Millions of over-60s told 'withdraw cash and move it' amid cost of living crisis
A crucial alert has been issued for millions of UK households aged over-60. Those above 60 are being urged to "act now" to prevent missing out on vital funds as the Cost of Living crisis persists across the nation. Blunders that over-60s are committing include failing to claim Department for Work and Pensions (DWP) benefits they're eligible for, such as Pension Credit or the state pension - if aged over 66.
Additional errors involve withdrawing from a private pension whilst continuing to contribute, which can activate the Money Purchase Annual Allowance (MPAA) and slash your tax-free pension contribution ceiling from £60,000 to merely £10,000 annually.
Families are advised to steer clear of making flexible withdrawals (such as UFPLS or income drawdown) where possible, and urged to examine interest rates on their banking accounts, as many currently sit below one per cent interest.
Households can extract cash and transfer funds to an easy access savings account, with some offering up to 4.98 per cent. As an alternative, over-60s can deposit their money into fixed-rate ISAs and bonds providing up to 4.58 per cent, reports Birmingham Live.
Funderer's chief analyst commented: "Many over-60s are unknowingly leaving money on the table. These aren't complicated strategies - they're simple steps that can have a big impact on financial security in retirement. Acting now can make your money last longer and give you peace of mind."
Mark Hicks, head of savings at Hargreaves Lansdown, has stated: "Given that markets now expect two or three more rate cuts for the remainder of the year, savings rates are likely to continue trending downwards in the months to come, and fixed rate deals above 4.5% may not be around for much longer.
"For savers, this means keeping an eye on your savings rate, and being prepared to switch. You need to keep your emergency fund in easy-access savings, which are likely to drop.
"However, some banks will be in more of a hurry to cut rates than others, so you could more than double the rate from a pedestrian high street giant by shopping around among online banks and savings platforms.
"For money you don't need for longer, this is a decent opportunity to consider fixed rate savings. Fixed rate deals, which guarantee the rate for a specific period – from a couple of months to five years – will let you lock in a rate for the duration.
"These have come down from the peak, but you can still make around 4.5%, and as easy access deals get less generous, these deals will look increasingly attractive.
"It means anyone who has money they don't need for a fixed period of a few months or longer should consider tying it up for a better rate."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Western Telegraph
5 hours ago
- Western Telegraph
Employment rises across Pembrokeshire compared to 2024
Employment figures for the county show a four per cent rise in jobseekers finding work compared to the same period last year, pointing to a positive trend in job placements. A spokesman for the Department for Work and Pensions (DWP) said: "Although a modest rise, the county is seeing an improvement trend; long may that continue. "Staff in our three Jobcentres will continue to put 100 per cent effort into doing what is best for all those jobseekers not yet in work in order to help them gain the skills, knowledge and qualifications to make that step into employment; thus, they will be better off financially to provide for themselves and their families and to boost the economy of Pembrokeshire and Wales which benefits all who live here." The DWP is encouraging employers across Pembrokeshire to take advantage of recruitment support available through local Jobcentres. Fred Hatton of the DWP Pembrokeshire Employer and Partnership Team said: "We want to work with you to fill your vacancies. "Our Jobcentres are open for recruitment events tailored to individual employers, and we regularly host jobs fairs that bring multiple businesses together under one roof. "We can also organise work academies and boot camps to help prepare candidates for your roles." Jobseekers are being offered a range of opportunities to build lifelong skills through pre-employment training and voluntary work experience. A DWP spokesman said: "The programmes provide valuable hands-on experience and help develop essential transferable skills. "They can be a stepping stone to a new career path. "Attending a jobs fair is a great way for jobseekers to meet employers face-to-face, learn about live vacancies, and discover the full range of support available through their local Jobcentre." Nationally, the employment rate stands at 75.3 per cent, a slight increase on the previous quarter. Minister for employment, Alison McGovern, said: "Today's figures show real progress with economic inactivity down, and 384,000 jobs added to the economy since last summer, putting more money in people's pockets. "We are determined to see unemployment fall; that is why we are focused on getting people into good jobs by joining up work, health and skills support and transforming Jobcentres to focus on genuine support, not ticking boxes. "As we grow the economy and transform opportunity in every area with our Plan for Change, we will ensure no one will be left on the scrapheap."
Daily Mirror
6 hours ago
- Daily Mirror
DWP sends urgent warning to Universal Credit claimants who have money in savings
The Department for Work and Pensions (DWP) has issued a warning to anyone who claims Universal Credit and has any amount in savings A stark warning has been issued to millions of Universal Credit recipients who have any amount in savings. It's common knowledge that if your savings surpass £16,000, you're not eligible for Universal Credit. However, the Department for Work and Pensions (DWP) is reminding Universal Credit claimants that this is simply the upper capital limit, and having savings less than this can still affect your benefit amount. The lower limit for savings on Universal Credit is actually £6,000. For every £250 you have above this, your payment will be reduced by £4.35. This is also rounded up, so if you have £6,400 in savings, a total of £8.70 will be deducted from your payments. In other similar stories, DWP confirms new Winter Fuel Payment deadline with pensioners urged to act now. Few people are fully aware of what constitutes savings or capital in the DWP's calculations. For Universal Credit, it includes cash, any savings accounts, property you own but don't live in, cryptoassets, inheritance payments and even money that belongs to someone else but is in your name, reports Birmingham Live. Your personal possessions are not taken into account, though, the DWP guidelines on its website confirms. Some types of money, savings, investments or other assets might not affect your claim for Universal Credit. Nonetheless, you still need to tell us about these so we can decide whether to take them off your overall money, savings and investments. All money, savings and investments you have in the UK and abroad are taken into account, including cash and money in your bank account, including your main bank account. The Department for Work and Pensions (DWP) takes into account a wide range of financial assets. This includes current accounts, digital-only accounts such as PayPal, and various types of savings accounts: bank, building society, credit union, Help to Save, Post Office, and National Savings and Investments (NSandI) accounts. It also considers savings held in your name for children, money that belongs to someone else but is in your name, savings set aside for essential building work (unless it's from a grant or loan), and funds saved for medical care. Individual Savings Accounts (ISAs) are also included: cash, stocks and shares, Innovative Finance, Help to Buy, and Lifetime ISAs. Other financial assets taken into account include Premium Bonds, dividends, stocks and shares, and crypto assets. The DWP also considers property you own but do not live in, property, land and savings held abroad, inheritance payments, business accounts, and assets from businesses that closed over 6 months ago. Money held in trust funds is also considered, except in certain circumstances. Finally, the DWP takes into account unspent benefits, such as Child Benefit, Personal Independence Payment (PIP), and Disability Living Allowance (DLA), as well as any unspent income.
Daily Mirror
7 hours ago
- Daily Mirror
Pension alert for under 65s as DWP data shows 7 in 10 Brits are taking risk
New figures have sparked concern about the number of people withdrawing pension funds early as one expert details how to do it safely New Department for Work and Pensions data has raised alarm bells over how Brits are tapping into their pension pots at younger ages. The statistics showed that seven in 10 people who took flexible payments from their pension since 2015 were younger than 65 years old. Lisa Picardo, Chief Business Officer UK at PensionBee, warned that early pension access could easily result in people "draining their pension pot before they reach retirement", especially during the current cost of living squeeze. However, she said it is possible to begin drawing your pension in your early 60s or even late 50s without jeopardising your retirement security if you stick to certain fundamental guidelines. The 2015 pension freedom reforms permitted individuals to tap into their pension from age 55. This currently sits 11 years ahead of state pension eligibility. And this gap is set to widen as the state pension age faces ongoing review and rises in step with life expectancy data. For those drawing their pensions at the first opportunity, this could risks their money falling short even before state pension payments kick in. To avoid this pitfall, Lisa said: "The key is planning ahead and withdrawing sustainably. "Work out how much you might need each year from your personal pension in addition to what's available from your State Pension, factor in inflation and tax, and consider leaving as much as possible invested to keep growing. Even small adjustments to how much and how often you withdraw can make a big difference to your future income in later life. "Most importantly, remember your pension needs to last a lifetime. It needs to be there to support you for the whole of your retirement, not just the early years, so pacing yourself can help you enjoy the journey without running out of fuel." Looking at the new DWP statistics, Lisa expressed some optimism for what lies ahead. She pointed out how the data appears to demonstrate "a maturing" in how those over 55 have used their retirement funds since 2015. The pensions specialist said: "Rather than people raiding their pots the moment they turn 55, we're seeing more sensible behaviour, and people are waiting until they're genuinely approaching, or are in retirement, before making significant withdrawals. This may be reflective of longer working lives, delayed retirements and increased longevity. "Back in 2016, people in their late fifties were the biggest users, taking 42% of all taxable withdrawals, followed by 28% in their early 60s, and 30% in the over 65 age category. Now the 55-59 group has dropped to just 26%, with a stable 28% in their early 60s, and 46% of taxable withdrawals from the over 65s."
