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  • FIRST POST
    • liketoknow
    • By liketoknow 19th Mar 17, 12:40 PM
    • 26Posts
    • 0Thanks
    liketoknow
    Being stupid or doing the right thing?
    • #1
    • 19th Mar 17, 12:40 PM
    Being stupid or doing the right thing? 19th Mar 17 at 12:40 PM
    I reached retirement age for state pension early last year. I was told that if I claimed it then - January, I would get approx £108 a week as I didn't have enough qualifying years but if I left it until April, I would get more, I qualified under the old scheme. I didn't and don't want to retire yet so I have left it in the pot to get more when I do retire. I also have a very small private pension, there was £24000 in it last year, don't know how much that would make me each week although I would probably take the 25% tax free lump sum out of it before claiming it weekly.
    I still work but only part time, I am 64. I only earn just over £5000 a year but get WTC of just over £52 a week.
    I have put off claiming my State pension, because I would lose my WTC and thinking that by saving it, I would get more when I do retire but, I am struggling with my bills.
    If I do claim my pension, I know I would lose my WTC but would be about £50 a week better off. I don't know if I would have to pay tax, although my earnings are probably set to go down a bit this year anyway.
    If I retired, I believe that my pension would be made up to £155 anyway by Pension Credit, or Universal credit as I believe it is changing to, so is there any point in my not claiming my state pension now? Doesn't it mean that I will still end up with £155 or whatever it goes up or down to, just get less Pension/Universal credit?
    I would leave my private pension where it is until I did give up work altogether. Would that be taken into consideration though when calculating how much Pension/Universal credit I would get? Or would that be on top of the £155?

    I am very confused at the moment. Thanks in advance.
    Last edited by liketoknow; 19-03-2017 at 12:43 PM.
Page 1
    • Alice Holt
    • By Alice Holt 19th Mar 17, 2:03 PM
    • 837 Posts
    • 826 Thanks
    Alice Holt
    • #2
    • 19th Mar 17, 2:03 PM
    • #2
    • 19th Mar 17, 2:03 PM
    This may be helpful:
    https://www.citizensadvice.org.uk/benefits/older-people/benefits-for-older-people/

    Do you live alone?
    Are you getting help with Council Tax?
    Do you rent or own?
    Have you got a mortgage?

    Have a look at this:
    http://www.ageuk.org.uk/money-matters/claiming-benefits/pension-credit/

    You may be eligible for savings pension credit if you reached SRP before 6 April 2016.

    Here is a PC calculator:
    https://www.gov.uk/pension-credit-calculator

    I think PC will assume an income from your private pension, but putting your numbers into the calculator is likely to confirm this.

    I think your logic is right when you say "I believe that my pension would be made up to £155 anyway by Pension Credit, so is there any point in my not claiming my state pension now? Doesn't it mean that I will still end up with £155" ....when stopping work.

    I suspect to maximise income now -
    Claim SP of £108pw (you would likely lose or reduce WTC).
    Continue working and earning £5000 pa.
    The income tax personal allowance is £11,500 for 2017/8 - so it looks you would be below that.

    Do you have any savings / emergency fund?
    It is worth considering taking a Tax Free Lump Sum from your private pension.
    Or you might be able to access it entirely under the small pots scheme see:
    https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum
    IMO the later would be preferable to taking an annuity.
    In addition to the £11.5k tax allowance, there is an additional £1k savings tax allowance so you would be unlikely to pay tax on the £24k of savings liberated from your private pension.

    When you do stop working you should be able to claim PC, and maybe Savings Pension Credit.
    See - http://www.which.co.uk/money/pensions-and-retirement/state-pension/guides/your-state-pension-and-benefits/pension-credit (this has info on how Savings Pension Credit. works).

    There are benefit calculators which would give you an indication if these options are likely to maximise your income -
    http://www.entitledto.co.uk/benefits-calculator/entitlementcalculator.aspx
    http://benefits-calculator.turn2us.org.uk/AboutYou

    Or contact the CAB
    https://www.citizensadvice.org.uk/about-us/how-we-provide-advice/advice/
    Or Age UK - http://www.ageuk.org.uk/money-matters/claiming-benefits/
    For a benefits check.

    Re: the Pension
    https://www.pensionsadvisoryservice.org.uk/ask-us
    https://www.pensionwise.gov.uk/
    Should be able to give you some guidance.

    In your shoes I would be looking at taking the SP now, continuing working, and using the trivial pension legislation to access the private pension.
    Then claim PC when you stop work.

    Hope this helps.
    Last edited by Alice Holt; 19-03-2017 at 2:15 PM.
    • liketoknow
    • By liketoknow 19th Mar 17, 2:22 PM
    • 26 Posts
    • 0 Thanks
    liketoknow
    • #3
    • 19th Mar 17, 2:22 PM
    • #3
    • 19th Mar 17, 2:22 PM
    Thank you, lots of links for me to check out.

    I'm a woman, live alone, own my own house, no mortgage (inherited). Only get single person's allowance for council tax.
    I have no savings so not going to get savings credit, although I did reach SRP age before April last year.
    I tried getting in touch with Cab for help with PIP form but couldn't get hold of them. Was going to try and get an appointment with Age UK to see if they could advise.

    I will have a look at your links, thank you.
    • liketoknow
    • By liketoknow 19th Mar 17, 2:30 PM
    • 26 Posts
    • 0 Thanks
    liketoknow
    • #4
    • 19th Mar 17, 2:30 PM
    • #4
    • 19th Mar 17, 2:30 PM
    If I took my pension under the trivial pot scheme, that would be taxed wouldn't it? I don't earn enough to pay tax now.
    I don't know if the pension scheme I was in allows taking it all as a lump sum,
    • Alice Holt
    • By Alice Holt 19th Mar 17, 2:31 PM
    • 837 Posts
    • 826 Thanks
    Alice Holt
    • #5
    • 19th Mar 17, 2:31 PM
    • #5
    • 19th Mar 17, 2:31 PM
    Currently you may have an entitlement to Council Tax support.
    Apply via your local council.
    • liketoknow
    • By liketoknow 19th Mar 17, 2:41 PM
    • 26 Posts
    • 0 Thanks
    liketoknow
    • #6
    • 19th Mar 17, 2:41 PM
    • #6
    • 19th Mar 17, 2:41 PM
    I think I looked at that but wasn;t
    • liketoknow
    • By liketoknow 19th Mar 17, 2:45 PM
    • 26 Posts
    • 0 Thanks
    liketoknow
    • #7
    • 19th Mar 17, 2:45 PM
    • #7
    • 19th Mar 17, 2:45 PM
    I have just been off work with illness (S/E) and have got behind with bills, any extra money would come in useful
    • xylophone
    • By xylophone 19th Mar 17, 3:09 PM
    • 20,557 Posts
    • 11,756 Thanks
    xylophone
    • #8
    • 19th Mar 17, 3:09 PM
    • #8
    • 19th Mar 17, 3:09 PM
    See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/417473/pension-flexibilities-dwp-benefits.pdf

    If you (or your partner) are over the qualifying age for
    Pension Credit


    Once you (or your partner) reach the qualifying age for Pension Credit, you are expected to use your pension(s) to help support yourself. If you choose not to buy an annuity after reaching the qualifying age for Pension Credit, an amount of “notional” income will be taken into account
    when your benefit is worked out. “Notional” income (in this case) is an amount equivalent to the income you would have received if you had bought an annuity.


    If you take an income from your pension pot, the amount which will be taken into account when assessing your benefit will be the higher of the actual income or notional income. If you take a cash lump sum, this will be taken into account as capital.


    http://www.litrg.org.uk/tax-guides/pensioners-and-tax/what-state-pension-deferral
    • Alice Holt
    • By Alice Holt 19th Mar 17, 3:39 PM
    • 837 Posts
    • 826 Thanks
    Alice Holt
    • #9
    • 19th Mar 17, 3:39 PM
    • #9
    • 19th Mar 17, 3:39 PM
    If I took my pension under the trivial pot scheme, that would be taxed wouldn't it? I don't earn enough to pay tax now.
    I don't know if the pension scheme I was in allows taking it all as a lump sum,
    Originally posted by liketoknow
    See: https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

    "If benefits are not in payment, you should have the option to take 25% of the pension value as a tax-free cash sum. The remainder is added to the rest of your taxable income in the tax-year in which you take it when determining any income tax liability"
    • liketoknow
    • By liketoknow 19th Mar 17, 5:49 PM
    • 26 Posts
    • 0 Thanks
    liketoknow
    Yes, I thought that you could have 25% as a tax free lump sum then the rest added on to income for tax purposes. I want to try and hang on to that for a while as emergency money because I know that if I claim the 25%, I'll have to then start having the monthly pension which I'd rather leave in the pot until I retire.

    I don't know anything about Annuities. I'll have to read up about it.
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