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    • tallie11
    • By tallie11 18th May 17, 9:26 AM
    • 3Posts
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    tallie11
    Working tax credit and in credit card debt
    • #1
    • 18th May 17, 9:26 AM
    Working tax credit and in credit card debt 18th May 17 at 9:26 AM
    Hi ,
    Please would someone give me some advice - we are in debt up to to 50 grand and are currently recieving working tax credit .
    My husband has turned 55 and can therefore pay of the debt with his drawdown pension fund.
    We will have no savings .
    Will my working tax credits have to stop ?
    Many thanks in advance for advice .
Page 1
    • soolin
    • By soolin 18th May 17, 10:46 AM
    • 58,861 Posts
    • 41,693 Thanks
    soolin
    • #2
    • 18th May 17, 10:46 AM
    • #2
    • 18th May 17, 10:46 AM
    Hi ,
    Please would someone give me some advice - we are in debt up to to 50 grand and are currently recieving working tax credit .
    My husband has turned 55 and can therefore pay of the debt with his drawdown pension fund.
    We will have no savings .
    Will my working tax credits have to stop ?
    Many thanks in advance for advice .
    Originally posted by tallie11
    I will leave your specific question for the Tax credits experts on here. However, I would strongly suggest you get proper independent financial advice before gambling your future to pay off current debts.

    What happens when you retire and you have no money at all? At 55 you have a chance of getting some of this debt cleared before you need to consider retirement, might that not be worth a try, there are a lot of boards on here with money saving tips, try looking for help with budgeting on the debtfree wannabe board before you throw your future financial stability away.
    I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I'm a volunteer to help the boards run smoothly, and I can move posts there. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
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    • soolin
    • By soolin 18th May 17, 10:48 AM
    • 58,861 Posts
    • 41,693 Thanks
    soolin
    • #3
    • 18th May 17, 10:48 AM
    • #3
    • 18th May 17, 10:48 AM
    I'm also going to move this to a more appropriate board where the tax credits experts hang out.
    I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I'm a volunteer to help the boards run smoothly, and I can move posts there. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
    New to Forum? Guide
    • Darksparkle
    • By Darksparkle 18th May 17, 12:11 PM
    • 4,316 Posts
    • 2,731 Thanks
    Darksparkle
    • #4
    • 18th May 17, 12:11 PM
    • #4
    • 18th May 17, 12:11 PM
    Income from a pension is income for tax credit purposes (with exception of the 25% tax free amount on the lump sum). It won't matter that you use it to repay debts.
    • WillowCat
    • By WillowCat 18th May 17, 10:28 PM
    • 671 Posts
    • 761 Thanks
    WillowCat
    • #5
    • 18th May 17, 10:28 PM
    • #5
    • 18th May 17, 10:28 PM
    Any part of the pension drawdown which is taxable will be considered income for WTC. Of course if his fund is £200k then he could just take £50k tax free and leave the rest in the pension.

    If he does need to take taxable pension then he also needs to consider the position with regard to his tax for that year as it would be crazy to end up paying higher rate tax, or even large amounts of basic rate tax if during other years he would have a personal allowance to use up.
    • xylophone
    • By xylophone 18th May 17, 11:06 PM
    • 21,979 Posts
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    xylophone
    • #6
    • 18th May 17, 11:06 PM
    • #6
    • 18th May 17, 11:06 PM
    http://www.justadviser.com/documents/means-tested-benefits-and-pension-flexibility-1312231.pdf

    http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS91_Pension_Freedom_and_benefits_fcs.pdf?dtrk=tru e

    may be worth a read.
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