When you’re on a fixed income, it can be difficult to account for things such as a cost-of-living crisis or energy bills increasing. With an array of elderly people already living in fuel poverty, campaigners are warning that the rise in the cost of energy could push more into poverty. Although the energy price cap has been frozen until 2024, winter is always a harder time for many elderly people.

If you need help making the most of your savings this year, Smart Money Cymru has compiled a list in order to do so!

Pensions…What are They?

With an ageing population, the UK Government and the NHS are struggling to cope with the demand for healthcare and support. Whilst it’s impossible to predict the future, it may be likely that private pensions may be more important than ever in the coming years.

When you retire, you’ll likely be taking most of your income from a mix of both private and state incomes – your state pension is a regular income that most receive once they reach state pension age.

In order to receive it, you will’ve had to’ve been making National Insurance contributions for at least 10 years.  Once you reach state pension age, you will receive a letter stating how to claim our pension.

Currently (as of the date of this article) the state pension is £185.15 per week, although the amount can vary depending on your National Insurance contributions, additional entitlements and whether you decide to defer taking your pension.

A private pension is a way for you and your employer to put cash aside for your retirement, by law your employer must offer a workplace pension scheme. Most people contribute to this through such a scheme however, you can choose to save another way, through a Self-Invested Personal Pension for example. Ideally you would start saving as soon as possible, so that you can accrue more value on the pension however, it is never too late to start a private pension, no matter how old you are.

When you retire, you can withdraw the money from your pension pot as a tax-free lump sum (up to 25% of your total pension fund.) You can then choose to buy an annuity or reinvest the remaining funds to give yourself a flexible, regular income. You could also choose to take small sums of cash from your pension pot as and when you need them, but keep in mind that after the first 25% lump sum, all future withdrawals will count as taxable income.

Ensure you know all the details before making a decision.

Planning Your Income

Work out your monthly outgoings from your bank and credit card statements. Consider how this may change when you retire. Most people's spending goes down when they don't have to commute to work or buy that daily coffee, for example.

Work out your monthly income sources for when you retire. Pensions, interest or savings for example.

Ensure you know what benefits you may be entitled to, such as senior railcards, VAT exemption, or a Winter Fuel Allowance.

Decide when you want to retire and when your state pension is available. You can continue working while claiming State Pension if you want to. You can also defer your State Pension, which will give you bigger weekly payments when you start claiming it.

A year before you retire, calculate your final pension. Contact your current and past pension providers and find out how much is owed to you and how it will be paid to you.

What Benefits am I Entitled To?

National Rail Senior Discount Card – if you’re 60 or over, National Rail offer a yearly senior discount card for £30 that will get you ½ off your train fare. If you buy a three-year card, it will cost you £70 which will save you £20! If you use the train to get around a lot, this is worth it!

Free bus travel in Wales and Scotland – in Wales the Arriva Club55 ticket is a great way to travel throughout Wales and beyond at a discounted price if you’re over 60. All you need is ID when you travel to prove your age.

You can also get 1/3 off National Express coach tickets too! All you need to a Senior Coach Card for £12.50 per year and, if you don’t save the cost of the card in a year, they’ll refund you the full cost of the card as well!

If you’ve been a National Trust member for five out of the last ten years, you could be eligible for a senior membership when you turn 60. This means you’ll receive a heavily discounted price of 25% off annual adult rates! Also, if you’re over 65, you can opt for a senior membership with English Heritage and get a monthly pass for £49!

Free eye tests and dental treatment when you turn 60 - In Wales, over 60s are entitled to free dental examinations and free eye tests. Don't forget to ask for your NHS discount or free prescription though when you arrive! Also, Specsavers offer over 60s 25% off all glasses and lenses if you buy any single pair of glasses from their £69 range or above.

Most importantly, every household with a person aged 65 or over is entitled to help towards their winter energy costs between November and December. The claim is a lump sum of up to £250 tax free and, once you’re over 80, the sum goes up to £300.

There are so many benefits you’re entitled to, why not shop around and also, don’t be afraid to ask!

It Pays to be Disloyal

Okay, we don’t mean literally, but when it comes to energy providers its sometimes worth keeping a close eye on the market! Ensure you shop around regularly to make sure you still have the best paying account and take advantage of those new customer deals.

Save, save, save!

It’s never too late to save up for a ‘rainy day.’ Why not set up a monthly payment into a savings account to ensure you’re never short – Smart Money Cymru offers many, whether it’s for Christmas or just a general account, and because we’re a credit union, we’re owned by our members, offering our members a yearly dividend dependent on our profits. It only costs £5 to open an account with us, and that £5 will go straight into your new account when you open it.

To work out how much you can save, keep a track of how you spend every penny and then set a budget that covers all the essentials and see what’s left at the end. This is also easier if you have a goal in mind – a holiday perhaps, Christmas or even your dream retirement home!

Just because your income is fixed, doesn’t mean you have to go without! Hopefully these handy tips have helped you how to make the most of your savings and perhaps, how to even add to them!