What do Gary Lineker and Equity Release customers have in common?
The BBC License Fee. Let me explain
Pensions Credit is a hugely valuable addition to any later life borrower not only with the welcome extra income but all the associated benefits received, such as the free BBC License.
The BBC has announced that it is scrapping the free TV licence for people aged over 75.
This means up to 3.7 million pensioners will have to start paying from June 2020.
The current licence fee costs £154.50 for a colour licence and £52 for a black and white licence. TV licences for over-75s were previously funded by the government.
However, around 1.5 million households that include someone over 75 claiming pension credit could still be eligible for a free licence. The BBC says you will need to provide evidence that you are in receipt of pension credit to claim a free TV licence.
The Pensions Credit tops up your income to a set amount, which you can check online or in the tax sheet, more if you’re married. Your existing income can come from any place – private pension, state pension or your salary from B&Q.
The problem for potential later life borrowers is any lump sum savings will reduce your pensions credit. Releasing equity from your property gives you a lump sum normally and when this is popped into the bank, can be used to reduce your pensions credit.
If you have savings above £10,000, every £500 you have above £10,000 is counted as £1 of income when your Pension Credit is calculated, so it won’t be long until you receive no credit at all.
Previous to 2016, you could also receive even more to compensate you for having savings, but this was phased out then.
You can work out the exact date of your State Pension age by using the State Pension age calculator on GOV.UK website.
The best news is that Pension Credit opens up the gateway for other goodies, including the BBC License fee. You will automatically qualify for maximum Housing Benefit, but you have to make a separate claim. The £16,000 capital limit for Housing Benefit will not apply if you are getting Pension Credit.
If you struggle in the cold weather, and who doesn’t, you’ll also get the Cold Weather Payment. You do not need to make a claim as the payment will be made automatically for each qualifying period of cold weather – 7 consecutive days of zero degrees Celsius
Where does Gary Lineka appear? He’s the top earner at the BBC, the top paid BBC star for the second year in a row, earning a salary of £1,750,000. The papers are calling for him to help those pensioners who can’t afford their license. On the ‘ed Son.