Pensions & Pension credit

Steve_xx

My friend will be 65 in November 2015. Under the present pension and pension credit rules he thinks he would only get the pension and not the pension credit because he has too much saved. Yet under the proposed new regime he would get the new flat rate of about £144 per week or whatever it is. So depending on when the new scheme comes in, he may or may not be better off. If it comes in prior to his 65th birthday, he will be ok, but if it should come into force after his 65th birthday there might be a problem.

However, he knows that he can defer taking his pension. He's wondering that if he defers taking his pension until the new flat rate scheme comes into force, would he then be subject to taking his pension under the new flat rate scheme rules, and thereby wouldn't have to worry about his savings, if you understand what I mean?

sangio

Steve_xx wrote: »

My friend will be 65 in November 2015. Under the present pension and pension credit rules he thinks he would only get the pension and not the pension credit because he has too much saved. Yet under the proposed new regime he would get the new flat rate of about £144 per week or whatever it is. So depending on when the new scheme comes in, he may or may not be better off. If it comes in prior to his 65th birthday, he will be ok, but if it should come into force after his 65th birthday there might be a problem.

However, he knows that he can defer taking his pension. He's wondering that if he defers taking his pension until the new flat rate scheme comes into force, would he then be subject to taking his pension under the new flat rate scheme rules, and thereby wouldn't have to worry about his savings, if you understand what I mean?

Under the new scheme Pension Credit is being stopped.
That is why there is a massive increase in the State Pension.

Currently there are many that only get the basic State Pension - £107.45 a week. and can't get Pension Credit due to savings.

Those retiring after 2015 and getting the new pension of £155 a week are going to be nearly £40 a week better off than if you retire just before it comes in - that is just tough!

Deferring it, makes no difference. It will treated as deprivation if he retires before it comes in.

McKneff

Hopefully he will have SP2/Serps to add to his pension.

sangio

McKneff wrote: »

Hopefully he will have SP2/Serps to add to his pension.

Hopefully! Many don't and they just receive the normal pension.

McKneff

sangio wrote: »

Hopefully! Many don't and they just receive the normal pension.

But if they receive the normal pension and have not saved to supplement their retirement they get lots of other supplemenatry help that pensioners who have saved and put into a pension dont. Rent, council tax etc. etc. etc.

sleepless_saver

Steve_xx wrote: »

Under the present pension and pension credit rules he thinks he would only get the pension and not the pension credit because he has too much saved.

He could be wrong about this. The first £10k of savings is ignored and there is no upper capital limit (as there is for working age people). Has he actually checked? - pension credit estimates here.

Steve_xx

sangio wrote: »

Deferring it, makes no difference. It will treated as deprivation if he retires before it comes in.

I understand your comments and would like to ask more about the above bit. You mentioned "deprivation", and I wondered what the term means in this context?

His thinking is that if he delays taking his pension at 65 in November of 2015 (assuming that this new scheme hasn't come in at that point) that if it did then come in in say April 2016 that he could wait until that time before statrting to claim his pension and thus be treated under the new scheme rules.

Steve_xx

sleepless_saver wrote: »

He could be wrong about this. The first £10k of savings is ignored and there is no upper capital limit (as there is for working age people). Has he actually checked? - pension credit estimates here.

Yes I see what you mean. He has a greater amount than 10k saved and I see that he would be treated as having an income of £1 per week for every £500 he has saved over that amount. Under the current scheme, as I read it, he would not be able to get pension credit. But within the new scheme he would get the full flat rate pension which I believe would be about £144 at today's rate.

sleepless_saver

We don't know much yet about the detail of the proposed changes, including how deferrals will be treated. There should be a government white paper soon, but nothing will be set in stone until the legislation is passed at some point in this parliamentary session.

Steve_xx

sleepless_saver wrote: »

We don't know much yet about the detail of the proposed changes, including how deferrals will be treated. There should be a government white paper soon, but nothing will be set in stone until the legislation is passed at some point in this parliamentary session.

Ah right, I see. It will be interesting to see how a deferral would be treated.

As an aside, I was talking to a pensioner from Eire whilst on holiday in Spain at Christmas. I was astonished when he happened to tell me that he and his wife received 230Euros per week each in Irish state pension!

Toneey

I for one do not want the new pension, I did an online pension forcast yesterday and it said at todays rates I would receive a pension of £162.70 per week when I retire in 2015, I would also get Pension Credit for myself and my wife topping it up to £217.90 per week, now under this new pension scheme I will only receive £155 per week and get no Pension Credit for my wife who is 10 years younger than myself and will not be eligable for state Pension until she is 67, thats a financial loss of £62.90 per week. How can people not see that this is a scam so that the government pays less money out to pensioners.