Latest news with #pensioners
Telegraph
a day ago
- Business
- Telegraph
Where to retire to escape high-tax Britain
Gone are the days when British pensioners were given an easy ride on tax. Labour's continued freeze on income tax thresholds means a growing chunk of retirees' income is clawed back by the state each year. The state pension is on course to exceed the tax-free 'personal allowance' threshold by 2027 – a phenomenon dubbed the 'retirement tax'. To achieve a 'comfortable' standard of living in retirement today, a single pensioner needs an income of £52,220 a year, according to the Pensions and Lifetime Savings Association (PLSA). This would tip them into the punitive 40p 'higher rate' bracket and rack up an income tax bill of £8,320 – effectively handing over 16pc of their income to tax. But any retirees considering moving abroad for their golden years will find a plethora of low-tax regimes ready to welcome them – without demanding a big slice of their pension in return. Here are four highly desirable destinations where you could slash your retirement tax bill. Greece has devised a preferential tax regime for expats with foreign pensions and investment income as it aims to attract high-net-worth retirees. The country offers a flat 7pc rate of income tax on foreign-sourced income – including pensions – for up to 15 years. You must fulfil certain conditions to be eligible, including staying in Greece for more than 183 days each year, and not having been a tax resident in Greece for five of the last six years prior to arrival. You must also move from a country with which Greece has a double taxation treaty – which includes Britain. Greece's 'golden visa scheme' allows expats to gain residence in exchange for investing in real estate. The Greek government has raised the minimum property value to €800,000 (£684,000) in popular areas such as Rhodes, Kos and Santorini, in an effort to deal with housing affordability for locals. But it is still possible to get the same visa for a smaller investment if you look for homes in less in-demand areas such as the Peloponnese or mainland Greece. Purchasing a property for €400,000 or more is enough to secure you a golden visa. The threshold falls to €250,000 if you convert a commercial building into a residence anywhere in the country, or restore or reconstruct a listed property. The simplest way to become a Cypriot tax resident is to spend more than 183 days a year in the country. Once you are a tax resident, your British state pension, occupational and personal pensions, and annuities will be subject to income tax in Cyprus. The only exception is income from government service pensions, paid to retired members of the fire service, police, civil servants, armed forces and local authorities, which remains subject to British tax. Pension income can be taxed in one of two ways. Cyprus offers a very low 5pc flat rate of income tax on foreign pension income above a tax-free allowance of €3,420. Or you can choose the standard Cypriot income tax system each year, with the first €19,500 exempt. A pensioner on a 'comfortable' retirement income of £52,220 (€61,110) would be better off opting for the 5pc rate. By contrast, anyone with an income below around £21,400 (€25,000) would be better off under the standard Cypriot system. Non-domiciled residents of Cyprus are also exempt from tax on dividends and interest, there are no inheritance, wealth or gift taxes and there is no capital gains tax on property sold outside the island. Expat retirees moving to Italy can benefit from an attractive 7pc flat rate of income tax – but only if they move to certain underpopulated areas. The southern regions of Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sicily and Sardinia offer the rate on foreign income – including pensions – for anyone who becomes a resident in municipalities with fewer than 20,000 inhabitants. While your pension or other sources of non-Italian income will be taxed at 7pc, you will still need to obtain a visa to move there if you are not an EU citizen. The preferential rate lasts 10 years, and to qualify, you must have been a tax resident outside Italy for at least the previous five years. For non-working retirees, the 'elective residency visa' is a popular choice. To qualify, you will need to prove you have an annual income of at least €31,000 for an individual or €38,000 for couples, plus 20pc for every additional dependent, or 5pc for a dependent child. In Britain, anyone over the age of 55 can take 25pc of their pension as a tax-free lump sum. But in foreign tax regimes, including Italy's, this withdrawal will be taxable. David Denton, of investment manager Quilter Cheviot, said: 'Retirees should consider taking their pension lump sum before leaving the UK, as this feature is typically unavailable abroad. This benefit could effectively be lost if not accessed beforehand.' The UAE's low-tax regime has turned it into one of the top destinations for wealthy British expats, with the tax perks on offer extending to pensioners. There is zero income tax in the UAE, which comprises Dubai, Abu Dhabi and five other emirates. And if you spend at least 183 days in a year there, there are no UAE taxes on your assets outside the country. The Dubai 'retirement visa' offers a renewable five-year residency for all expats aged 55 and over who meet either an income or property ownership requirement. Applicants need a minimum yearly income of AED240,000 (£48,600) – or AED180,000 in Dubai. Alternatively, they can buy a property (or properties) in the UAE with a total value of at least AED1m, or hold this amount in savings in a UAE bank account. Levies, including income tax, capital gains tax and inheritance tax are non-existent in the UAE, but other requirements act as taxes by proxy. Mr Denton said: 'Low-tax environments, such as the UAE, can come with hidden costs – mandatory health insurance being a prime example – effectively functioning as indirect taxation.' Another point to consider is that you will not receive the annual 'triple lock' uplift on your state pension if you move to the UAE. Britain does not have a 'reciprocal agreement' in place with the Emirate, meaning your state pension will be frozen at its current level on the day you leave Britain.
The Independent
a day ago
- Business
- The Independent
Urgent scam warning issued over £150 Winter Fuel payment
Pensioners are being warned about scam texts falsely claiming they need to apply for the Winter Fuel Payment. The Department for Work and Pensions (DWP) has confirmed that the Winter Fuel Payment is now automatically issued, requiring no application from eligible individuals. Eligibility for the payment has been expanded to include approximately nine million pensioners with incomes up to £35,000. Fraudulent texts often request bank details, payment, or create a false sense of urgency with application deadlines. Authorities advise vigilance and urge people not to provide personal information in response to these scam messages.
The Independent
a day ago
- Business
- The Independent
Winter Fuel Payment scammers posing as DWP target vulnerable pensioners
Pensioners have been warned to watch out for scam texts about the Winter Fuel Payment changes after Labour confirmed millions more will be able to receive it this year. Eligibility for the payment was slashed for 2024, excluding all but the very poorest pensioners from claiming it. The government has now responded to calls to undo this measure, raising the threshold so that anyone with an income of or below £35,000 will receive it this winter. Just over three-quarters of pensioners – nine million people – will now receive the benefit, the government estimates. The further two million pensioners with taxable incomes above the threshold will remain exempt. Crucially, pensioners now don't need to do anything to receive the payment. It will now be paid automatically to all, with those with incomes over the threshold having it clawed back automatically through the tax system. This means any text purporting to be from the DWP urging pensioners to 'apply' for their Winter Fuel Payment a scam, the department has confirmed. Those receiving these texts should be especially wary if they contain requests for bank details, payment, or claim there is a time limit. The issue was recently raised by Cheshire West and Chester council, whose trading standards officers are warning pensioners in the area against falling foul of the scam texts after seeing a rise in them. The local authority has shared an example of a fraudulent text that was sent to a pensioner in the area: 'DWP Service Centre: You have not yet completed your application for an energy subsidy for 2024-2025. The subsidy is £300. It is important that you submit your application by 10 June. Late applications will not be processed. (LINK) (Please reply 'yes' and then exit the text message and re-open to activate the link, or copy the link and open it in your browser). Have a great day, DWP.' One woman on social media shared how she fell foul of a scam earlier this year: 'I'm absolutely furious! I have just been the victim of a scam targeting older people. I was sent a text message supposed to be from the D.W.P, telling me about the winter fuel payment. The text continues to say that I can't get this because I have not completed the application form yet. 'They said that the deadline is tomorrow and therefore I must complete the form urgently. So they wanted details my full name phone number email address and they wanted to test my card by saying if I pay them £1 then they would reimburse me. 'When I tried to use my debit card it wasn't acceptable so I used my credit card. After that it said that I should send the code that they had sent me to make sure my money was safe. But they hadn't sent me a code. And everytime I pressed help nothing happened. 'They have details to all my money and I am unbelievably stressed so please people be very careful and don't fall for a scam like I did.' Fortunately, she was able to contact her bank to cancel both of her cards, meaning no money had been lost. The pensioner revealed that the scammers had attempted to add her credit card to a mobile phone, but failed because it was cancelled. Cheshire West and Chester council cabinet member for community safety, Stuart Bingham said: 'This latest scam appears timed to coincide with the chancellor's announcement this week of the changes to the winter fuel payment, extending the eligibility criteria. Watch out for fake text messages claiming to be from the Government, inviting you to apply for a new winter fuel payment. 'This scam is a repeat of a similar scam in the autumn of 2024. There is no requirement to apply for the payment. Do not give anyone your personal data after receiving a text message. Please also check on vulnerable neighbours and relatives to ensure they are aware of this scam.'
Daily Mail
2 days ago
- Business
- Daily Mail
SNP deny 192,000 scots OAPs winter fuel cash
Nearly 200,000 Scots OAPs won't get winter fuel help after the SNP broke their promise on universal payments. The Scottish Government announced yesterday that it would only provide its new devolved benefit to those earning less than £35,000. They will receive payments of £203.40 or £305.10 – figures which have been set marginally higher than the £200 and £300 rates offered south of the Border. But those with personal incomes above £35,000 a year – including pensions, investments and other earnings – will have the payments recovered from them through the tax system. It means that 853,000 will receive the payment and get to keep it, while around 192,000 – or nearly one in five – will have it clawed back because they earn more than £35,000. This is despite the SNP previously pledging that they would provide a 'universal' payment this winter, with everyone receiving at least £100. Scottish Conservative social security spokesman Liz Smith said: 'The SNP, like Labour, shamefully betrayed pensioners by axing universal winter fuel payments, before being forced into a humiliating climbdown by the public outcry. 'But this latest announcement means that hundreds of thousands of Scots will not have the payment even partially restored – despite John Swinney's promise that they would. 'This latest slap in the face will not be forgotten or forgiven.' A series of policy announcements and U-turns have been made about winter fuel payments since the Labour government first announced cuts last year. Over the past winter, only those on pension credit received a payment following the initial cuts by the Chancellor Rachel Reeves and the SNP's decision to delay the introduction of the devolved pension age winter heating payments. First Minister John Swinney committed earlier this week to ensuring that all pensioners receive at least the same amount as those in England. But when SNP ministers unveiled the full detail of their plan yesterday, it was confirmed that the intention is for those with income above £35,000 to have this clawed back through the tax system. The Scottish Government confirmed 133,000 pensioners in receipt of pension credit were already receiving winter fuel payments over the last winter, while an additional 720,000 with earnings below £35,000 will become eligible this winter. Adam Stachura, policy director at Age Scotland, said: 'While this is a considerable increase for the vast majority of pensioners compared to what the Scottish Government had originally planned, it only really brings it back to what they received two winters ago. Around four in ten Scottish pensioners were living in fuel poverty then, and it will have sky-rocketed since. 'The policy making on this payment has been guddled, lacked consultation, and politically charged throughout. 'While this is partly to do with the speed of the UK Government's original change and subsequent U-turn, the Scottish Government's repeated commitment to universality and its benefits has been abandoned in a heartbeat. 'While in the end this payment is broadly now proportionally fairer, it doesn't really match the material need of most older people and take advantage of the financial means the government has available to improve it.' Social Justice Secretary Shirley-Anne Somerville said: 'The UK Government's decision to cut the Winter Fuel Payment last winter was a betrayal of millions of pensioners, and their recent U-turn is welcome if belated. 'Following careful consideration of the options available, the Scottish Government will mirror the approach taken by the UK Government. We will bring forward regulations to ensure that, from this winter onwards, all pensioners will receive either £203.40 or £305.10 per household, depending on age. 'We are in discussion with the UK Government to extend the proposed arrangements in England and Wales to recover payments from those pensioners with an individual income of more than £35,000 through the tax system. 'The intention is that the payment will be recovered automatically, and pensioners will not need to register with HMRC for this or take any further action. 'This approach ensures a higher level of support which those most in need will receive. 'Over 720,000 Scottish pensioners are estimated to benefit from the higher payment.'
BBC News
2 days ago
- Business
- BBC News
Scotland to recover winter fuel payment from better-off pensioners
The Scottish government says it will no longer offer its new winter fuel payment for pensioners on a universal said it would seek to recover funds via the tax system from pensioners earning more than £35,000 - matching the system announced by the UK ministers had set out plans for a payment slightly more generous than that on offer from the UK, by £3 to £5 per they faced criticism as payments would go to all pensioners - potentially including millionaires - rather than being targeted at those most in need. Talks are now taking place with the UK government to match the system south of the Justice Secretary Shirley-Anne Somerville said those receiving the payment in Scotland would be better off than their counterparts in the rest of the said pensioner households with no-one aged 80 or over would receive £ will rise to £305.10 for households with someone aged 80 or 720,000 people are expected to be eligible for the funding. Somerville said the UK government announcement last week was a "welcome, if belated" move following what she called a "a betrayal of millions of pensioners" in 2024. She added: "Following careful consideration of the options available, the Scottish government will mirror the approach taken by the UK government."We will bring forward regulations to ensure that, from this winter onwards, all pensioners will receive either £203.40 or £305.10 per household, depending on age."We are in discussion with the UK government to extend the proposed arrangements in England and Wales to recover payments from those pensioners with an individual income of more than £35,000 through the tax system." Chancellor Rachel Reeves last week confirmed the payment would be reinstated to the majority of pensioners in England, following months of anger and protest over changes implemented last Scottish government delayed plans for the pension age winter heating payment after the initial Westminster cut was in November it announced pensioners would receive at least £100 every year. The social justice secretary said the payment would be recovered automatically, meaning no-one affected would need to register with claimed this would ensure people most in need would receive a higher level of support. Somerville had said earlier in June that it was "important to have a universal system" for the payment. The Scottish Conservatives said the decision to not make the payment universal was a "slap in the face" to security spokeswoman Liz Smith said: "This constant chopping and changing by SNP ministers is causing more needless anxiety for Scottish pensioners."This latest announcement means that hundreds of thousands of Scots will not have the payment even partially restored – despite John Swinney's promise that they would."This latest slap in the face will not be forgotten or forgiven by the pensioners affected."
