Poor Pensioners

lucycat_2

We are on a pension but cannot claim benefits as we are about £10 over the limit. People worry about families being able to manage but look at the benefits they receive. The cost of living is rising rapidly but our standard of living is going down amost as rapidly. What can we do?

Sailor_Sam

I'm only 55, but something i've been thinking about is the future pension earnings 'threshold' and how my private pensions may affect me. I'm off sick at the moment, and may not be going back to work, so am on benefits.
I've been paying into two private pensions, which i've put on hold. Both have about £8k in them, and when i got my statements last year said this would get me a future pension of £500pa. So that would be about £20pw for the two of them. I could get 25% now and so bring this weekly figure down. I looked into it last year and thought it looked as if in the future i may go over that magic threshold and so lose out on some benefits.
There did'nt seem any way i was going to avoid this, however last week i received my pension summary for this year, they now estimate my pension will return only £350+, so i presume the second pension will be something similar. Normally you would say this is the wrong time to cash-in your pension, but i wonder if it could work to my advantage, if i took 25% up front, the remaining, i think, would leave me under any possible threshold, meaning i would be able to claim for rates etc. I was going to go to the CAB for advice, but would appreciate the thoughts of others.

sleepless_saver

Sailor_Sam wrote: »

Normally you would say this is the wrong time to cash-in your pension, but i wonder if it could work to my advantage, if i took 25% up front, the remaining, i think, would leave me under any possible threshold, meaning i would be able to claim for rates etc. I was going to go to the CAB for advice, but would appreciate the thoughts of others.

You need to know what your total retirement income will be, so if you haven't already got a forecast from the Pension Service, do that before anything else. Then feed the figures into entitledto.com to check out what benefits you might get both with and without your private pension. That should give you a fair idea.

Another thought is that if the value of your total private pension provision continued to fall, you could take the lot under the triviality rules instead of only 25%. Not sure what the exact limits are but I bet someone here will know.

sleepless_saver

lucycat wrote: »

We are on a pension but cannot claim benefits as we are about £10 over the limit. People worry about families being able to manage but look at the benefits they receive. The cost of living is rising rapidly but our standard of living is going down amost as rapidly. What can we do?

Have you had a check done for all the benefits as they do have different limits. For example, you might not get pension credit but you might still be eligible for council tax benefit or, if renting, housing benefit. If one of you needs care, whether or not you actually get it, then consider applying for attendance allowance.

sleepless_saver

sleepless_saver wrote: »

Another thought is that if the value of your total private pension provision continued to fall, you could take the lot under the triviality rules instead of only 25%. Not sure what the exact limits are but I bet someone here will know.

Checked it out. You need to be between 60 and 75 to do this, and the upper limit for the market value of the pension fund in 2008-09 is £16500. Above that you can take on;y the 25% as a lump sum. The £16500 will probably increase by the time you are 60 - it is calculated as 1% of the lifetime allowance - so you might be able to just cash it all in when you reach 60 depending on how it performs.

EdInvestor

Sailor_Sam wrote: »

I've been paying into two private pensions, which i've put on hold. Both have about £8k in them

Assuming they are your only pensions (apart from the state pension) then you should be able to claim them back in cash under the triviality rules at age 60 as they are under the limit (currently 16,500 and index linked).So don't pay any more into them.Instead put additional savings into ISAs (cash and/or stocks and shares, which have the same investment options as a pension.)

Sailor_Sam

Thanks very much everyone for the information about triviality rules, i had'nt heard of that.
It seems a long way off yet, but things have a way of creeping up on you, and i did'nt want to leave things till it was to late.
It seems so unfair when you read about people like lucycat
who are penalised for saving, and then find they are just over the earnings limit, and lose out.
Thanks again.

sorted_2

Not sure if you are 65 or not yet lucycat, or like me under, I can't claim anything either because I am just over the limit, but been told when you get to 65 you can claim a savings part of it.
We always seem to be waiting for birthdays don't we lol

eileenjo

Same here. I am 63 and have a private pension of just £42 a month which takes me over the pensions credit threshold by £3 a week. I do get Council Tax benefit though and will be able to get the savings pension credit when I reach 65.

It is strange thing that we women who could retire at 60 still don't get most of the benefits that we can at 65 such as the cold weather payments in the weather is extremely cold over a period of time.

Cougargb

A warning for those about to claim Pension Credit, they are currently 16 weeks behind on looking at the claims!

seven-day-weekend

We live in Spain on my husband's Teachers' Pension and a reduced rate of Incapacity Benefit.

Because of the exchange rate, we are having to make our money go even further. Today it was 1.18 euros to the £1; when we came here it was £1.58! Just think, for every £1000 that is £400 less when you change it into euros.

We earn nothing in euros (the unemployment rate here is 20% for Spaniards, let alone for foreigners with pidgin Spanish), all we can do is cut back - this we have managed to do so far. Luckily we have no rent or mortgage to pay.

However, if it gets much worse we will be returning to the UK (Luckily we still have our house there) and I will try to get temping work. We will not be entitled to any State Benefits as both our income and savings are deemed too high..

My husband will be 60 in January and I will be 59, so have a year to go before I can claim my State Pension and five years to go before he is 65 and can claim his.