It's important to get clarity on joint accounts
Q: If a husband and wife have money in a joint bank account, will access to it be freely available to the surviving spouse after the death of the other? My bank will not provide me with a clear answer.
A: Yes. With a joint account the money is held ‘jointly and severally’ by both parties, which means that you both own all of it – rather than each party owning half. Were one of you to die, the contents of the account would belong to, and be accessible to, the other.
On the downside, the same applies to debts – if one of you should run up an overdraft on the account, you are both liable for it. If you’re worried about accessing the account swiftly after one of you dies, make sure that each can withdraw money with just one signature.
Also, if you or your spouse are liable for inheritance tax – which could be the case if you are leaving assets to beneficiaries other than each other – half the value of the money in the joint account will be added to the estate for taxation purposes.
The cash itself is not included with other assets when it comes to distributing the estate, as it already belongs to the second account holder without it needing to be mentioned in the will.
Q: Next year I will be 65 and I understand that I need no longer pay National Insurance Contributions even if I carry on working. At what point do I stop paying? Is it from my birthday, or the end of the tax year?
A: You have to pay NICs only on earnings that were due before you reached state pension age. The correct amount of deductions will be made by your employer with reference to HM Revenue & Customs figures and the date your employer runs the company payroll. If you are paid monthly and reach state pension age on or before the payday for that month, your contributions should cease from the first day of that month.
For example, if your birthday is August 20, and payday is August 28, you should not pay contributions for that month. However, if your birthday falls after payday for that month, you will pay contributions on the whole month.
Self-employed people will stop paying Class 2 contributions once they reach state pension age, but since Class 4 contributions are levied on business profits, they will need to pay contributions until the end of that tax year, but not afterwards.
I am 81 years old and receive £77.45 attendance allowance per week. I don’t pay income tax, but I wonder if I should be paying it on this?
No. Attendance allowance and disability living allowance are both non-taxable benefits.
The way we are...
The number of Britons working past 65 has soared in ten years despite an influx of migrant workers. The Office for National Statistics said that, although there are 789,000 fewer working-age Britons in employment than there were ten years ago, there are now more than 358,000 more pension-age workers, and the number of UK-born over-65s in a job almost doubled, from 418,000 to 776,000.
As many as 360,000 families may have to sell their home this year because endowment policies have fallen short. And the Financial Services Authority fears that up to 1.5 million people in their fifties with interest-only mortgages will be unable to pay off their loans.
If you do one thing this month...
Get your boiler serviced
Do this while the weather is warm to avoid hefty bills for emergency repair call-outs in winter – not to mention being left without heating.
* Read Annie Shaw's Money Clinic every month in Saga Magazine.