Investment Bonds re Pension credit

laythorpe

Hello everyone, this is our first post. We have read with interest several posts regarding Investment Bonds with Life Assurance, with regard to claiming pension guarantee credit. We have 2 such investments and they have been included as savings even though we have not drawn any income from them. The reason being is that we have "access" to the money. This then takes us over the threshold, our claim therefore rejected. As this seems contrary to the posts we have read, can anyone give any advice please. Should we appeal? If so, how do we phrase it.
Any help appreciated. Thank you.

McKneff

It takes you over the threshold, theres no way out of it I'm afraid.

(join the club);)

Whiteknight

Did you send in details regarding the life assurance on the bonds, as the value of bonds with life assurance on should be disregarded.

Do you know who made the decision regarding the bonds - it would normally be a specialist decision maker. So it might be a good idea to contact the Pension Service and find out who actually processed the claim. If it was a specialist you might want to speak to that section (can be difficult to get to speak to them) and hopefully they will explain why the decision went against you.

If it was not a specialist then I would advise you to ask for the claim to be reconsidered and follow this up with a letter clearly stating why.

I have seen claims where savings should have been disregarded but the agent processing the claim has missed this and subsequently paid the incorrect amount or told the customer that they are not entitled.

laythorpe

Thank you for your comments. Sorry for delay in replying. A gentleman from the local DWP came to our house to help fill in the form. He didn't know whether they would be taken into account or not. However he photostated the current bond statement showing the value of the bond, cash-in value and value on death. The words Life Assurance don't seem to appear on the statement. One of the bonds was arranged by the Halifax and the product is a Personal Investment Plan provided by St Andrew's Life Assurance plc. The other is a Friends Provident product and is an Investment Portfolio Bond and the policy schedule shows Lives Assured.
Wondering now, has the claim been rejected because there is a cash-in value and the money not full tied up? We do not know at this stage the level of the person who made the decision.
Any further comments appreciated.
Thank you.

sunnyone

laythorpe wrote: »

Thank you for your comments. Sorry for delay in replying. A gentleman from the local DWP came to our house to help fill in the form. He didn't know whether they would be taken into account or not. However he photostated the current bond statement showing the value of the bond, cash-in value and value on death. The words Life Assurance don't seem to appear on the statement. One of the bonds was arranged by the Halifax and the product is a Personal Investment Plan provided by St Andrew's Life Assurance plc. The other is a Friends Provident product and is an Investment Portfolio Bond and the policy schedule shows Lives Assured.
Wondering now, has the claim been rejected because there is a cash-in value and the money not full tied up? We do not know at this stage the level of the person who made the decision.
Any further comments appreciated.
Thank you.

They will be taken into account, you can access them at an time (even if there are penaties the funds are available to you) and like many other bonds they are realised upon death as all of mine are.

jem16

The capital from Investment Bonds are disregarded - the income from an Investment Bond is taken into account.

Taken from here;

http://www.grayandassociates.co.uk/StatePensions/StatePensionCredit

An individual’s qualifying income may also include a deemed income from capital.

Investments that include some life insurance, for example investment bonds, are ignored in establishing an individual’s entitlement to State pension credit, provided the agreement states how the payment on death is worked out. However, any income taken from the investment will be taken into account, since this would be deemed to be income taken from capital.

Bunter_2

The regulations are unclear and it seems the Pension Service have to balance out conflicting considerations.

On the one hand it is considered right that people should be able to insure their lives to make provision for dependants and pay off debts.

On the other hand it is not (perhaps) considered right that people should be able to sink all of their assets into investment bonds linked to life insurance and then claim benefits.

If you do a google for "key update treatment of investment bonds" you will see an excellent article on the "Elderly client advisor" web site, which discusses many of the issues surrounding life insurance investments and benefits.

Should you appeal if you are turned down? Yes, if you feel that your investments have a significant life insurance function.

The decision maker will have to take into consideration the circumstances in which the investment bonds were purchased.