It was recently announced that the government will stop using the Retail Price Index (RPI) as a measure of inflation and instead use something similar to the Consumer Price Index (CPI), which is about 0.8% lower .
According to the Mirrorthis can cost investors and retirees billions. Someone whose initial pension is £ 10,000 with a compound increase of 3% each year would receive £ 24,273 in 30 years, but with a 2.2% increase that would be £ 19,209 (one fifth less)!
Finance experts at Invezz.com have listed the best tips to help retirees manage their money and increase their savings:
1. Unclaimed credit
Earlier this year, government statistics showed that 30% of pension credit holders (1.2 million) have not claimed it, leaving £ 2.5 billion in unclaimed benefits. On average, this works out to around £ 2,000 per year for each family entitled to it.
Are you eligible for a claim? Those living in England, Scotland and Wales who have reached state pension age are eligible (if you are a couple, you must both be over state pension age). However, this varies depending on the year you were born – you can check yours here .
How do you claim? Use this government tool to check your eligibility. You need information about your income, benefits, pensions, savings and investments.
2. Travel savings
Millions of people over 60 can claim huge discounts on their trips.
An option includes free coach travel in London, Wales and Scotland. To travel for free in London, people over 60 can use a 60+ Oyster Card and then one Freedom Pass once they reach retirement age. In Wales, people over 60 can claim one Concession card for free buses and in Scotland they can get a National legal map .
If they prefer to drive Club 60 is a great way for those over 60 to save on their MOT, air conditioning recharges, wheel alignment, maintenance and more.
3. Energy subsidies
The Energy Company Obligation scheme (ECO) offers those eligible for pension guarantee credit a grant to replace boilers – without it, you could be looking at costs as high as £ 4,000. If you qualify, this is definitely something to watch.
In addition, there is a Domestic Renewable Heat Incentive (RHI) and Green Home Grant that can be claimed for a sustainable heat installation. Find more information about both here .
4. Try to invest
Those who have adequate savings or disposable income may want to consider investing in company stocks.
Invezz.com suggests investing in companies you are genuinely interested in. Being aware of their operations, products, key personnel and more will help you make more balanced decisions because you have a core understanding.
Even in cases where you don’t, companies regularly produce a wide variety of documents, such as their mission statement, financial statements, and shareholder letters, all of which are detailed resources you can use to educate yourself about a business and the way it is run .
Before investing, ask yourself important questions such as: why do I invest? and how much do I want to invest? If you just want to ‘play the market’ in search of quick wins, then you should be wise not to take too much risk. It is recommended to enter the market with a minimum of five years of investment in mind.
5. Change bank accounts
Many of the biggest banks offer sign up bonuses and while it’s hard to tell which one is the best, you can use this one comparison tools to see which one suits you best.
Banks offer their customers many different benefits – some offering cash back, free overdraft, personal rewards or high interest rates. There are a number of different bank account options and they are all used for different purposes, so check them out thoroughly to see which ones work best for you!
6. Reselling vintage items
Whether it’s clothing, furniture or antiques, there is a huge market for all things vintage right now! So why not take advantage of that?
An old coin or book collection can be worth thousands and put a hefty amount in your savings account. A recent study of OnBuy.com found that beanie babies resell for an average of £ 2,207 and VHS tapes can be flogged for £ 2,205, so it’s worth checking the attic for some hidden gems!
7. Restructure your skills
No matter your age, there is always a chance to re-practice your skills. Whether it’s sports, cooking or painting, there are opportunities to pass on your skills to others – for a fee, of course!
As long as you can work with a computer, the world is your oyster. Zoom and similar video calling platforms provide you with the tools to host tutorials / lessons for those willing to learn.