Pension lump sum useful or not?

tanith

l am shortly taking Ill-Health Retirement and had planned on using some of my lump sum (its not a huge amount) to make overpayments on my mortgage. I have just had to claim IB as my SSP has run out and just wonder what will happen with the IB when my pension comes through in a few months time. Will I be allowed to make overpayments on my mortgage with the lump sum (it will take my savings over the £16000 mark) or will I have to come off IB until my savings are under £16000) in which case I guess it means the lump sum will be no use to me as it will be used up in living expenses and so would I better off not taking a lump sum?............ but then it looks like I am just trying to scrounge IB when I am not entitled.....

Confused....... don't take much:rotfl:

seven-day-weekend

AFAIK the lump sum will make no difference to your IB, my husband drew his Teachers' Pension while in receipt of IB and the only difference was that his IB was reduced slightly because of his pension income (not the lump sum). At no point whilst claiming IB (nearly two years now) has he been asked about savings/lump sums. He just has to let them know of any changes to his pension income.

seven-day-weekend

Hi Tanith :beer:

tanith

Hiya shoulda just asked u in the 1st place :rotfl:

There is one worry though that when I filled in the IB forms it did ask if my OH and I jointly had more than £16000 in savings... hence my original question.... we don't at the moment but probabely will when I get my lump sum.....

seven-day-weekend

http://www.glasgow.gov.uk/en/Residents/GettingAdvice/WelfareRights/Factsheets/incapacity.htm

Try this site - the second sentence says it is not means-tested.

http://www.edwarddavey.co.uk/news110.htm

However, in 2000 a new law came in that says if you receive over £85 p.w. in an occupational pension, your IB will be reduced.

http://easyweb.easynet.co.uk/vob/alzheimers/information/welfarebenefits.htm#incap

'Incapacity benefit is not affected by the person's income or savings'

seven-day-weekend

Here's the information you need in one place!

Reduction for pension payments

If a person's entitlement to Incapacity Benefit starts on or after 6 April 2001, her/his benefit may be reduced if s/he receives one of the following at over £85 gross per week:

personal pension;

occupational pension;

public service pension;

permanent health insurance arranged by an employer which provides payments in connection with ill health or disability after her/his employment ends. However, if s/he contributed more than 50% of the premiums, the amount s/he receives from this pension will be ignored.

Other types of pension including one off lump sum payments are ignored.

http://www.lawcentreni.org/EoR/incapacity_benefit.htm

tanith

WOW !! thanks for that , it surely has put my mind at rest.... you obviously know all the little places to look ................

THANKYOU..... MUCHLY;)

seven-day-weekend

Yes, I just googled 'Incapacity Benefit Occupational pension' and it came up with the Law Society site and others.

Useful to me too!