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Fixed income: taking care of cash during the golden years

Pensioners are celebrating this month after receiving the extra €5 a week announced in the Budget. Well, perhaps 'celebrating' is going too far, but it's worth noting that if the Budget had increased the state pension by inflation, as is often suggested, it would only have gone up by 15c! We often think of older people as poor and vulnerable and many are, but they are also a vocal political lobby and as we live longer healthier lives, turning 65 no longer means reaching for the slippers.

The latest TILDA survey has shown that while 50pc of seniors provide childcare and financial assistance to their children, just 3pc of kids help elderly parents out with cash. That seems lopsided, and puts some older people at risk of abuse. On the other hand, many love the time spent with their grandchildren.

Peter Kavanagh of Active Retirement Ireland says: "Growing old is a mix of challenges and opportunities. For many their contribution to family is financial, either in cash gifting or in valuable services like unpaid childcare. While the vast majority of grandparents don't mind helping out, it's important to remember the impact this has on people's lives. Goodwill is given freely, but should never be taken advantage of.

"The freedom to travel and take part in activities 'off-peak and midweek' can open up a world of discounts and deals. Schemes like the Seniorscard and groups like Active Retirement also unlock a host of exclusive offers for older people. When you're on a fixed income, you have to be careful with your spending."

The Good News

l Banking Free banking is usually offered to over 65s, saving up to €90 a year. Also, if your income is below €18,000 pa (€36,000 for couples), you can get a refund of DIRT tax on savings. l Health insurance Private cover is expensive for everyone, but older people are heavily subsidized by younger, healthier people making their premium relatively cheap. Claims rocket over 60 in cost so this is a real saving.

l State benefits Pensioners benefit from the travel pass from age 66. Over 70s get either the GP or full medical card saving thousands in medical costs every year, along with the household benefits package. Those on lower incomes may qualify for a fuel allowance. l Leisure and tourism Hotels love over 60s. They offer fantastic deals and packages to those who can travel mid-week for instance, often including courses in anything from cooking to music to gardening. l Inheritance Leaving your assets can be made financially easier if you spread them around. Tax free limits on inheritance tax are €310,000 for children, but clever planning means that by willing to nieces, nephews (up to €32,500), charities or grandchildren, you can leave your entire estate tax free if you wish. Get talking to a solicitor! The Challenges l Travel insurance Getting cover to go on holidays can be harder as you age. Some companies won't even provide it once you hit 70. Try AA Ireland or the VHI if you're having difficulties here. l Long-term care Nursing home care is astronomically expensive (around €1,100 per week). The Fair Deal scheme is a no-brainer if you're on a low income with few assets. A decent house, savings and private pension however, and it may be a lot cheaper to avail of the generous tax relief on private fees instead. l Divorce 'Silver Splitters' are the largest growing group of divorcees. Mainly instigated by women, it's vital to get good legal and financial advice if you find yourself splitting up later in life.

Irish Independent