Pensions and Pension Information

2 November Pension Credit Boost spells good news for retired population

 

From 2 November 2009, the first £10,000 worth of savings will be ignored when assessing for Pension Credit entitlement.

The increase sees the level raised for the first time since it was set at £6,000 in 2003 and, claims the Government, this will lead to just under half a million pensioners enjoying an extra £8 a week; some 20,000 people will become eligible to Pension Credit and Council Tax Benefit where they weren’t before; and 90% of those entitled to Pension Credit will have all their savings ignored because they now fall below the new higher limit.

More good news comes thanks to the increase also having an effect on housing benefit and council tax benefit for pensioners.

Benefits not being claimed: “A Worrying Issue”

Pension Credits have been criticised for not being automatic which has lead to many older people missing out on their entitlement. Help the Aged and Age Concern say one in three pensioners are not claiming their entitlement.

Geoff Charles, Managing Director of Bower Retirement Services, has previously commented on this subject, saying: “In one of the areas covered by my company – Barking and Dagenham – it is reckoned that around 3,000 retired people could be missing out on the benefits to which they are entitled. This is a worrying issue and something we come across regularly whilst conducting a means tested benefits analysis as part of our comprehensive advisory service.”

New Pension Credit Limit: “Excellent News for Homeowners Looking to Release Cash locked in Property”

Bower Retirement Services specialises in providing independent financial advice to retired homeowners considering their options for a better standard of living in retirement. The company’s expertise lies with equity release and, says Geoff Charles, the raised Pension Credit limited spells excellent news for homeowners looking to release cash from their properties whilst staying within the limit for means tested benefits.

He says: “The changes to the limit for Pension Credit are good news and I welcome them, but the fact remains there is still an overwhelming number of retired homeowners in need of an income boost, whether that’s to make the most of their retirement with more to spend on holidays and leisure, to help their families, or to make improvements to their properties. Releasing cash via a lifetime mortgage has changed the lives of so many pensioners for the better, and now they can release even more cash and still stay within the benefits limits, it means the retired population is facing an even brighter financial future.”

Woburn, MA (PRWEB) August 14, 2006

During the first week of August, the Senate approved the Pension Protection Act of 2006 by a vote of 93-5. The House had already approved this bill late in July. The President said that he plans to sign this Act into law.

In addition to sweeping changes to the pension plan rules, this Act also makes a few major changes to the tax deduction people can claim for their charitable donations. One big change applies to donations of clothing and household items. As of the enactment date of this new law, taxpayers can only claim a deduction for donated goods that are in good condition or better.

“Once President Bush signs the Pension Protection Act of 2006 into law, you’ll no longer be able to claim a deduction for your donated goods that aren’t at least in good condition. So now’s the time to clean out your closets and donate your unused clothing and household items to a charity,” suggests Andrew D. Schwartz, CPA founder of CPA Niche, LLC (www.cpaniche.com), a site where taxpayers can interact with CPAs who specialize in a variety of niches such as healthcare, real estate professionals, and lawyers.

As always, people who make donations of goods should list each item donated, including each item’s fair market value, and file that list along with their other tax documents. Keep in mind that unless an item is brand new or in excellent condition, it is probably worth no more than one-third of its original cost.

Taxpayers who claim a deduction in excess of 0 for donated goods need to complete and attach a Form 8283 to their tax returns. And anyone looking to claim a deduction in excess of ,000 generally needs to attach a written appraisal to their tax form as well. More information about non-cash contributions can be found in IRS Publication 526, Charitable Contributions, available at www.irs.gov. Give the IRS time to update this publication to reflect the new rules, however.

This Act also increases the documentation required for people claiming an itemized deduction for their donations of money to a charitable organization. Effective as of the Act’s enactment date, taxpayers must maintain a cancelled check, bank record, or receipt from the charity substantiating the date and amount of the donation.

“The Pension Protection Act of 2006 made numerous changes to the U.S. Income Tax rules and will take quite a while for taxpayers and tax professionals to digest,” warns Schwartz. “Even so, with the new standard for donations of clothing and household items taking effect when this bill is signed into law, anyone who waits to drop off their goods to a charity could lose out on a valuable tax deduction.”

Andrew D. Schwartz, CPA is the editor and founder of CPA Niche, LLC (www.cpaniche.com), a site where taxpayers can interact with CPAs who specialize in a variety of niches such as healthcare, real estate professionals, and lawyers. Schwartz has provided tax and basic financial planning advice in interviews with various media, including the Washington Post and Wall Street Journal. He is available for interviews.

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