Universal Credit 16k+ savings transistional protection?

Morglin

zagfles wrote: »

URL? Don't bother with anything in rags like the Mirror

Have avoided dustbin rags, such as Mirror, Sun and Daily Mail:

"At the moment the DWP are planning to run a pilot in Ashton-Under-Lyne from Monday April 29th. Anyone who claims Jobseekers Allowance will claim UC instead which sounds fairly straight forward but isn't. To be able to claim Universal Credit you must fit certain criteria as the Department for Work and Pensions (DWP) are only taking simple claims to start with. You must be unemployed, seeking work, and be single; you must be between the ages of 18 and 60 years and six months old, have savings of less than £6,000 and not be in exempt accommodation. The full list can be found on the DWP website."

http://www.narcolepsy.org.uk/benefits/universal-credit

"The project has been delayed by inter-departmental friction between the DWP and the Cabinet Office, which has an overseeing role and did initial work on the scheme, according to the Guardian.
The DWP, led by Iain Duncan Smith (above) is at loggerheads with the Cabinet Office led by Francis Maude (below) over the scheme, which is now causing “high-level” risks to the delivery of the project, according to a leaked document seen by the Guardian.
The meeting minutes say the Cabinet Office has withdrawn its elite team of IT experts (the government digital service or GDS) from the project early, leaving the DWP “urgently searching for new IT specialists to keep the complex software project on track.”
As well as increasing costs, the inter-departmental conflict has brought a “significant risk of delay” to the completion of the final universal credit design according to an unnamed project insider quoted by the paper: ”You are losing … people who are in on the ground floor, certainly immersed in universal credit policy and design plans. Now they are going to have to bring people up to speed and probably have to pay top dollar for them because they are going to have to be cutting-edge digital experts.”

http://www.techweekeurope.co.uk/news/dwp-denies-universal-credit-trouble-135360


"Ministers have been warned that many of the Government’s flagship reforms including the universal credit welfare system, the High Speed rail two train link and the replacement of Britain’s aircraft carriers are “unachievable” or “in doubt”.

A Whitehall audit released last night discloses that officials have warned that billions of pounds of public money is in jeopardy because of the poorly-managed reforms.
The publication of the report from the Major Projects Authority - on the eve of a Bank Holiday weekend when MPs have started a long holiday - sparked accusations of “burying bad news” as the audit paints a damning picture of the Coalition’s competency.

The Major Projects Authority was founded in 2010 with a mandate from David Cameron to turn around the Civil Service’s record of delivering projects.

Its report uses by a traffic light system to rate the risk of delivery of every one of the Coalition’s 191 spending projects, which are so large that they provide Treasury approval

Of the 191 schemes, 32 are defined as either “red” or “amber/red”. which means that they are unachievable or in doubt.

Red means that “successful delivery of the project appears to be unachievable”, with “major issues on project definition, schedule, budget, quality and/or benefits delivery which at this stage do not appear to be manageable or resolvable”.
A red classification also means that the “project may need re-scoping and/or its overall viability reassessed”.

http://www.telegraph.co.uk/news/politics/10079716/Major-Coalition-projects-like-aircraft-carriers-welfare-reforms-and-broadband-roll-out-questioned-by-official-Whitehall-report.html

"The government's flagship programme to shake up the benefits system is facing fresh problems in a battle between two departments at the heart of the scheme, documents leaked to the Guardian show.
Friction between Iain Duncan Smith's Department for Work and Pensions (DWP) and the Cabinet Office overseen by Francis Maude is now causing "high-level" risks to the delivery of the project, according to minutes of a Whitehall meeting.
Maude's department, minutes of the government's universal credit board confirm, has also accelerated the pullout of its elite team of IT experts from the project after what sources describe as serious tensions over the progress of the £2.4bn overhaul.
The DWP is now urgently searching for new IT specialists to keep the complex software project on track. As a result, future implementation of universal credit could now face delays and increased costs because of the pullout, senior civil servants have been told, according to the minutes.
One project insider, who did not want to be named, said the interdepartmental conflict had brought a "significant risk of delay" to the completion of the final universal credit design. "You are losing … people who are in on the ground floor, certainly immersed in universal credit policy and design plans. Now they are going to have to bring people up to speed and probably have to pay top dollar for them because they are going to have to be cutting-edge digital experts."

http://www.theguardian.com/society/2014/jan/07/benefits-scheme-universal-credit-delays



Lin

zagfles

Morglin wrote: »

Have avoided dustbin rags, such as Mirror, Sun and Daily Mail:

"At the moment the DWP are planning to run a pilot in Ashton-Under-Lyne from Monday April 29th. Anyone who claims Jobseekers Allowance will claim UC instead which sounds fairly straight forward but isn't. To be able to claim Universal Credit you must fit certain criteria as the Department for Work and Pensions (DWP) are only taking simple claims to start with. You must be unemployed, seeking work, and be single; you must be between the ages of 18 and 60 years and six months old, have savings of less than £6,000 and not be in exempt accommodation. The full list can be found on the DWP website."

http://www.narcolepsy.org.uk/benefits/universal-credit

"The project has been delayed by inter-departmental friction between the DWP and the Cabinet Office, which has an overseeing role and did initial work on the scheme, according to the Guardian.
The DWP, led by Iain Duncan Smith (above) is at loggerheads with the Cabinet Office led by Francis Maude (below) over the scheme, which is now causing “high-level” risks to the delivery of the project, according to a leaked document seen by the Guardian.
The meeting minutes say the Cabinet Office has withdrawn its elite team of IT experts (the government digital service or GDS) from the project early, leaving the DWP “urgently searching for new IT specialists to keep the complex software project on track.”
As well as increasing costs, the inter-departmental conflict has brought a “significant risk of delay” to the completion of the final universal credit design according to an unnamed project insider quoted by the paper: ”You are losing … people who are in on the ground floor, certainly immersed in universal credit policy and design plans. Now they are going to have to bring people up to speed and probably have to pay top dollar for them because they are going to have to be cutting-edge digital experts.”

http://www.techweekeurope.co.uk/news/dwp-denies-universal-credit-trouble-135360


"Ministers have been warned that many of the Government’s flagship reforms including the universal credit welfare system, the High Speed rail two train link and the replacement of Britain’s aircraft carriers are “unachievable” or “in doubt”.

A Whitehall audit released last night discloses that officials have warned that billions of pounds of public money is in jeopardy because of the poorly-managed reforms.
The publication of the report from the Major Projects Authority - on the eve of a Bank Holiday weekend when MPs have started a long holiday - sparked accusations of “burying bad news” as the audit paints a damning picture of the Coalition’s competency.

The Major Projects Authority was founded in 2010 with a mandate from David Cameron to turn around the Civil Service’s record of delivering projects.

Its report uses by a traffic light system to rate the risk of delivery of every one of the Coalition’s 191 spending projects, which are so large that they provide Treasury approval

Of the 191 schemes, 32 are defined as either “red” or “amber/red”. which means that they are unachievable or in doubt.

Red means that “successful delivery of the project appears to be unachievable”, with “major issues on project definition, schedule, budget, quality and/or benefits delivery which at this stage do not appear to be manageable or resolvable”.
A red classification also means that the “project may need re-scoping and/or its overall viability reassessed”.

http://www.telegraph.co.uk/news/politics/10079716/Major-Coalition-projects-like-aircraft-carriers-welfare-reforms-and-broadband-roll-out-questioned-by-official-Whitehall-report.html

"The government's flagship programme to shake up the benefits system is facing fresh problems in a battle between two departments at the heart of the scheme, documents leaked to the Guardian show.
Friction between Iain Duncan Smith's Department for Work and Pensions (DWP) and the Cabinet Office overseen by Francis Maude is now causing "high-level" risks to the delivery of the project, according to minutes of a Whitehall meeting.
Maude's department, minutes of the government's universal credit board confirm, has also accelerated the pullout of its elite team of IT experts from the project after what sources describe as serious tensions over the progress of the £2.4bn overhaul.
The DWP is now urgently searching for new IT specialists to keep the complex software project on track. As a result, future implementation of universal credit could now face delays and increased costs because of the pullout, senior civil servants have been told, according to the minutes.
One project insider, who did not want to be named, said the interdepartmental conflict had brought a "significant risk of delay" to the completion of the final universal credit design. "You are losing … people who are in on the ground floor, certainly immersed in universal credit policy and design plans. Now they are going to have to bring people up to speed and probably have to pay top dollar for them because they are going to have to be cutting-edge digital experts."

http://www.theguardian.com/society/2014/jan/07/benefits-scheme-universal-credit-delays



Lin

So basically everything we know, it's going to be late and over-budget, pretty much like every govt IT project. But no indication it'll be abandoned.

leveller2911

MissMoneypenny wrote: »

If you were hoping all the benefits would go back to the overly generous sysyem we have seen in the last few years, then that isn't going to happen. Labour not only voted in these Universal Credit and other welfare changes, it was Labour that brought in ATOS.

Labour realised their mistake when in government, as they had allowed the welfare bill to exceed the amount received in income tax; for the first time ever. The welfare state is on it's knees.

OP, if you think you will continue to need income based benefits, put your savings for your pension in a pension.

I agree with your post with the exception of the final sentance.

Pension schemes are not fit for pupose. Its all very well saying put the money into a pension scheme but when the OP decides to retire they either have to purchase an annuity rates have dropped around 70% over the last 10 years. So anyone with a pension pot of £100k and puchased an annuity would need to live until they are 94 years old before they receive any more money than they had paid into their own pension pot.


The second choice is "draw down" and for that the OP would need to employ a financial advisor every couple of years to advise them on which investment vehicles to put their pension pot into.

I really don't see anthing wrong with people putting their savings into ISA's etc and as they have worked hard,saved the money it should not be taken into account when claiming benefits.

If someone receives money from an inheritance whilst on benefits they can buy a house with the money and continue to receive benefits .

Governments say we should make provision for our old age and yet when we do they will do their best to claw it back.

zagfles

leveller2911 wrote: »

I agree with your post with the exception of the final sentance.

Pension schemes are not fit for pupose. Its all very well saying put the money into a pension scheme but when the OP decides to retire they either have to purchase an annuity rates have dropped around 70% over the last 10 years. So anyone with a pension pot of £100k and puchased an annuity would need to live until they are 94 years old before they receive any more money than they had paid into their own pension pot.


The second choice is "draw down" and for that the OP would need to employ a financial advisor every couple of years to advise them on which investment vehicles to put their pension pot into.

I really don't see anthing wrong with people putting their savings into ISA's etc and as they have worked hard,saved the money it should not be taken into account when claiming benefits.

If someone receives money from an inheritance whilst on benefits they can buy a house with the money and continue to receive benefits .

Governments say we should make provision for our old age and yet when we do they will do their best to claw it back.

Why do you think people need a financial advisor for pension/drawdown investments any more than they need one for ISA investments? If you're capable of controlling your own ISA investment then you should be equally capable of controlling your SIPP investment. In fact using pension/drawdown makes it less likely you'll run out of money since the amount you can take out is limited.

leveller2911

zagfles wrote: »

Why do you think people need a financial advisor for pension/drawdown investments any more than they need one for ISA investments? If you're capable of controlling your own ISA investment then you should be equally capable of controlling your SIPP investment

.


I don't agree.Its easy to take out an ISA (cash or S&S) but drawdown is nowhere near as simple for the average Joe Bloggs.Also consider that during a persons working life they may have paid into a number of Pension Schemes and I know plenty of people who have needed the services of IFA's to sort out investing the pension pots.


Why should a persons life savings that they have worked hard for and saved be any business of the Governments with regards to benefits.

As long as they earned the money legitimately and paid tax on the income they should be free to save the money in whatever savings vehicle they choose without it affecting benefit entitlement. You work hard and pay taxes, you save for your future (which we are constantly told to do by Governments) and if you need to claim benefits your told you have saved too much or you saved the money in the wrong investment vehicle.

Guess we have to agree to disagree on this one.

zagfles

leveller2911 wrote: »

I don't agree.Its easy to take out an ISA (cash or S&S) but drawdown is nowhere near as simple for the average Joe Bloggs.Also consider that during a persons working life they may have paid into a number of Pension Schemes and I know plenty of people who have needed the services of IFA's to sort out investing the pension pots.

Some pension investments are complicated, but with a SIPP you can invest in exactly the same things as you can in an ISA: cash, shares, or funds etc. The differences are the tax treatment and restrictions on withdrawal. These act as a protection for those with a SIPP, so a SIPP is in some ways easier because there are automatic limits and restrictions on access.

The hard parts are what to invest in, asset allocation, how much you need to fund your retirement and how much you can withdraw without depleting the pot too much. But all those apply exactly the same to an ISA as to a SIPP. So if you need an IFA for one you'll need it for the other.

Why should a persons life savings that they have worked hard for and saved be any business of the Governments with regards to benefits.

As long as they earned the money legitimately and paid tax on the income they should be free to save the money in whatever savings vehicle they choose without it affecting benefit entitlement. You work hard and pay taxes, you save for your future (which we are constantly told to do by Governments) and if you need to claim benefits your told you have saved too much or you saved the money in the wrong investment vehicle.

Guess we have to agree to disagree on this one.

Actually I agree with this bit - I hate all forms of means testing, especially capital based means testing.

Pedent

leveller2911 wrote: »

Its all very well saying put the money into a pension scheme but when the OP decides to retire they either have to purchase an annuity rates have dropped around 70% over the last 10 years. So anyone with a pension pot of £100k and puchased an annuity would need to live until they are 94 years old before they receive any more money than they had paid into their own pension pot.

The HL tool suggests that £100k currently buys a 68-year-old a pension of £6k/year.

Thanks to tax relief, a £100k pension pot will cost £80k. But as the OP receives tax credits, and gross pension contributions can be deducted from income for tax credits purposes, they could receive £41k back in increased tax credits (spread over a number of years, obviously). So the cost of the £6k/year pension could be as low as £39k.

That would mean that instead of having to live to 94 to receive more than they had paid in, someone in the OP's position would only have to live to 74.5. 68-year-olds are currently expected to live to between 84 and 87.5.

zagfles

Pedent wrote: »

The HL tool suggests that £100k currently buys a 68-year-old a pension of £6k/year.

Thanks to tax relief, a £100k pension pot will cost £80k. But as the OP receives tax credits, and gross pension contributions can be deducted from income for tax credits purposes, they could receive £41k back in increased tax credits (spread over a number of years, obviously). So the cost of the £6k/year pension could be as low as £39k.

That would mean that instead of having to live to 94 to receive more than they had paid in, someone in the OP's position would only have to live to 74.5. 68-year-olds are currently expected to live to between 84 and 87.5.

Yes, though remember that the pension will be taxable when paid (except for the 25% tax free lump sum).

Pedent

zagfles wrote: »

Yes, though remember that the pension will be taxable when paid (except for the 25% tax free lump sum).

Okay, so let's run the figures again, with a 25% tax free lump sum and income tax on the pension (assuming that the first £2.5k will fall within the Personal Allowance):

£80k paid in buys a £100k pension pot. £41k back in tax credits, plus £25k back as a lump sum gives a final cost of £14k for a remaining pot of £75k. £75k buys a pension of £4500 at 68, or £4100 after tax, meaning that if you live to 71.5 you'll get out more than you paid in.

A reminder of what I was taking issue with:

leveller2911 wrote: »

So anyone with a pension pot of £100k and puchased an annuity would need to live until they are 94 years old before they receive any more money than they had paid into their own pension pot.

And all of this assumes zero growth.

zagfles

Pedent wrote: »

Okay, so let's run the figures again, with a 25% tax free lump sum and income tax on the pension (assuming that the first £2.5k will fall within the Personal Allowance):

£80k paid in buys a £100k pension pot. £41k back in tax credits, plus £25k back as a lump sum gives a final cost of £14k for a remaining pot of £75k. £75k buys a pension of £4500 at 68, or £4100 after tax, meaning that if you live to 71.5 you'll get out more than you paid in.

A reminder of what I was taking issue with:



And all of this assumes zero growth.

Yup - I agree with you I was just pointing out you need to account for tax. And yes with the return of the TFLS you get actually get your money back sooner than in the example in your PP.

Also of course money invested in a pension won't count as capital should you need to claim means tested benefits before retirement whereas money in an ISA will.