Beating the Granny Tax

Last month’s Budget attracted the headline ‘Granny Tax’, as the chancellor announced he was to end a century old tax break.  This move will see the retired ‘tax break’ frozen at £10,500, or £10,650 for the over 75s, whilst those retiring in the future will only benefit from the same tax free allowance as everybody else.

The Budget, Savings and Granny Tax!

So, against this backdrop, it’s now even more important that retired people look closely at their savings, and how best to compensate for what, in effect, will be a reduction in their income from these tax changes. After many years of dealing with mature and retired clients, here are 5 ideas I believe are worth considering.

Great tips and advice from Financial Advisers in Shrewsbury

1.      Make sure you are making the most of your state benefits.  According to recent government statistics, around £5 billion of benefits are unclaimed every year. is a very helpful site.  Also, think about changing your driving habits to make better use of your free bus pass and senior railcard.

2.      Check if there are grants available to insulate your home and help reduce your heating costs.  Good loft and cavity wall insulation can make a big difference to your utility bills.

3.      Look at your shopping habits. On general supermarket shopping, consider own label products rather than the well-known brands.  If you are on your own, you could join forces to shop with a friend or neighbour to benefit from offers such as spend over £60 to get £6 off or buy one get one free offers.  One major chemist’s loyalty card also rewards those over 60 with a discount.

4.      Review your utility suppliers. Comparing all the different tariffs available can be quite difficult – enlist the help of children and grandchildren who are good with computers to help you get the facts. You could also make savings by having a water meter installed if you are not an excessive user.

5.      Solar panels may also be worth investigating.  There has been a lot of publicity recently around the reduction in the government ‘Feed-in tariff’ subsidy, but you may still get a far better return with solar panels than on savings you have sitting in a bank or building society account. is a good place to start looking for the latest information.

On the savings side, here are some key questions to consider:

If you or your spouse is a non taxpayer, have you registered for gross interest from your Bank or Building Society? 

Did you know you could transfer Cash ISAs to gain a better rate of return?  The same applies to a Stocks & Shares (Investment) ISA?  With interest rates at historic lows more people are stepping up the risk ladder into equity/investment funds.  One of the most popular funds at present are Invesco Perpetual Income and High Income run by Neil Woodford and his team.

With many Instant Access accounts paying only a few pence interest, would you be prepared to change to a postal or internet account to get a better return?  Several internet accounts currently pay around 3% per annum.

Ben Walters has worked in the Financial Services industry since 1975 and set up Portland Financial Planning, operating in Shrewsbury, in 1992.  He can be contacted on 01743 365813 or e-mail