Your money queries answered
Guest finance expert, Jasmine Birtles of www.moneymagpie.com answers questions from Target Ovarian Cancer supporters.
Q: Can Jasmine recommend a good website for comparing annuities as I am taking early retirement later this year? If the pension provider I am currently paying into does not offer the best rate, is it an easy process to transfer the pension ‘pot’? I understand that because of being treated for ovarian cancer for the second time that I should be asking for an ‘enhanced’ pension’ – can Jasmine confirm that this is correct please?
I’ll answer the three questions separately:
What is a good website for comparing annuities?
I asked Ray Black of Moneyminder.com and this is what he said: “There are a few good websites for comparing annuities, such as www.moneyadviceservice.org.uk and www.myannuityplan.co.uk. These sites are clever as they allow you to see the monthly income you will receive in real terms factoring in either inflation or the Retail Price Index.
“Although these sites are useful, as your situation is quite complicated, I would strongly recommend that you take advice from an Independent Financial Advisor (IFA). There are many different factors that could affect the amount you receive. Depending on your illness, it may be better not to go for annuities, because you could find that by doing so, your family is left with very little in the event of your death. A trip to see an IFA, preferably one specialising in retirement, would be money well spent. You can find one at www.unbiased.co.uk”
Is it easy to transfer the pension pot?
If you have a final salary pension, or if you are paying into an employer’s pension with set benefits at the end, you will not usually be able to transfer the pension pot. However, if you have been paying into a private pension with an AVC or money purchase option (which is what this sounds like), there is no reason why you shouldn’t use the fund you have built up with one pension provider to buy an annuity elsewhere. You can find expert advice on the process of buying an annuity on the Moneyminder website.
Should I ask for an ‘enhanced pension’?
Yes definitely. Your IFA will be able to help you shop the market for the best enhanced annuity rates, depending on the severity of your illness, and whether you have dependents.
Q: Can you give any advice on what help there might be for people with a cancer diagnosis?
There’s a lot to think about when you get a diagnosis of cancer, and there are many uncertainties, not least how you are going to support yourself and your family financially. Here are two things to consider:
Benefits and sick pay
Firstly, you should make sure you claim all the state benefits you are entitled to. If you are unable to work because of your illness, you may be able to claim Employment and Support Allowance. This is worth £67.50 during the first 13 weeks of your illness, and up to £99.85 after that. If you intend to stay in your job and take sick leave, you will be able to claim either Statutory Sick Pay, or whatever sick pay you are entitled to based on your employment contract.
If you are eligible for this benefit, or if you receive other benefits like working tax credits, you may also be eligible for money off any prescription charges, travel to hospital, wigs or fabric supports. In order to claim, you will need to fill out an HC1 form, which you can order by calling 0845 850 1166 or pick up at the hospital. Take a look at the section on ‘Ill or Injured Benefits’ at www.direct.gov.uk.
Now is the time to get all your paperwork out. There is a good chance that insurance policies you already have, such as home insurance or life insurance, may cover you in the event of an illness that means you can’t work. If you are employed, check with your employer if you are entitled to any insurance payouts. Some large companies take out income protection insurance or critical illness insurance for their employees, and some offer private medical care. If you have a partner, look at his or her policies too, as they may cover you.
Q: I look after my elderly mother. I am getting to the point of not being fit enough to look after her, what can I do to get the help I need? I can’t afford private nursing.
You need to get an assessment done as soon as possible to see what level of care your mother needs and to see what financial assistance can be provided. This is not a battle you need to face on your own and providing you keep pushing (an essential requirement with many issues in this day and age) you should get the assessment done in a timely manner.
There are various benefits and ways of providing care, whether in the home or in a more specialist place, but it depends on her nursing needs and financial circumstances. Get in touch with your local authority and demand an assessment. There is support out there and you are not on your own and www.carefeeplans.co.uk, created by financial advisor Philippa Gee, is a good source of advice.
Bear in mind that if someone else in your family is able to care for your mother, they will probably be entitled to a carer’s allowance. There is more information on www.direct.gov.uk.
Q: I’m a single 43 year old and have recently been diagnosed. I am worried I might not be able to work through my forthcoming treatment for ovarian cancer or for a while afterwards. I know I should be starting to cut down on my outgoings and economise, but how do I begin?
Thankfully there is lots of help on the internet for this. For a start, we’ve got loads of articles on Moneymagpie.com like this one on how to live on half your salary.
Firstly, do a budget so that you can see what money is coming in and what you have to spend each month so that you know what you have to play with after that. You can do it on the back of an envelope or use an internet calculator like this one. Then see how you can cut down your boring, monthly bills by switching to cheaper versions. Try a few different comparison tables. We’ve got some on Moneymagpie.com but feel free to try others as well to see if you can get even cheaper insurance, gas, electricity, mortgage, phone and so on.
Next, get as much as you can for free! You’d be amazed at how much is out there for the taking once you look. For example, get free meals out by being a mystery shopper. I’ve done that in the past and I got free sandwiches, free pizzas and free meals in pubs just for filling in a few questions about it online. You can find out the good agencies here. You can also get free money by using cashback sites to buy things, watch free entertainment by being an audience member at BBC and ITV shows and get free accommodation by swapping your home with people who live in sunnier countries! We’ve got more ideas here.
There are lots of website, forums and blogs all about saving money and getting things for free so take a look around and see what lots of people like you are doing to make the most of their money. Oh, and make sure you sign up to our free weekly newsletter to get even more offers and freebies!
Q: I’m 53 and was diagnosed with advanced ovarian cancer a few years ago but I don’t know what the future holds. I’ve heard about policies for the over 50s – can I take one out now so that I can provide for my dependent children?
I spoke to specialist insurance brokers Staysure about this and this is what they said:
“There are several policies on the market for over 50s which guarantee acceptance without any medical screenings or questions and they can give you the peace of mind of knowing that you will be leaving something for your loved ones. They’re not all the same though and they offer different levels of cover depending on a number of factors, including age at application, gender and whether or not you smoke.
“You also need to consider how much will be paid out should you pass away during the first two years of taking out the policy because the terms between policies can vary considerably. The pay out on an over 50s plan is significantly less than a normal underwritten life policy for the same monthly premium, but depending on when your condition was diagnosed and the current prognosis you may not get cover under a normal underwritten life policy. It’s also often worth asking your GP to write to the insurer, this can result in a policy which gives you a better return for your money than a ‘no questions asked’ plan.”
It’s a good idea to talk to specialist brokers like Staysure because they can help guide you through the choices available. They work with lots of life insurance companies on your behalf and will make sure that you find you the best deal for your circumstances.
Q: I am retired and live with my husband. We live in our own home and have no mortgage now. I’ve heard about people releasing equity from their property to help with cash flow, can you tell me how this works and whether you would advise it?
Yes, equity release is a possible solution to your situation. However, there are many downsides to it and you have to be very careful about the company you pick if you decide to go for it. I’ve got an article on the ins and outs of equity release here which will help. There are two different versions of it - lifetime mortgages and home reversion schemes - but essentially the principle is the same: you give over part of the ownership of your home to a company and in return they give you money and when you die they get paid the value of their share of your home.
If you have children then you should talk to them about your plans because of course it will reduce their inheritance substantially. In some cases it can be helpful because it could reduce their inheritance tax bill if your home is worth a lot. However, if you don’t have anyone to leave your home to then equity release can be a good way of getting your hands on the cash now! If you do go for this option, though, make sure you do it with a company that is a member of the Equity Release Council which is a self-governing body for equity release firms.
Q: I wanted to help support my children through university but since having ovarian cancer I have had to use my savings and I am now no longer working. I’m worried I might have to tell them I can’t offer them any financial help. Is there anything positive I can do to help them with the finance side of things?
Well giving them ideas and contacts in order that they can make their own money can be even more useful in the long-run than giving them actual cash. For example, I have a friend who funded himself through university by buying and selling cars before and during the time he was there. He had the advantage of knowing a bit about the second-hand car market, but others have other skills and knowledge they could use to make money.
We have an article on ways for students to make money and there are many other ways they can create a pot of cash before they go to college and while they are there. We’ve got lots of money-making ideas here including using the computer, making things and selling them and doing fun jobs like dog-walking and busking.
My friend who made money by buying and selling cars is now a very successful entrepreneur in his 30s. He learnt a lot from his student enterprises and your children could do the same.