fund into a guaranteed income annuity that pays out the same amount every month for the rest of their lives.
However, you can also choose an increasing annuity that pays out smaller amounts in the first few years but offers larger payments further down the line. This may prove a wise move if the rate of inflation remains at over 2%.

It is now easier to work later in life because the "default retirement age" has been scrapped.
People approaching retirement age and worrying about money can therefore choose to work for a few years longer - potentially transforming their financial situation. Other than the extra income from working, these people can look forward to higher state pensions, and higher annuity rates due to their greater age.
They can also benefit from bigger tax allowances and the fact that they no longer have to pay National Insurance contributions. Check out this nidirect website for more details.

You could get a much better rate with an impaired-life annuity if you have a medical condition that is likely to reduce your life expectancy.
Incredibly, even snoring, which is a common symptom of Sleep Apnoea could have an impact.
According to figures from MGM Advantage, a man with this condition could receive an extra £12,000 retirement income over the course of their retirement - or £571.44 extra money each year. Click here to find out more.

To maximise your retirement income, it is vital to ensure that you are receiving all the benefits to which you are entitled. These include the basic State Pension, and in some cases, the additional State Pension.
If you are on a low income, you could also qualify for the guaranteed element of Pension Credit, while those with some savings may get the savings element of this benefit. For more information about these and other benefits such as the Winter Fuel Payment, click here.

Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.
The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.


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