Pension Credit Eligibility and Benefits

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Products and technologies from our global brands, Norton, Lifeelock, Avast and Money Lion See it in action at genendigital. com It's absolutely crucial. peopleeople know if they're eligible or not. So this is my rough rule of thumb. I've never had a BAFTA before. I'm very excited that I'm going to go and pick up my BAFTA. There's probably the richest selection of bank account switching bonuses I remember. I am not gonna dot my eyes and cross my te'es on this because frankly it makes boring listening. Hello, I'm Martin Lewis and this is the commingly named the Martin Lewis podcast. I do wonder what that's going to be about. And this is our big topic episode where each week we lead on one main subject to help you save. Now usually most of it comes from my DC radio five live show with Adrianne Child, but not this week. This week Adrian and I have done a pod only special just for you So I'm going to tell you what's in the pod once I'm with Adrian. Play the theme tune So S Hi, Martin, what have you got for us We' got lots to talk about today Adrian. We're going to be talking the big subject though There are currently eight bank accounts that will pay you to switch up to five hundred pounds to switch. So my big question to anyone, unless you love your bank. Unless it smiles at you in a beautiful, rather sexy way and gives you a back massage, why don't you get paid to go elsewhere? the financial terms are often better too We're going to be talking about pension credit as well. There are nine hundred thousand of the two point three million eligible pensioners who aren't claiming this top up to the state pension some of the most vulnerable and poorest pensioners in the country. So listeners, I want your help to spread word on that And money mastermind this week, Adrian It' all about pensions and it's an interesting question too. Interesting. Interesting, looking forward to it. You can do get in touch with the podcast anyt timee you want email Martin Lewis podcast at bbc. co. Uk we move on to just putting a garland around your neck? I thought you had a glow about you and it turns out you won an award. whichich one is this? You've got them all by now. I mean Well, no, this is the first ever for having its time and it's actually quite a special one. It's quite funny we're doing this now because I have just been I've been a journalist for thirty years, Adrian. and I think What I did this morning is the first time I've been to a press conference. Because my type of journalism is more data journalism. I don't really go to press conferences. Now I'm saying I think because clearly someone is going to say, Ah now in nineteen ninety nine, you came to a press conference about. So from my memory, and it was a press conference because very kindly BAFTA have decided to give me The special awward for teelevision for changing the face of an industry type award. it's called, I think was the phrasing that' used. And it was announced today. It's one of those BAFTA awards that they announced before the ceremony, which is on the tenth of May. and I had to go and answer questions from journalists about it. and it was a very, very nice announcement. I've never had a BAFTA before. I'm very excited that I'm going to go and pick up my BAFTA. What were the questions like? An Any nasties in there? Any Zinggers or was And I was slightly worried about Zingers on that they were going to go off topic and what was going to come No. There were questions about scam ads, There was questions about you know, do you feel the responsibility that everybody takes your information and acts upon it? Yeah I really do. Boy do I feel the pressure on the back of that And are the difficult times? How long are you going to keep going? Lots of that type of stuff, but they were generally very good and you know, I went off occasionally about scamads. I certainly had a big rant about that one. and Yeah, there's only one question which I'm not going to say what it is. There's one question where I think I may have given a little bit too much about how I communicate with politicians if my answer. So I'm hoping that one just es. Okay. Bank account switching. Yeah. How should we start with this?ave you got any general points you want to start with? So the reason we're doing this right now is there's probably the richest selection of bank account switching bonuses I remember. and as you've just been heard I've been doing this a very long time now. I've been the money saving expert for twenty six years. Has anyone called you a veteran yet? No, haveave you had that? A you a veterancast? not a Stalwart. Which is the which is the sort of's the entry. I think but that's the entry that's the entry room into into sort of veteranans. Whats after the veteran is it venerable Is that the progress? I think it's the light You came to the studio one time, I'm sure that's not a problem. Where were we? Yes, G on bank accounts. yeah, so there is a really, really rich selection of bank accounts that are paying you to switch right now And that is the important thing to remember. Now bank account switching ery easy process And with all of these, you need to operate through the seven working day swwitch service, which really takes about ten days This is what happens You go through this switch service, yourour old bank account is closed for you All your direct debits and standing orwards are automatic standing orders are automatically transferred for you. Any payments to your old account are automatically forwarded to the new account Soough I would say for the really important payments you want to notify them like you know, that will work for a few years, but you've got to make sure everything is transferred to you. It gives you plenty of time to do. And then you will be banking with the new bank Most cases pretty easy and hassle free and all of these, to get the switch bonuses, you need to do that. Now, when I say it's rich at the moment This is partly because there's a slightly new phenomenon. So not only do we have more virtually than we've ever seen open brackets slight lie. lastast week there were nine. I've decided to do it this week. There are eight closeed brackets. But roughly more than we have ever seen But there's this whole new category for high earners where they're giving much bigger switch incentives. So the biggest right now F hundred pounds pay you you don't have earning a decent wic to get that, but they'll pay you five hundred pounds. So it's probably worth before we go all the questions and answers. I'm going to run through Wh's paying what I am not going to dot my e's and cross my T's on this because frankly, it makes boring listening. You will need to go and look up a bit more. Most required you to switch direct debits across. some not all have minimum pays that you need to meet So let's go through this of the non high earners stuff, top payers upfront cash is Barclay's bank at two hundred pounds. optional half price Apple TV with that and Club Lloyds. But that ends today. Thursday, the thirtieth of april at midnight. So if you're listening on the podcast afterwards, I'm afraid that one may well have gone. That's two hundred pounds for free a year's Disney plus and a top debit card for spending overseas. You've got First Direct, which is paying one hundred and seventy five pounds for switches via some routes, which I'm not allowed to mention. you can get two hundred and ten pounds with firstirst direct. That's top rated for service. It's got a seven percent regular saver, a zero percent overdraft up to two hundred fifty quid And also a top debit card for spending overseas. You've got Santander Edge. that's one hundred and eighty pounds for free. It costs three pounds a month, but you can earn up to ten pounds a month if you pay your bills by direct debit through it. Those are the sort of standard ones And then the bigger ones Right HSBC Premio account is currently giving you five hundred pounds free if you switch to it It gives you free family travel insurance, digital GP access. You need to earn a minimum hundred grand a year for that. two that are ending tonight for higher earners. so that's Thursday the thirtieth of april eleven fifty nine PM. Lloyd's preremiere, free five hundred Qid, free digital GP access and Physio and a yearly reward like Disney pllus, and Bercley's preremier a free four hundred pounds pllus various rewards. For Loyds, you need to earn roughly eighty five thousand pounds a year. For Barclys, you need to earn roughly seventy five thousand pounds a year Th you've got NatWest preremier reward, which is two hundred fifty quQid for free, so not that high considering it's one of the preremier ones. And for that, you need to have a salary of one hundred thousand pounds a year. So two hundred quid for most people, five hundred quid for bigger owners. And How do you prove what you earn? How do they know you're not making it up? Really interesting question. while the minimum pay is on the normal accounts There are ways around it by putting money and taking money out. They tend to be much stricter on the high earners account So they're often monitoring to see that The high earning thresholds are actually about making sure you pay your income in Right. So they're asking you, you know, you've got to pay five thousand pounds a month going into this Now if you've got five thousand pounds a month coming from your employer, it's pretty obvious you've got those earnings If you've got two thousand five hundred pounds coming from your employer, you then withdraw two thousand five hundred pounds and put another two thousand five hundred pounds in That may work on the normal accounts, but on the hire earer accounts, they're monitoring that I'm pretty soon they're going to go, You don't really earn over a hundred thousand pounds. pllus on some of those high earner accounts, when you sign up Rit, you have to declare that you have those earnings And it would be fraudulent for you to declare that if you didn't Maggie to switch. why do you have to have direct debit in progress. I normally do standing orders. So that's just a criteria that most accounts have. they want you to switch over to direct debits. What this is about is they don't want you to make this up They won't say, if you're switching to us, we want you to use it as your main bank account. and most people in the modern world have direct debit setu They say youve got to switch to direct debits because it's a way effectively of you proving that this is your main bank account that you're moving over So yes, it's very annoying if you don't operate your banking like that, but unfortunately you're just caught by if they individually polleiced it was your main bank account, would be way more costly to them, so they're not going to do it. I was thinking of switching to Barclay's account, it says pay in minimum two thousand pounds within thirty days to get the bonus. Can I transfer five hundred pounds from another account to Barclayayss and then transer transfer it back and forth until two thousand pounds has been paid, O do I need to have two thousand in the account So generally, I think you probably could get away with the five hundred pound move I would probably suggest you minimize the number. So let's say you earn fifteen hundred pounds a month is your take home salary. I would have fifteen hundred pounds going in, I would take five hundred out and put five hundred pounds back. thenen they're less likely to trigger it. But on the it's sort of what I mentioned earlier on the non Hyireonna accounts, then the terms tend to be, I have to say, haven't read the specific term of the Barclayss account you're talking about. But many times before you've been able to jemmy it with the they're just saying you need to have this amount total going in within a month. So putting in, taking it out, putting in, it's only the putting it in that counts. As long as there's no earnings declaration You will generally get away with that But I can't specifically say for that account. Adrian Adrian asks a good question, not me. This is another Adrian. Adri, You always ask good questions? Well, this one asks the better one. My little stalwart you A these are these rewards subject to income tax I wonder why not? Because they're seen as cashback and reward incentives and they're not the same way as cash backack and a credit card isn't se isn't seen as income, It's not an income. it's just one of those quirks They are not Shean, my only question is why doesn't everyone do it? Money for nothing easy to do. I just wish the banks hadn't cottoned on started excluding people who've had a bonus in the past. I suppose that's about time Isn't it? And yeah, I just get used to one system paying things in and out how the app work does the app work? Crucially, is there somebody on the end of a phone if you need it Dan. I don't know pererhaps I'm the full. Well, no look. I think if you're very happy with your bank and it works for you I'm just not unhappy. Well, yeah, well but so this is a really interesting point. We're talking current accounts here. No When it comes to a savings account, I think Service is less relevant Right When it's a savings account, you're putting money and it's sitting, you're taking it out once. If it's a bit of a faff, you'll get annoyed at that point, but it's not really going to change your life. When you're talking about your day to day banking then actually service becomes much more important because it could be a regular hassle. So if you're properly happy with your bank, look, First Direct has won virtually every customer service poll I've ever done. It ninety two percent great in the last survey I did. Not that many people leave First Direct. So I think there are arguments for sticking However, what Sean is probably thinking is there are also people who deliberately and maliciously in the best way multiply switch bank accounts. And they often use a mule account is the term for it, which is you have an account set up that's got a couple of direct debits that you have income coming in and out and you use that as your basic account and then you switch it time and time again to get all these bonuses. And some people earn decent money from that. In fact, I've got a clip here from our uestion time podcast of somebody who does exactly that We've done all of the bank switches you've recommended. We've made over two grand on that. Oh your serial bank switches love it. Yeah No absolutely. Don't get me wrong. The logistics of working the joint diary and all the bits. I will admit, I did cock up on one of them deny Alex, of which Alex will always, always hold that against me. We're allowed one mistake So as you can see, they made you know, over two grand is doing really well. Of course, there's two of them doing so You know if you follow it and you have to be pretty on top of it, you can make a decent whack by switching bank accounts the right way. we got a call, Jason in Lancaster. Jason, what's your question for Martin? Thanks for coming up Yeah, good afternoon. My question is congratulations on you BaFa, by the way. Oh, thank you very much. That's very kind of you. Thank you. You're very welcome My question is where do you do talk about these switching accounts? It affects your credit score. I mean, every time I checked my credit score, I was in debt for years and it's ten me a long time to dig myself out the h and dt up is telling it semi reasonable Credit score now But on all the credit scores, it says great to have your bank account for six years or whatever it goes up in increment. So how does it affect that? If you swap in sort I mean every six months or so or even once It's going to take a hit to your credit score. So let me it's a really important question and let me just differentiate. I'm going to talk first about switching once. We'll come ont to multiple switching a bit later So the first thing it is always important to understand and I say this is you do not have a credit score There is no such thing as a credit score in the UK What you have is each lender scores you differently based on its own wish list of what is a profitable customer Now the reason people think they have credit scores is they go to credit reference agencies and credit reference agencies give you a credit score Credit reference aggency credit S school is just that agency's loose indication of how it thinks an individual lender would view you three different credit reference agencies all have different credit scores. So there there's nothing firm. Now what happens generally when you switch bank account? Once is you get a short term hit on your credit score This is primarily done because banks lack evidence of longevity and also because normally when you switch bank account because it's got an overdraft, that's a credit application and that marks your file too Normally within about three or four months, you will bounce back to roughly the same level And in truth, I wouldn't switch my bank account if I had a mortgage application or a really important debt shifting application due or debt application in the next three months But if I haven't got one due or if it's nine months away This isn't a problem And you're far better to have the better bank account and the money coming in Once we start talking about as we've just heard, the multiple switches, the people who are doing it all the time can have a bigger long term effect. And most of the people who are doing that are pretty financially savvy and understand They're not in a borrowing position. and what they often do is they might do it for two or three years and then they know their mortgage is coming up because they're on a five year fix and their mortgage coming up in eighteen months time and then they stop and they stop and they have an eighteen month pause doing it so it doesn't have an impact on their credit score But you're absolutely right, it will have an impact. But one isn't a problem unless you've got an iment application. You know we are allowed to do so. Do that help Yeah, that's fine because I mean, like you said, we don't have credit scores over here, but When you've got three different ones like Trans union, clear score, Eencentacters Car score are the three actual ones, the others are agencies that report them, yeah Yeah s veryy confusing when they're Different levels and different amounts on good on. So my biggest thing to stag on the credit scores. should Jason worry about it? because if it feels if it's counting against him Should he not switch Manka, I suppose? that's Jason that's core of your question, isn't it Yeah, prettyty much. I mean, because that I've spent years trying to get my credits, well, the non existing credit score up. Yeah. had to be looking good for lenders. Are you just talking about doing one switch and do you have any imminent debt applications pending like a mortgage or something No, noent deb applications and it would probably just be one switch So so I would say in that case Do it If it's right for you, do it Acept that it's going to be unpleasant viewing for a couple of months when you get your credit score coming in, it's going to drop, which of course, you're really not going to like if you've had a poor credit score in the past because because you've worked very hard to get where you are, I appreciate that. But understand that after a few months it's going to come back to where you are right now or roughly where you are. And remember my big message on the credit scores from the credit reference agencies Don't sweat small moves Small moves that these are not hard and fast. Small moves are meaningless. Big moves you see as a big warning sign something's going wrong Small moves, if it moves by five or ten points, big deal It know and I'm afraid if it moves my five or ten points upwards, it's also. No big deal You know, because because it doesn't matter that much. So I would and I have to say credit scoring has an element of art as well as science in it. so have to you have to give you a little wriggle room. If I were in your position And you could get a good lucrative bank account that was going to make your life easier and put more money in your pocket and you do not have any imminent debt applications coming I would do it and even better now you have to do it with your eyes open that yeah, you're going to see your credit score drop on those credit reference files. But it is not really going to have an impact when you come to do your next application. It's going to be trivial because that application is I don't know, six months a year, two years, three years away Jason, thanks very much for for calling in Sh look at joint accounts, David says, arere there joint accounts where you can benefit from free cash switching Every bank account I mentioned apart from Barcley's allowed jo account switching. Okay So that was from David, Piconi, I think the name is. whyy is switching a joint account over so difficult? Is it No, not generally if you're switching a joint account to a joint account. If you're changing the substance of your account, it can get a little more difficult. I tend to get pretty decent feedback on joint account switching again. It's not normally an issue. so I'd love to hear from people. how' your experience of the joint account switching, please. Rachel, I've switched before to all bank accounts. but not all of them. Surely. I find that these offers don't allow you to do it again. Are there any out there? it's got much more difficult. So it used to be that you sort of could renew encnter as a new customer again, because of course, remember all these switches are new customers only. What they now and then so it was like if you haven't banked with us in the last three years, now the terms for many of them has changed too, if you haven't had a reward payment from us before. So people are getting to a point where they have done them all. I mean, there are people out there who've done them all and you just have to watch out for the terms and conditions. There can be clever ones. Sometimes even existing customers can get a switch if they're opening a new bank account in certain circumstances. But at the moment, again, I haven't done a double check on every single one of them. So I can't one hundred percent answer it, but you're right, it becomes a problem. You do run out. Daniel. It's not problem for most people. means you've done eight or nine switches or something. Daniel, I have a three thousand six hundred pound overdraft. don't really wantanna take it over to my new bank. Can I switch and set up a payment with the current bank to clear down the overdraft The old bank. So this is quite important. So the only bank account that's offering a decent zero percent overdraft at the moment is first direct But that's only two hundred and fifty quQid. Most customers get it. It is credit score dependent. And of course, F Direct is paying Switch' one hundred and seventy five pounds minimum at the moment. So if you think about it for those on lower overdrafts If your overdraft was two hundred quid right now and you were to do that switch At some point in the next couple of months, you're going to get paid one hundred and seventy five quits. that reduces the overdraft and the rest of the overdraft is at zero percent. It can be incredibly lucrative. First direct won't actually move your overdraft. So if you're switching and you're overdrawn You will be given the choice of whether you want your old generally, your old bank does depend on which individual bank. I'm going to give you a generalized description. It can change bank by bank of whether you want your old bank account closed, or whether you want it to sort of switch across, but your old bank account will be open so you can keep the debt there. Now what you could do, of course, is you could use your new account to pay off the old one. What I'm trying to say is it won't automatically port an overdraft. It will port any credit, but it won't port your overdraft across for you So then it depends on the old bank what it could do. Now there are other things you could look at, you could look at getting a loan pay off the overdraft, you could look at getting a money transfer credit card, Tesco and Virgin money. That's where you get a new credit card that pays money into your bank account for you So you owe the credit card at zero percent. They're only about one year zero percent and you'll pay a fee of around four percent for doing so. but that is effectively a way of shifting your overdraft to zero percent interest on a credit card. So there are things that you can look at I'm slightly concerned by the amount of that overdraft, three thousand six hundred is a big overdraft. And it is worth a reminder here that most overdrafts now, we talked about it in money Mastermind a couple of weeks ago is the most expensive form of mainstream borrowing. A typical high street overdraft is forty percent. A typical high street credit card is twenty five percent Actually, if you have an overdraft, your priority unless you've got other extreme debts, your priority should be getting rid of the overdraft ahead of paying off credit cards. Just pay a minimum on your credit card and use any extra money you have to reduce the overdraft So there are things that can be done, but it does get tricky with bigger overdrafts like that. Can you get a package bank account with a switching bonus? Cath' a Lloyds account because they're offering free AA cover. now they're withdrawing. this. Is it best to swap? Do other accounts offer similar? So a package bank account is I tend to think of it as an insurance product. So these are where you get generally worldwide family travel insurance, mobile phone cover, if you're lucky for the whole family's mobiles breakdown cover all included for a one off fee within your bank account. So they call them package bank accounts. I tend to think of them as insurance cover with a bank account on the side because the real benefit is if you need all those different insurance policies, it can be vastly cheaper just to pay the fee for the bank account than it could to get the insurance separately and they tend to be pretty good quality insurance as well So you're asking me, are there any package that have switching to at the moment You've got the Santanda, can I just say for regular listeners? You may remember my New Year's resolution two years ago was to stop saying Santanda. I still have to consciously think every time. and I'm not sure I think I'm closer But it is an absolute mental hiccup saying that word. And so if you ever hit me pause when I say that particular bank's name, it's because I'm determined So the Santander Edge account sorry, the Santander Edge Explorer has a seventeen pounds a month fee. but gives you one hundred and eighty pounds for switching to it. So effectively the fee is covered for just over ten months. It includes worldwide family travel insurance match is seventy five, including winter sprorts Household mobile phone insurance. so for all the phones in the home, if you've got young people you've got kids, teenagers with their own phones, so good for smartphones and UK European breakdown cover for the account holder So if you're in a trusted relationship, you could get this but technically make your partner a joint account holder as well. So that would cover you both. The other one is Club Lloyd's silver That's Arguably better, slightly less insurance but cheaper. So two hundred pounds switch cash but it's only eleven pound fifty a month So effectively, the switchcast there is covering you what for about eighteen, nineteen months This is European not worldorwide familyily traravel insurance Mobile phone insurance, but for the account holder, not for the whole family and family UK breakdown cover with recovery to the nearest garage or at home. So those are two you should look at effectively. I mean, just think about this for everybody else who wasn't thinking about that Effectively, on one you're getting ten months on the other you're getting well over a year, free insurance family travel insurance, mobile phone cover breakdown cover. if you're pay for those separately, that's a pretty lucrative deal. A years forree insurance. what I mean by that? You'll still have to pay the fee, but you willll have got the free money that could cover it So Adrian, you've been asking me questions. Now it's time for me to ask you them Hello and welcome to Money Mastermind, Adrian. The score stands you've got eighteen right, but thirty seven wrong in this three. He' got last week's wrong. I thought you were going to go, I thought you're going to change it. In this three option multiple choice quiz, which means sadly you are No better than random chance. We have to improve this Arian We have to get you better than random chance. Don't start implying you've made it easier, so I'll get it wrong. No Because then when I get it wrong again, then I feel even worse. So I haven't made it easier, but I'm not I'm trying to be sort of Not help you and not fairlease fair Not fair, I was always fair. No, you weren't. I was fair. No You were You wereight anyway, Adri, I'm a bater winner now. can't. O course I'm sorry your majesty Right. So listeners I want you to imag her A ruet fifty nine year old man a broadcaster from the West Midlands. Handsome Charming With a reputation for sparkling repartee and sharp sardonic wit, I know it really is not easy for anybody to imagine Let's try though. This man earns one hundred thousand pounds a year and has long been contributing to his pension. Unfortunately, he has a long owed legacy debt he's still repaying. He borrowed to invest in what he thought was a fantastic opportunity Interest But it turned out it was just the attempt at a BMat app panked rest by one of his best friends and that flopped So last year he decided to take thirty percent of his money out of his pension, some of which was taxed, some of which was tax free and use it to pay off the debt My question Having taken the money out of his pension If he wants to contribute to his pension again this year Can he and how much? You with the premise He had pension money, he took thirty percent out twenty five percent taxary, five percent taxable, took the money out and now wants to start putting more money back into his pension in his age fifty nine. Can he do it? Here are your three options. A? Yes. He can put in up to sixty thousand pounds or his earnings, whichever is lower B, he can put in up to ten thousand pounds or his earnings, which ever is lower or C none Once you've withdrawn, you cannot put money back in your pension So talk me through the first options, the first is sixty thousand pounds But I mean that seems high, but whether you've taken money out or not, you just want to make setting that aside, you just want to make an extra pension contribution. So he wants to make an extra pension contribution but he's already withdrawn money from his pension and had some pension money. That's the key point. Okay. So the question is First of all, your decision is, is he allowed to put anything back into his pension and continue to save him his pension? taking it as read that if he'd never taken anything out, He could put more in. He could put more in than the general limit if you haven't taken any money out You can put in up to sixty thousand pounds or your earnings, whichever is lower. Of course, we're talking about the amount that you contbute tax free. I mean, you could put more it be tax. So this is the amount that we generally talk about going into your pension So that's the general rule for anyone. So my first option A, say I'm being helpful. say helpful. First option A is The fact you've taken money out doesn't change anything The last option C is n on, once you' withdrawn, the fact you' taken money out means you can't ever put money back in again And the middle option B is is there a rule that says if you take money out, you can put less in each year in future I think it's big because that sounds a reasonable compromise because they don't want you're just using it as a bank account taking money in and out. the money you took out. Well that was literally I'm not trying to this isn't trying to leave you, but literally Gege Osborne, when he did his pension freedom was he wanted people to use it as a bank account. Side note. Never do that because it could be huge tax implications of just taking money out your pension. The way you take money out of your pension really matters if you're near pension age call pension wise and make sure you talk to them about it, you could pay way more in tax than you need. But that's not today's question. No. So Age, you were gone me. Yes, what was C again? just one C was, you can't put any money back in say would say An excessive penalty for something where there was some exceptional circstances. I think C iss a compromise. You can just put up to ten K. So B B. B is a compromiseed. Final answer. Final answer Adrian, you're locked in from long d So the usual rule is you can put in up to sixty thousand pounds a year or earnings whatever is lower, tax free Yet once you take your pension, or more specifically access taxable income from a defined pension contribution. And if you remember in the question, twenty five percent was tax free lump sum five percent was tax You dropped the lower money purchase annual allowance of ten thousand pounds on which you still get tax relief. Adrian, you got it right. Hallelujah. Beautiful. There you are. And that's your award today, Thank very much indeed. Thank you, Thank you So look, this is really important to know. The exact rules are pretty complicated. Do not do this again without talking to pension wise, which is totally free guidance for you on this because it's really complicated. What I'm about to give you is broad brush, but it's really complicated. Have I mentioned it's really complicated've sold it enough It's complicated and I'm giving guidance If you take a lump sum Let's say and twenty five percent is tax free, seventy five percent is taxable, you go down to ten thousand pounds J take your tax free lump sum And to just take your tax free lump sum, you'd have to put the rest in a drawdown or an annuity You would not drop down to ten thousand pounds If you took your tax rree lump sum and you took a hundred quit of taxable income from your drawdown You would drop down to ten thousand pounds if you had an annuity payment, you wouldn't It's complicated. haveave I mentioned it's complicated. I think I've mentioned it more than once, It's complicated. so talked to pension wise. The big message you should take from this rather than the complexities of this is If you take money out of your pension and at some point in future you're going to want to put more in, it can reduce the amount that you can contribute and get the tax benefits on. So it's really worth thinking out and checking that you're not doing anything to change that before you do the decision. That's all, that's the bit to remember. It can change things. I need to check before I did it Pension credits Yeah, so look I mean, pension credits was a really big issue during winter fuel payments because and I was very critical of the government for doing this. what it announced is it was going to link eligibility for the winter fuel payment to pension credit No and I mean, that was a mistake because pension credit has for over a decade, I've been talking about it It is a fundamentally undclaimed benefit The hope was that while it did temporarily link it to winter fuel payments, I mean that's all changed now, that there would be communication out there that would mean far more vulnerable pensioners, many state many people on very low incomes would start to claim it But the latest stats are still over nine hundred thousand two point three million people who are eligible aren't claiming it And as it's just been increased for the new tax yearare, even more people are now eligible, some who weren't before But what I really wanted to do, Adrian, is I got an email. And I found this email really important Because some people don't claim pension credit because they think it's not going to be very much money. Actually the average payout's over four grand But you can get pension credit and only get a tiny little bit of it. This email I thought was really interesting I've changed a couple of details because the person wanted anonymity. I'm going to read it to you that's okay. Dear Martin, as a direct result of your and the government impressing on the older generation to apply for pension credit, I have saved almost three thousand pounds in the last year. My husband and I retired, eighty three and seventy six with a state pension I filled out the necessary forms and was awarded pension credit of six pounds ten pence a week So doesn't sound that much. I mean, it's not bad. It's three hundred quid a year But she then goes on to say, this opened up benefits. Due to the application being backdated to when I applied, I didn't have any council tax to pay this year, a saving of two and a half thousand pounds a year. Add to this a free TV license, warm home discount and lower water bill This has resulted in the saving of over three grand a year. This has made such a difference to my husband and me with less worry over the cost of living I still budgeting very carefully, but with less pressure and anxiety. It was, as you advised, that we were owed the money and not the parietas that I decided to apply My husband and I worked as a self employed plasterer and me as a receptionist We had worked hard to buy our own property and had only one child. We'd never applied for benefits How many are in a similar position? I regret to say that I'm too embarrassed to tell my friends that I'm in receipt of these benefits But please keep impressing on your viewers, in this case listeners their rights and urge them to apply I know the forms online are a little daunting, but I'm sure family or a trusted friend would help That's my big message, right Pension credit. isn't just about the money you get itself, It is the core gateway to so many other things. You know, free TV license if you're over seventy five, housing benefit if you're a renter, council tax deductions, free dental treatment, reduced prescriptions, glasses and contact lenses. It's absolutely crucial people know if they're eligible or not. Okay. so do you want to go through the basics about how do you know and how you apply and. So I'm' to give you my rules. These are my rules because it's incredibly complicated who is eligible and who isn't eligible. So we're going to be talking about It's all about your total weekly income. This is for people of state pension aates are roughly sixty six or more. Now your income is any income from any work any private work or state pensions and some benefits capture income as well Plus if you've got over ten grand of savings or investment Each five hundred pounds you have ten grand countls one pound a week income if only it really generated that much. It doesn't, but that's how it's counted But anyway, it's mainly income from work and pensions and the state pensions So this is my rough rule of thumb If you are a single person and your total weekly income is under two hundred and thirty eight pounds a week you are likely to get pension credit If you're a single person and your total weekly income is under two hundred and fifty pounds a week, it is definitely worth checking to see if you'll get pension credit. I'm not saying you will. I'm saying it's worth the time to check If you're a couple both of state pension age If you earn a combined three hundred and sixty three pounds a week or less You are very likely to get it If you earn a combined three hundred and eighty pounds a week or less, it's definitely worth spending the time to check But I'm not saying you will get it. To check, it's dead easy. You can go online to gov. uk forward slash pension. hyphen credit, which just go to gov. Uk search pension credit. Or you can call the pension credit hotline if you're not good online Oh eight hundred ninetine nine one, two, three four My biggest message If you're going to apply or if you're asking about it and you're not eligible, They won't tell you off There's no discouragement from application best thing to do is I think you may be doing Don't stall called or click actually, it's easier online. But that's the message. Don't stall, just call. And please, what I'd like to say to everybody listening to this, if you know someone that this may apply to If you know someone of state pension at age living on a very low income Just talk to them about pension credit, maybe help them through it if you have the relationship that you can do so. It is You know, many people talk about intergenerational arguments and intergenerational wealth gaps What we're talking about here is nine hundred thousand pensioners manyany of whom are living off under two hundred and thirty eight pounds a week and potentially substantially under who can get their income topped up These are some of the poorest and most vulnerable in society And we all have a duty and obligation to make sure they're getting what they're due As I was a successorful in Mastermind. I'll be generous. I'll give you chance to talk about a big win you had on Question timeim. Yeah, your success, my success. Yeah, we just wanted to play this because the Question time podcast which goes out pod only, is well worth a listen and this week's We had someone who got five thousand pounds back. just from calling the podcast Effectively, he had an issue. hisis builders had gone bust He called up, He hadn't been able to use Section seventy five, which I know you know what it is. That's the valuable credit card protection. He asked what should he do? And I gave him a different solution, something to try. I wasn't one hundred percent sure it worked Well This week He got back in touch Tell us what happened Have a listen to this. Mark in Northumberland Martin we spoke in January. I gave you a called and asked a question because admited section seventy five im A you bust builder Yes. Okay That's right, ye,es. Yes. Yes, that's about your builder when puzzed. It's not about some you're not trying to enlarge your chest, yes. No No sorry.. So yeah, it went bust and we orered about seven thousand point five thousand pounds and we' had section seventy five was rejected. Yeah. So it was really a cry for help in January. And you suggested as a last resort to try chargeback because About five thousand of that seven and a half thousand was paid by credit card. Yeah So I raised that with it was EinS Bank. I raised that it was the same day as the call and filled the form out, gave them the evidence. And within about twenty four hours I said, yes. you got a valid claim Um Goose bumps. I promise you, I genuinely have goosebumps. I'm so pleased to hear it because it was it was my last thing scrapingt the barrel that I could think of Brilliant. It was It was a last chance and what they actually didn't realize I did this, but they actually recredited the money. The same day But I didn't know this either, but it has to go through mastercard and you've got to wait sixty days before just to explain to people. so the way a pro a chargeback process works It's actually it's your card company or bank in this case asking the vendor, the firms, card company or bank for a reimbursement because you did not receive the service. So there has to be time for the other people to put in an objection Yes. and they did. They objected after about four weeks. But to their credit, MMS forought my corner and it was challenged and I got a call. so I got an email a few days ago to say It had all been successful, it was all complete and they sent the money through. wonderful. I'm so pleased. Yeah Yeah, I mean, it's not everything that we had, but it was better than the nothing that we thought we were going to get. five grands, five grands. You've gott to look at it from that perspective, haven't you not what you lost because you've lost everything. and this way you've got five grands of it bat. I'm so pleased. Yeah. And so it was a big thank you from us, you know for the help And also, well MNS as well, they actually gave us an additional two hundred and fifty pounds as an apology because they said they should have also told me about charargeback as well. So they had missed out on that, but you caught it so. fantastic. I am genuinely smiling. I love this. is why I do it, right? And absolutely wonderful. I just going I'm just going for everyone listening. justust want to just do a little get a bit techical nerd because I think this is interesting So section seventy five that Mark was talking about is where if you buy something on a credit card that costs between one hundred pounds and thirty thousand pounds, any is jointly liable with the retailer So if the company goes bust, you can go to the credit card company for it. If I remember, in your case it was over thirty grand, wasn't it? It was, but I was trying to argue because there was distinct stage payments in there but that they didn't they didn't accept. So you could have gone to the Ombudsman with that, but I'd said, I think if I remember rightly at the time, I said I thought it was unlikely the Ombudsman would award because There's a hard rule over thirty thousand and you were oour transaction was over thirty thousand for your building. Well I did it as well and you were right. The Ombudsman rejected it as was hard to try everything. Yeah's quite right. Now what's really interesting Now section seventy five is much meatier than charge backack because it's a legal right. Chargeback is a sort of a term and condition of visa master card or AMx, sort of like as an internal dispute resolution process as opposed to a law. Actually If you have a chance to charge back tend to be in some cases more successful because You If it's seection seventy five and if you had let's say you had a case with seection seventy five, MNS bank would have had to pay and it might have tried to fight you because it doesn't want to pay But if you're doing a chargeback, MNS Bank suddenly becomes your agent on your side because it's going, well actually, he's probably got a case for a section seventy five if he doesn't do a chargeback, but we'd far prefer that he does a chargeback because then he gets theoney money off the vendor's bank rather than off users and we don't have to pay out So there's an argument that chargeback is in the interest of your card or bank to do because they're not the one shelling out If you have both cases, what you should always do is you should put in a note, right? You've done this. I know Ma, I know you've done yours, but just for everyone If you do I would probably start with a chargeback but say if the chargeback doesn't work, I reserve the right to do a section seventy five you know and put that in and I want to put a note that I would like you to try both. And that way you actually give them a sort of a vested interest in helping you, which is exactly what happened in this case. and I am delighted. So are you how did you get with the building work? didid they half do it? do I remember? They made a start that hadn't done very much, so we've just been waiting really to to get the outcome of this before we could restart this. so we're just about to get going again. So the job is back on. Great stuff. I wish you all joy and happiness with it. And thank you so much for getting back in touch. We love a success like this. It's brilliant Thank you. I had to I had to say thank you because it was obviously beyond what we'd expected. so so thanks again So yeah, that's on theQuestion Time podcast. It's available on BBC Sounds and anywhere else that you get good podcasts. Do have a listen. It's a different feel to this podcast. I have to say If you're wondering why there's no reply from Main, that's because I'm just doing this bit by myself at the end. Yes, we're in the podcast only bit, but as we were recording this particular podcast not live, we were doing it just for the podcast. There isn't a podcast only bit because the whole thing was podcast only, although just to be really confusing. while it was podcast only, it will be played out on fiveive Live, but it'll be the podcast played out on fiveive Live rather than the fiveive Live played out going into the podcast I think that's probably where I stop That's it for this week. We tend to put out a new episode every Thursday and Monday, The Mondays is the questQuestion time podcast of which you've just heard a little bit. That's where you can ask me absolutely anything and everything open brackets within Reason and Closeed brackets If you've enjoyed it today, please do tell your friends you've been listening to the Martin Lewis podcast