Joint account and Pension Credit

SimpleMan_2

Hello,

My mother receives Pension Credit which, as you know, is means tested.

I was thinking of adding my name to her bank account to make it a joint account (with her consent, obviously) to make it easier for me to help her paying bills (on-line), etc.

As I understand it this would mean any money in the account is then 'owned' 50/50 by the two of us.

What I want to understand is what effect this would have on her Pension Credit - especially as my personal savings/income is well over any limits.
Would my money in other accounts/investments affect her eligibility for Pension Credit?

Thank you.

Mojisola

SimpleMan wrote: »

My mother receives Pension Credit which, as you know, is means tested.

I was thinking of adding my name to her bank account to make it a joint account (with her consent, obviously) to make it easier for me to help her paying bills (on-line), etc.

As I understand it this would mean any money in the account is then 'owned' 50/50 by the two of us.

What I want to understand is what effect this would have on her Pension Credit - especially as my personal savings/income is well over any limits.
Would my money in other accounts/investments affect her eligibility for Pension Credit?

No, your money would not affect hers but you will be assumed to "own" half of the total so would need to declare it for tax, benefits, etc.

You don't have to make the account a joint one. You can get authorisation to sign cheques for her without you having any claim to the money.

SimpleMan_2

Thanks for the reply.

We're only at the early thinking-about-it stage.

I appreciate it might complicate my tax affairs a little (I'm not on any benefits), but it could also simplify things a little (for example, with inheritance I believe money in joint accounts passes straight to the other account owner when the inevitable happens).

If the money in a joint account is half-owned by each account holder, could this be interpreted (by the powers that be) as a means of reducing the amount of capital my mother has in order to qualify for benefits?

Are there any other pitfalls with going down the joint account route?

Thank you

Mojisola

Yes, it does simplify inheritance. Anything in a joint account automatically belongs to the survivor. The contents of the account would not be part of the deceased's estate.

The LA might consider it to be deprivation of capital and could assess your mother as if all the money was hers but that wouldn't be a problem as you say that you only want to be on the account to make paying bills easier. Keep in your mind that all the money is still hers and will be used for her benefit.

SimpleMan_2

Again, thanks for the reply.

It seems quite straightforward (though I will have to delve into the tax issue a bit more).
I just didn't want to jeopardise/confuse Mum's pension credit just to make paying bills easier.

Thanks again.

tori.k

You don't need to open a joint account, we deal with all the MIL bills just by setting up on-line banking for her. if you want to make it offical a power of attorney notice is just as easy to set up without the tax implications.