Paul Lewis: December money news
Car insurance compensation, money off electricity bills, the upcoming rise in pensions and a Christmas bonus.
Car insurance compensation, money off electricity bills, the upcoming rise in pensions and a Christmas bonus.
As I write, the pension rise due from 6 April has not been announced, but if it follows the rules, it will once more be a two-tier rise.
The basic old state pension and the standard new state pension will increase by 4.8% in line with earnings. That should mean an extra £8.45 a week on the old, taking it to £184.90.
And an extra £11.05 a week on the new, raising it to £241.30. All the extra bits, such as SERPS and graduated pension paid with the old pension, protected payments paid with the new, and extra amounts for deferring paid with both, will just rise by inflation – 3.8%. An announcement is expected this month.
Every pensioner in England and Wales on pension credit on 24 August will get £150 off one electricity bill this winter. It will appear as a deduction of £142.86, which will be worth £150 off the total as 5% VAT would be added.
The system this year is much simpler, includes everyone on pension credit, and should be automatic. Younger people on means-tested benefits also qualify.
If you think you qualify but don’t get a letter about it by early January, contact your supplier.
Similar rules apply in Scotland but a claim may be needed by some – ask your supplier. It is not paid in Northern Ireland.
More than 270,000 car owners whose vehicles were stolen or written off are to get compensation averaging more than £740 each.
The Financial Conduct Authority (FCA) discovered that some insurers routinely assumed an older vehicle had already suffered minor damage and deducted that from the price they should have given.
The FCA says insurers who did this should find the customers and automatically reimburse them – some already have. If you think this happened to you, then complain to your insurer to make sure it checks whether you are entitled.
You may notice an extra £10 added to your pension early in December. It is the Christmas bonus paid with the state pension since Christmas 1972 when the pension itself was, believe it or not, just £6.75 a week.
It may not seem like much but at least it is tax free! If it had risen with inflation it would now be £118. But if it had gone up in line with the pension it would be £261. That is a measure of how much the state pension has increased in real terms over the past five decades.
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