Pensions, On-Call Firefighters, Childcare

This BBC podcast is supported by ads outside the UK. When Vivint Smart Security gives you a smarter way to protect and its smart thermostats give you a smarter way to save, well... That's a smarter way to live. Get the smarter home system Make money predicting football. Now you can. Now in Texas with Calci. Calci is the only platform that lets you legally trade on real world events in all 50 states from football to Bitcoin, the Oscars and even politics. If it matters, you can trade on.

it. Trade on who wins each game, props, spread, and more. Legally, now in Texas. Don't miss your shot. Download the Kalshi app or go to K-A-L-S-H-I dot com. Use code PODCAST and get $10 when you trade a Hello, welcome to this Moneybox podcast. Working parents of young children in England could save thousands of pounds a year after funded childcare is doubled to 30 hours for children under three from September.

the on-call firefighters who could be entitled to thousands of pounds in a pension they don't know about, and if you go abroad this summer, give as little as possible to the banks and the phone companies. But first...

When will you retire? And will you have enough money to live comfortably? Big questions. And this week, the government announced two major reviews to study them. The government said it was concerned that today's workers will be poorer in retirement than their parents.

The biggest task was given to a revived pension commission with a very wide remit, as the Work and Pension Secretary Liz Kendall set out on Monday. The commission is looking at... in the long term how do we make sure we have decent incomes in retirement how do we bring in low earners young people many women who are working in sectors like hospitality retail and social care and the cell

You know, we've only got one in five of all self-employed people saving anything for their retirement. That needs to change and that's what we've asked the Commission to look at. Separately, the government also brought forward a review into state pension age. Reviews have to happen every six years, but the last one only reported in 2023. This latest will look at whether state pension age, which...

is already rising again from next April, should be linked to life expectancy to provide what the government calls fairness between generations. Our reporter Jo Krasner went to ask people in Liverpool about that. 57. And what do you think about the state pension age? During my lifetime it's gone up for a woman from 60 to 67 and I just hope it doesn't go up any further because I can just about hang on for another 10 years.

already finding it more difficult to kind of drag myself out of bed in the morning, do a full day's work. Hi, I'm David. I'm 68. State pension age, probably okay for myself. Just now, I retired when I was 66. I'd seen on the news this morning, they're talking about increasing it again, which I think is really, really unfair for the people coming up. It looks like a nail.

Endless journey for them. And what do you think that it could be linked to life expectancy? Do you think that's fair? Probably, yes. Yep, times move on. You know, 50 years ago, people weren't learning as long. It probably didn't cost the government as long to keep us, if you... But if it affected you, how would you feel? I'd be upset.

I'll be honest about it, yes. Being selfish, yes, I would. My name's Lisa and I'm 51. And what do you think of the state pension age? I look like I will have to retire at 68 and to me that's too high, especially for the job I do. physical job. And they're talking about it being linked to life expectancy. How do you feel about that? I think it reduces your life expectancy. Everyone's going to be exhausted aren't they?

I'm Lucy and I'm 22. I think of the likes of my mum and my dad who are going to be working well into their 60s and I think the toll that that's going to take on them. And I think for my generation, I don't think we'll even get a state pension. I don't even think it'll be a thing anymore because it's just increasing and increasing. I mean, the rate that they're going, it'll probably end up being in the 70s.

Well, listening to that is Zoe Alexander. She's Director of Policy at Pensions UK, which represents pension schemes used by more than 30 million people. Zoe Alexander, Liz and Lisa both worried about being able to work later in life. Lisa says... She has a physical job. Liz said she wants to hang on. She might be able to hang on for 10 years. Present plans to raise it to 68 in 2044. That seems too high for them. How would linking it to life expectancy work? Well...

I think it's very difficult to link it to life expectancy in terms of doing it by cohort. I think you probably have to link it to average life expectancy. And at Pensions UK we believe it shouldn't go up unless healthy life expectancy is increasing.

Actually, since COVID, we've seen healthy life expectancy stalling. And so for that reason, we don't think at the moment it should go up. No, and I have to say there's no indication the government thinks it should go up either. One major problem, though, even... now faced by women when their state pension rose by five and then six years was finding work. It can be hard in your 50s, never mind your late 60s, to find a job. Could it be condemning people to real hardship?

I think, you know, the figures showing the numbers of people working later are encouraging. So there are 100,000 more over 65s working every year. That shows that employers are waking up to this issue. They are employing people at that age.

but of course it does mean that people will need to think about working longer, either full-time or in a lot of cases part-time. Yes, and finding a job you can physically or mentally do at that age too, of course. And what about fairness? The government talks about fairness between generations. It's hard to get Consensus David there.

very honestly said it was fair enough, but not if it affected him. I think it's really difficult, isn't it? I mean, at the end of the day, the state pension needs to be sustainable. At the moment, it's costing the equivalent of about 5% of GDP. That goes up to 7.7%. of GDP by the 2070s. And that might not sound like a big leap, but it's an enormous leap in terms of cost to the government. So they really need to factor in balancing sustainability with thinking about healthy life expectancy.

And, you know, I'm confident that that will happen. I'm confident the state pension will remain. But it's really, really important that it protects as many people from poverty as it possibly can. So you can put 22-year-old Lucy's fears at rest that she thought it may not exist. when she was hard.

I mean, I can't see into the future, but I would be absolutely amazed if anything happened to the state pension. It makes up kind of 50 to 70 percent of most people's retirement incomes. It's a critical part of people's retirement. And actually, if you look at across Europe, it's relatively ungenerous and people get it relatively late compared to other countries. I think there is a real political imperative to keep the state pension at a strong value.

and to sustain that value over time. Yes, very valuable to people, as they often tell us. And, of course, the triple lock is very controversial, isn't it? Raising it with earnings or prices or 2.5%. Do you think that's safe? We would like to see at Pensions UK the triple lock continue to increase the value of the state pension to bring more people out of poverty. But I think over the very long term, most people don't think the triple lock is sustainable.

And so we do think you need other measures like healthy life expectancy to determine the rate that the state pension increases and its correct level. Let me ask you about auto-enrolment. That was the big change recently where everybody over 22...

earning a certain amount over £10,000 was automatically enrolled in a pension. Great success in many ways, of course, because more people are saving into a pension, 88% now. But are they saving enough even to reach what your organisation called a... minimum standard of income.

So many people aren't saving enough and we can't get this message across enough. It is really important that people think about the retirement they want. That's what Pensions UK's retirement living standards are about, helping people imagine the retirement they might expect.

thinking about if they need to save more. At the moment the rate of saving through automatic enrolment which is 8% for most people who are brought into more automatic enrolment is we think too low for most savers so they should be saving more like 12%. And we're really hopeful that as part of the Pensions Commission, there will be a timetable set to increase contributions up to 12% for most people. Yes, 12%. And that's at the moment, 8% is a bit of a myth.

Because it's of a band of earnings. It's 7%, even 6% for people on minimum wage. But you'd like it to go up 12%. And how split, very briefly, between employer and employee? We'd like to see it split 6%. by employer, 6% each basically, 6% from employer, 6% from employee. And in a word, literally, or a number, when can we expect these reviews to report? 2027. Zoe Alexander from Pensions UK, thanks very much.

Now, from September, working parents in England with children aged nine months to school age will get 30 hours childcare a week during term time funded by the government. It simplifies the present system, which has different rules at different ages. And the change means...

Working parents with children under three years old will potentially save thousands of pounds on the cost of childcare. They must apply though. Applications are open now. Rashika and her husband both work. Their three children are aged five, two and one. And she told us how... much money this will save just for her youngest. For my one-year-old, I would probably be looking at, for five days, £1,200 for the nursery fees. And with the 30 hours, I'll be looking at paying roughly about £700.

quite a big chunk off of it what it means for me is that i can be flexible with the amount of hours that i can do before i'd have to be cramming in a lot of hours and i wouldn't get time to spend with the children so i can do term time only nine till four because i'm not having having to be spending so much money on nursery fees, I can be focused more on my children and have that time to spend with the children.

If the 30 hours wasn't there, I'd basically be working to pay nursery fees. Well, with me in the Salford studio is Charlene Young. She's pensions and savings expert at the investment platform AJ Bell. hundreds of pounds, thousands over the course of the year. You've calculated the typical savings compared with the present. Is she in line with them?

Yeah, absolutely. I mean, it's undoubtedly a welcome boost to parents looking to return to work with young children. So we've taken the Department for Education's figures of how much they will pay childcare providers for reimbursement for these. three hours so it ranges quite a lot between different regions different areas but we looked at the average figure so for under twos the government will be paying

over £11.50 per hour to childcare providers. So if you stretch that out for 30 hours over 38 weeks of term time, so it's not the full calendar year, it can be worth up to nearly £13,000 for someone with a child under two. of those tight ratios yes and that is real money that they'll have extra as a result of this and make working

worthwhile um you mentioned the fact that it's 38 hours in the term 30 hours in the term time um 30 hours a week in term time but that's over 38 weeks some stretch it to 52 though don't they it's a bit more complicated how many hours

you'll get over the whole year. Yeah, it is tricky for parents to work out exactly what saving will apply for them. So what I would say is speak to your preferred childcare provider where you've perhaps signed up your child and look at their rate cards. Some, as you say, will stretch that across 52 weeks.

making it easier for people to plan. Others will let you have it just across the term time. So Rashika, for instance, mainly works in term time. So the term time rates will apply to her. But your nursery, they'll be well versed in having to calculate these differences, speak to them, see their rate.

You know, there's lots of unexpected pleasures with having young children, but actually being able to budget for them, you should be able to plan in these cases. Now, parents do have to apply. It's not automatic and not everyone is eligible. There are some income. restrictions yeah so to be eligible this is working parents now obviously we've seen the government struggling with what that exactly is defined as in other areas but here with child care it is quite strictly defined so both partners

in the household need to be working at least 16 hours a week on the minimum wage so that is equivalent to about 195 pounds a week 10 000 pounds a year all the way up to a hundred thousand pounds a year of what's known as adjusted net income which is briefly someone's income less

what they pay into a pension. So those are the eligibility requirements. So hang on, if your income or one of you has an income more than £100,000, you just don't get it? Yeah, this is a... quite a quirk or a cliff edge in our tax system so there's no tapering down like you see with other allowances um it is a cliff edge as soon as one of you trips over that 100 000 pounds this benefit and tax-free child care another child care benefit is lost completely

You can help boost that, though, by paying into a pension. That reduces your adjusted income. You apply for it. You get a code, as I understand it, that you take to the nursery. That doesn't guarantee you a place, though, does it? No. So not only do you have to apply and then reapply to confirm your eligibility every three months, you do get reminders to do this. As you say, it doesn't guarantee your place. So what I would say is...

When I was in this position with my youngest, we had friends going looking around nurseries before we'd even given birth. I thought they were bonkers. But, you know, where we lived in South Manchester, it was very oversubscribed. And, you know, nurseries are saying perhaps it's not enough for them. So you've got to...

Now, this isn't the only help that's available. There's what's called tax-free childcare. That helps with the cost for children up to 11, and that's throughout the UK. But the scheme we're talking about is just England. It varies in different parts of the year. I get really confused about this. Is there one place very briefly people can go to to see what's available? Yeah, absolutely.

Childcarechoices.gov.uk is a brilliant, brilliant website. So you can tailor it by what region you live in. You can look at eligibility and calculators. So yeah, a brilliant resource there. I'll echo that. One of the best government websites there is. Charlene Young for me. AJ Bell thanks very much indeed when you're a pro you got to do a little bit of everything a little a little and even a little

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More than 10,000 people who were what are called retained firefighters are being urged to claim pension payments worth thousands, tens of thousands of pounds, even more sometimes. Retained or on-call firefighters generally work in rural areas. They answer emergency calls as and when they come in, normally alongside doing a different full-time job. Well, now they could be eligible to buy back pensions after two legal changes in the last few years.

this story he's with me dan 16 000 have made this claim but the search is on for 10 000 more who haven't yeah exactly paul so this call comes from what used to be called the retained firefighters union but is now known as the fire and rescue use services association so as you say they're trying to get this message out to these thousands of ex on-call firefighters about making a claim and as you say many have already done it including paul peter and richard who all got lump sum payments

of at least £10,000 and ongoing payments of nearly several hundred pounds per month. Fortunately, I am and always have been a member of the union. So I saw it on the Union website first. It gave fairly obvious ways of applying to your old brigade, which I did, and that's how it started. This extra pension I'll be receiving is a great bonus towards the household especially with the current issues with cost of living increases with the fuel rises and electricity going up.

so i'll be getting around about 180 pounds a month which is you know it's just excellent really and it's um great receive this and what's left over might go on holidays i have five granddaughters so maybe

I shall help them out a little bit, get them set up a bit. As for myself, well, my car's 21 years old, so maybe a slightly different set of wheels. This lump sum payment will... improve my expectations and will mean that i can afford to retire nearly straight away and then going forward it will boost my state pension over a fair few years as well as giving me an extra monthly payment which obviously is

And these times is a very, very useful payment. And Dan, why did they miss out on this pension in the first place? Well, they never actually used to get pensions. But those two legal changes you mentioned, Paul, so one was an EU directive and the other was an employment tribe. So who exactly qualifies? How does it work?

who might qualify and it's based around dates relating to those legal changes but essentially it is this you need to have been working as a retained firefighter anywhere in the uk by the way between april 2000 and april 2006 Now if you worked even just one shift during that time you can put in a claim for your entire career whether that was a few years or even decades and as I said you do have to buy back whatever pension contributions you would have made into the scheme.

but that money can be taken off whatever final settlement you get but how much that cost depends on each individual case and then how much you get well that depends on a variety of factors like time served the rank at which you served and how busy you fire station was thanks dan we're live now to talk to tristan ashby he's chief executive of the fire and rescue services association tristan ashby you've been helping a lot of these former retained firefighters

through this process, it can seem a bit daunting, can't it? How much has it been worth to some of the people you've helped? Well, good afternoon, Paul. It's ranged from several thousand pounds to up to over 100,000 pounds. And as Dan said, it's dependent on the length of employment and your level of earnings when you were a retained firefighter. heard from Dan is that you only have to have worked one shift between those dates and you qualify for your whole career. That seems a bit extraordinary.

That's absolutely correct. So the specific dates are the 7th of April 2000 and the 5th of April 2006. And if you serve just one day within that period, you could be eligible to buy back to when you first joined. And these amounts you talked about, thousands, even maybe hundreds. in some cases, hugely important. And these are people, of course, who've risked their lives frequently for no real great financial reward at the time.

Well, that's absolutely correct. And they didn't join for the financial reward. They joined to give something back to the community. But it does provide an opportunity to provide financial security in their older age, perhaps put a deposit on a house for themselves, their children. their grandchildren or maybe have a holiday for the first time in many years yes as we heard from Paul Peter and Richard there it's really really important money for them and

The people who are entitled, who may be listening, or their relatives, of course, they may be able to claim. But what happens if someone who would be entitled has died before they get the claim in? Can a partner or families put in claims for them?

Well, they absolutely can, Paul. It will be part of a survivor's pension. So it's really, really important that anybody listening that's a survivor of a former retained firefighter or knows somebody contacts their former fire and rescue service urgently. Yeah, so that's how they do it, is it? They contact the local fire and rescue service. How do they do that? And will they have all the details? Do they need to find any paperwork or anything?

So the first point of call would be to contact the former fire service employer and use this specific phrase that they believe they're eligible as being part of the second options exercise. Now that should trigger a process within the fire.

and Rescue Service. There should be some records, certainly that they were employed. There might not be the details about their rank at the time or their earnings capacity, but that's where we can come in and provide the necessary support as well. Right, so you can actually help them with that and you're asking people to claim obviously anyone who thinks they might know someone um is there a time limit on it do they have to get going

So this is an extremely complex process. So originally there was going to be a time limit of 18 months that's already expired. That's been extended with no specific deadline given yet by the government. But when that deadline is... given there is a cliff edge. So once the opportunity closes, it will not be reopened again, which is why it's really important that we are trying to reach as many people as we possibly can. And we believe there are over 10,000 people out there now who are eligible.

and not aware of it. And this is why we're really grateful that you're raising awareness within your programme. Tristan Ashby from the Fire and Rescue Services Association. Thanks. And you can read more on this story on the BBC News website, an article that Dan has written. you've spoken to some of these retained firefighters.

How big a deal is this? Oh, it's massive, Paul. It's massive. And I think the point that Tristan was making, none of these people ever joined the retained firefighting service for the money. They did it because they're community spirited. They did it because they wanted to.

thing to do but actually now um yeah i mean the money that some of the people i've spoken to i mean it's life-changing it is literally the definition of life-changing it's remarkable actually so a final reward perhaps for risking their lives absolutely absolutely

Well, we might need some of those firefighters on call because we're bringing a dragon into the Moneybox Live den next week. Deborah Meaden will be joining Felicity Hanna to talk about what you wish you'd known about money when you were younger. Credit cards, budgeting, savings, tax, even pensions. And of course, what on earth is?

compound interest. We'd love to hear your money mistakes and top tips. Send us a voice note on WhatsApp 0306 783 183 or email us moneybucks at pbc.co.uk and quite a lot of emails are coming in I have to say on on pensions and on retirement. Sadly, this is the last Moneybox podcast before our summer break. Dan is on call and we've rung the bell. And yes, he's back to give us some money saving tips for anyone going abroad for their holiday. Dan.

I'm going to Europe. Now, if I pay with a card or my phone, should I accept an offer to pay in friendly old sterling or the less familiar local currency? Friendly old sterling. Never pay in sterling. Never. If you're using a card and ask you to choose at the checkout... sterling and euros or whatever currency

always choose the local currency. That will be converted to sterling by Visa or Mastercard, and their exchange rates will always be better than the local bank abroad. Yeah, I've seen savings of 10% mentioned, actually. Also, if you're paying by card, I must...

say, we get one that doesn't charge you a 3% fee on everything you spend abroad. There's more of them now, debit and credit. That's my tip. And Dan, you've got an interesting tip about mobile phone charges. Yeah, so this is something I actually used on holiday.

a few months ago and that's especially a good tip if you go somewhere you'd have to pay for using data on your mobile phone so if you're a family or a couple or with good friends you can basically pay for just one set of data on one mobile and then you can use that mobile as what's called a personal hotspot on that phone which everybody can use and they can hook up to that they can link it to your phone and finally

Always think about getting travel insurance, if you want to, before you go. Thanks, Dan. And thanks to the rest of the team on this week's podcast. Joe Krasner, Ima Devlin and Catherine Lund. Our studio manager, Isabel Whitehead. Our editor... is Jess Quayle. I'm Paul Lewis and this was a BBC News Money and Work production for BBC Sounds and from the whole team, have a great summer.

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