Following reports of a potential increase in the cost of council tax, which would mean the average person would need an additional £ 500, retirees may want to check if they are eligible to apply a pension credit and reduce their tax bill. The tax increase is expected to be used to help finance the government’s new social protection plans.
It is believed that an additional £ 8bn is needed to pay for social services, as well as child welfare, waste and recycling and road maintenance, which could lead to a tax increase housing in the years to come.
As a result, UK taxpayers could face a financial crisis as they are asked to find on average an additional £ 500 per year for council tax.
The Local Government Association (LGA) has said that councils need a 25% increase in public funds in order to pay for social services due to an aging population – and this begs the question of how that will be paid for.
Prime Minister Boris Johnson last month announced welfare reforms designed to lower the cost of care and ensure people don’t face huge bills in retirement, which will be funded in part by a $ 1 increase , 25% of national insurance.
READ MORE: Top five side activities that could increase your income by £ 50,514
Married retirees (or those living in a civil partnership) would see their weekly income increase to £ 270.30 per week, which would mean they could earn £ 14,055.60 each year.
Savings credit, on the other hand, provides additional income to people who have planned for retirement through savings or a pension other than the basic state pension. For single retirees, the additional income offered by the savings loan can reach a maximum of £ 14.04 per week.
This would mean that applicants can receive an additional £ 56.16 each month, or £ 730.08 per year. Those who are married or in a civil partnership could receive an additional £ 15.71 each week, which would mean an additional £ 816.92 per year for the 2021/22 fiscal year.
People who benefit from the guarantee credit element of the pension credit could obtain full payment of their council tax. However, people who do not get secured credit but have a low income and have less than £ 16,000 in savings could still benefit from some relief.
Retirees still have to pay council tax, but can get help if they live alone or qualify for tax assistance.
People can apply for a pension credit up to four months before they want to start receiving the benefit and thus avoid waiting for their first payment.
Claims can be made any time after a person has reached retirement age, but they can only be backdated for a maximum of three months. This means that applicants could receive up to three months of pension credit on their first payment.
However, not everyone will be eligible for the pension credit, as certain conditions must be met. For example, only those who reached the legal retirement age before April 6, 2016 can claim the retirement credit savings credit, while people who reached the legal retirement age on April 6, 2016 or later can only benefit from the guarantee credit of the retirement credit. .
Even if someone finds out that they can only receive a small amount of pension credit, it may be worth claiming it as it could help them qualify for other benefits, as well as obvious benefit of providing additional income.
In some cases, it may even be possible to receive a higher level of pension credit, as people with disabilities, who have family responsibilities or who have to pay certain housing costs, such as mortgage interest payments, may be eligible for even higher income. .
Even though one must have reached the statutory retirement age in order to be eligible for the pension credit, it can be received regardless of whether the applicant has retired or not, which means that even people who have decided to work after retirement age can apply.
The amount of Pension Credit that can be collected depends on the pension pots that the applicant already has, which will be assessed when applying. Other assets such as savings and investments could also be factored into the valuation of benefits.