state pension lump sum 'Invisible'

mrcharrington

Hi

My mum has deffered her state pension. She is now 65 and looking at drawing it as a lump sum when she finally retires.

This will be a considerable amount (around 20k).

Will this amount be taken into account when being assessed for additional benefits such as pension credit, council tax benefit etc.

Thanks for the help.

dseventy

I cant speak about Pension credit as I don't know muuch about it (someone will be along soon who does), but certainly for other means tested benefits, having over 16K will mean no entitlement. And thats right as why would someone with 16K+ in the bank want state assistance!

D70

Whiteknight

The State Pension lump sum will be disregarded indefinitely when it comes to Pension Credit. If she does decide to claim Pension Credit she would still need to declared her savings and provide evidence but she should mention that she has had a lump sum payment.

mrcharrington

D70

The only reason she has 20k is she did not take her weekly pension at 60. If she had she would have no problem. A little unfair to dupe people into this. Also she has continued to work for an additional 5 years full time paying tax and thereby reducing her burden on the state. So all in I think the state/ tax payer are quids in on this deal if you do the calcs.

Oldernotwiser

mrcharrington wrote: »

D70

The only reason she has 20k is she did not take her weekly pension at 60. If she had she would have no problem. A little unfair to dupe people into this. Also she has continued to work for an additional 5 years full time paying tax and thereby reducing her burden on the state. So all in I think the state/ tax payer are quids in on this deal if you do the calcs.

That doesn't make any sense. She could have worked at the same time as drawing her state pension and just saved it, ending up with a similar amount of savings.

originator

Confuddled was thinking of deferring when I reach pension age, You telling me it's not worth it Older,shall I just draw it?

elmer

A deferred state pension lump sum payment is disregarded from capital for Housing benefit (or LHA) at the moment. Of course the rules are all changing soon.

Elmer

ceecee1

Feel free to correct me if things have changed BUT when I dealt with pensions you didn't get any lump sum for deferring your retirement pension, the years that you deferred just increased the weekly amount that you received.

I never really understood why people chose to do that as they would have received more by taking the state pension and saving it up in an account !

Oldernotwiser

originator wrote: »

Confuddled was thinking of deferring when I reach pension age, You telling me it's not worth it Older,shall I just draw it?

I'm no expert but I believe the interest rate you get by deferring is better than you could get by drawing and saving it. (Or alternatively you can defer and get a higher pension.) There are several threads on this on the pensions board.

Oldernotwiser

ceecee1 wrote: »

Feel free to correct me if things have changed BUT when I dealt with pensions you didn't get any lump sum for deferring your retirement pension, the years that you deferred just increased the weekly amount that you received.

I never really understood why people chose to do that as they would have received more by taking the state pension and saving it up in an account !

You can choose to do either these days. I think that if you live for more than 10 years after drawing your increased deferred pension then you go into profit.

ceecee1

ceecee1 wrote: »

Feel free to correct me

I am corrected !!:T


Changed since 2005 - makes me feel even older