Maximising State Pension

kazza106

My mother has recently received a pension forecast showing that she will receive £139 per week when she retires (later this year). This is made up of State Pension and S2P pension. We expect this to be topped up to approx £142 by the gvmt.
She had been considering deferring for about a year or two to increase the pension income, but has just realised that on the basis of what she will be earning from State Pension, she should be entitled to Council Tax Benefit (as she is eligible for a small top-up of approx £3 per week to bring her up to the minimum guaranteed income level.)
I therefore have the following questions:
1. Is it worth her continuing to work and deferring her pension for a year or two? (This would likely take her pension income above the minimum guarunteed amount.)
2. If she did, would she lose the council tax benefit and so end up no better off?
3. Alternatively, is it worth her taking her pension and continuing to do a few shifts a week for extra income or would she still lose council tax benefit by doing this?
4. Given that of the £139 state pension she is entitled too, approx £30 is from her S2P pension, is she entitled to any Savings Credit when she turns 65?
Note: She has no savings but does have a few pension amounts that she can take as lump sums for about approx £2.5k (current employment) and £4k (she was contracted out for about 2 years sometime in the past until she was told to contract back in). Her work is part time and just a little above minimum wage.
Any advise that you can provide to help her maximise her pension income when the time comes would be much appreciated.
K.

Jaycee_Dove

I understand from what I was told when enquiring last week that if you defer and receive your extra money as an add on to your weekly pension this weekly sum IS taken into account in determing things like housing benefit. If it takes you over the limit you lose out. But if you take the money as a lump sum this is not the case.

An odd anomaly that I do not get really, but might be why the lump sum option is being removed with deferral under the post 2017 system.

anmarj

kazza106 wrote: »

My mother has recently received a pension forecast showing that she will receive £139 per week when she retires (later this year). This is made up of State Pension and S2P pension. We expect this to be topped up to approx £142 by the gvmt.
She had been considering deferring for about a year or two to increase the pension income, but has just realised that on the basis of what she will be earning from State Pension, she should be entitled to Council Tax Benefit (as she is eligible for a small top-up of approx £3 per week to bring her up to the minimum guaranteed income level.)
I therefore have the following questions:
1. Is it worth her continuing to work and deferring her pension for a year or two? (This would likely take her pension income above the minimum guarunteed amount.)
2. If she did, would she lose the council tax benefit and so end up no better off?
3. Alternatively, is it worth her taking her pension and continuing to do a few shifts a week for extra income or would she still lose council tax benefit by doing this?
4. Given that of the £139 state pension she is entitled too, approx £30 is from her S2P pension, is she entitled to any Savings Credit when she turns 65?
Note: She has no savings but does have a few pension amounts that she can take as lump sums for about approx £2.5k (current employment) and £4k (she was contracted out for about 2 years sometime in the past until she was told to contract back in). Her work is part time and just a little above minimum wage.
Any advise that you can provide to help her maximise her pension income when the time comes would be much appreciated.
K.

She would not be allowed to defer if she claims Pension Credit. The income would be taken into account as notional and she would not get any options on State Pension either.

Depending on the level set down at the time then yes she could get some savings credit when she is 65

xylophone

http://www.ageuk.org.uk/money-matters/claiming-benefits/pension-credit/

kazza106

What she had originally intended was to defer her whole pension (state + S2P), carry on working a bit to potentially increase her weekly income to around £150 a week or so. It seems like this may be a bad idea as it takes her above the pension credit threshold and so she would lose out on benefits like council tax.
Even if she defers and takes a lump sum, she will lose out on the council tax benefit for the period she has deferred.
Have I missed anything - is there any way she can benefit from working a bit longer?

Thanks.
K.

kazza106

Oh and if she does get Savings Credit at 65 would this be in addition to the Pension Credit or potentially take her over the Pension Credit threshold, again meaning that she would lose her entitlements to benefits?

It just seems like every option is designed to give to one hand and take from another.

Thanks again.

K.