Boost Income & Save on Expenses Before and After Retirement

Whether you are in the accumulation phase of your wealth building or the decumulation retirement phase you want to always be aware of ways to boost your income and save on expenses.

And no, this is not a passive income, make money online (MMOL) article... quite the opposite!

Here are the basics to get you up to speed.

Claim benefits

Each year, billions of pounds of benefits are left unclaimed. One of the main culprits for people on low incomes is “Pension Credit”. Pension credit is for people who have reached state pension age. It is made-up of two parts: -

• Guarantee credit. Guarantee credit tops up your weekly income if it's below about 170 pounds for single people and about £270 for couples.

• Savings credit. This is an extra payment for people who have saved money towards retirement, However, most people who have reached state pension age on or after April 6, 2016 won't be eligible. 

Even if you are only entitled to a small amount of pension credit, it's still worth claiming not just for the extra income, but it might help you qualify for other benefits.

Council Tax Help (UK)

You may be entitled to help with your Council tax bill. It could be waived under the Council Tax reduction Scheme, which replaced Council tax benefit. You could be eligible if you are on a low income or claim benefits and have reached the state pension age. If you live alone, you qualify for a discount of 25%, regardless of your financial circumstances. Each Council applies different reductions. Contact your local council to make an application.

Energy bills

If you're a pensioner, you can get help with gas and electricity bills. The UK governments 'Warm Home Discount' is for pensioners on low incomes. It takes off about 140 pounds from your overall winter electricity bill. This is a one off discount applied automatically to your electricity bill between October and March. However, if you receive the 'guarantee' part of pension credit, you will not qualify for this Warm Home Discount.

Older people are also eligible for a winter fuel payment, which can be between £100 pounds £300 pounds, tax free, to help pay for heating. It is also not means tested, so your financial situation is not factored in. If you have deferred your state pension, you will not qualify for this benefit. You also need to physically make a claim for this benefit.

There is also cold weather payment where you get £25 for each seven day period of freezing temperatures between November the 1st and March 31st. You also need to apply for this. However, if you are receiving pension credit, you would automatically receive this payment.

Equity Release

An equity release plan. Or lifetime mortgage. Means you can access equity or value in your home without making monthly payments. Interest payments accrue in the background. And are cleared only when the house is sold. This is a highly specialised area and should only be done after talking to an independent financial advisor.

Part of most people's wealth is their home. An equity release mortgage can allow you to unlock some of that value or equity in your home without moving house. These are basically loans secured against your property which gives you a cash lump sum, or the ability to drawdown money in stages. 

With a normal mortgage, you make payments straight away until the original loan is paid off. With an equity release mortgage, you don't make any repayments in your lifetime, but the the interest charges for the accruing payments can be expensive. The average equity release charge is over 5%.

These plans can have downsides. Such as, significantly reducing any inheritance you want to leave. These plans can also make it harder for you to move. Equity release mortgages do, however, come with a ‘no negative equity’ guarantee so your surviving family members won’t owe money if the home sale doesn't clear the debt. It is for this reason there are restrictions as to how much you can take out. This ranges from about 25% of value of your home to over 50% of the value at home based on your age.