Money matters

Small change

Independent financial advice from the Fat Cats at Oldie HQ

EQUITY RELEASE Taking money out of your home through an equity release scheme is a monumental – and one-way – decision. Which? recently tested the quality of the advice given by some specialist equity release advisers and found worrying shortcomings. Four advisers failed its mystery shopping test completely and only two gave excellent advice. Most were average but failed to mention one or two essential points.

In the worst case, the 75-year-old researcher, who needed the money for essential maintenance on his house, was told to take out significantly more and invest it. He would have been paying more in charges for the equity release than he could earn after tax on any savings.

A good adviser will tell you about themselves and what they charge, analyse your financial situation, and explain the various equity release schemes, other ways in which you can improve your income, and the penalty charges you would incur if you wanted to get out of the scheme without leaving your house.

The Consumer Credit Counselling Service (CCCS) – a debt charity that gives free advice including impartial guidance on equity release – was the only adviser to pass all the Which? best practice tests. Elsewhere, advice can cost up to £1,000. Phone CCCS on 0845 074 2987 or look at the website www.cccs.co.uk/ Services/Equityrelease.aspx

Which? members can phone its helpline for unbiased information about equity release.

KEEP WARM The big six electricity companies give a £120 annual rebate to certain customers, especially anyone on a small pension. Those receiving the guaranteed credit element of pension credit automatically get the money. At their discretion, energy companies can also give the refund to other vulnerable customers, including people with a disability or long-term illness, or with children. For this broader group, each company can choose exactly who qualifies and how many refunds they give out, so contact your energy supplier and consider switching to a more generous one if they turn you down.

ONCE IS ENOUGH Registering a death is upsetting, and dealing with a death involves more paperwork and phone calls than a family wants to deal with at such a time. With exceptional common sense, the Government has introduced a simple scheme that takes away a lot of this effort. The Tell Us Once service was launched late last year in collaboration with local authorities across England, Wales and Scotland, and by March 2012 most will be offering the service. It means people need to make just one appointment with their local registrar, who can then advise 28 different services of the changed circumstance, including all state pensions and benefits through the Department for Work and Pensions and HMRC, passports, driving licences, council tax, local library, Blue Badge and social services.

IN WHOSE INTEREST? Millions of borrowers have been receiving refunds after being missold payment protection insurance (PPI) with credit cards and personal loans [see also page 10]. This is good. Many are receiving cheques for thousands of pounds. This is very good. Even better, they are being paid 8% interest on the refunds to compensate for being without their money all that time. But – yes, there is a big ‘but’ coming. There is no tax to pay on the refund element, which simply returns their own money to them, but they have to pay tax on the interest, just as they do when they earn interest in

Not many dead

Important stories you may have missed

Retiring with outstanding debts could be a sign of a lack of financial planning. Vince Smith-Hughes, Retirement Income Specialist, Prudential. Quoted in the Daily Mail

4 OLD MONEY March 2012