Pension income outside of tax/means test

Teeonethousand

Hi All - new the forum though been reading for some time and would love your opinions on my concern.

I do wonder if i need to plan to have some financial assets that do not count as income that i can use when i retire. I am 58 and am pretty concerned that by the time i get my OAP that it could be further means tested as could the additional benefits ie fuel/bus etc. I have various pension pots, not enough yet but probably enough to be the 'squeezed middle' of the pension world.

So, are Classic Cars, gold bars, paintings, watches, cash under mattress etc the kind of thing people like me should think about so that we have something that does not register on a means test but that can be progressively cashed in?

Debt_Free_Chick

State pensions are not means-tested. There is a top-up which is means-tested, but only at a basic level (Pension Credit).

With means-tested benefits from the State generally, there is often an asset test as well as an income test. This means that those with low income and lots saved away still get caught out and don't qualify for some/all of the means-tested benefit. Pension credit is a good example, so if you have low pensions but plenty of savings, you don't get the top-up.

The state pension system is due for reform in 2016/17. At that point, Pension Credit is likely to be phased out anyway. But, in short, wealth in any form reduces the likelihood of getting any means-tested state assistance.

kidmugsy

I dare say that most of the commenters here pay tax. You are inviting us to help you defraud us.

Teeonethousand

Hi - thanks for your reply

I do understand that state pension is not means tested - yet - but who knows what might happen 5 or 10 years from now. I certainly do not trust that it will not be when it is my turn.

That was my point about the asset test - do you have to do a whole life possessions inventory - who is to know whether you have 20 rolex watches and sell 1 per quarter or something. Do they means test the value of your car, whether you have an antique to sell - or a few, or a piece of memorabillia?

Do you see what i am getting at :-)

Teeonethousand

No intent to defraud at all - you could say the same about any tax planning. Just sharing thoughts and asking for opinions

Debt_Free_Chick

Teeonethousand wrote: »

Hi - thanks for your reply

I do understand that state pension is not means tested - yet - but who knows what might happen 5 or 10 years from now. I certainly do not trust that it will not be when it is my turn.

That was my point about the asset test - do you have to do a whole life possessions inventory - who is to know whether you have 20 rolex watches and sell 1 per quarter or something. Do they means test the value of your car, whether you have an antique to sell - or a few, or a piece of memorabillia?

Do you see what i am getting at :-)

Usually, you would have to claim any means-tested top-up. To do so, you would have to declare your assets - or, at least, declare that they are less than the means-tested threshold.

In short, you would have to lie about your assets in order to claim a means-tested benefit you are not otherwise entitled to recieve.

Teeonethousand

Debt_Free_Chick wrote: »

Usually, you would have to claim any means-tested top-up. To do so, you would have to declare your assets - or, at least, declare that they are less than the means-tested threshold.

In short, you would have to lie about your assets in order to claim a means-tested benefit you are not otherwise entitled to recieve.

Crystal clear - thank you :-)

Linton

Anything might happen in the future - it depends on how paranoid you are. Anything you hoard could become valueless or valuable under sufficiently exotic conditions.

So you have to make a judgement about which risks you are going to mitigate and which you will accept. The chances of the State Pension being means tested for people in the middle seem pretty remote to me. Or if it happened the situation would be so dire that nothing else would help much either. To base ones investment strategy on such eventualities seems foolish as it would lead to much less than optimal outcomes in the more likely scenarios.

gadgetmind

Linton wrote: »

To base ones investment strategy on such eventualities seems foolish

But to ignore such eventualities also seems foolish. My retirement plans assume zero state pension and zero benefits. I could include these things but what happens then if I don't get them?

bigadaj

Pensioner income seems to be moving towards less means testing rather than more, as to whether this continues there is no guarantee.

The sheer cost of pensioner support means that state provision may well decrease, particularly with the levels fo government debt.

Normal sensible provision by means of pensions and similar savings would be most appropriate for most people, the options suggested here are niche and the sort of thing people would hold a small percentage in unless someone had a specialist interest to a very high risk tolerance, which wouldn't sit with being ina. Position to need means tested benefits.

greenglide

"Classic Cars, gold bars, paintings, watches, cash under mattress" doesnt sound like a brilliant investment in the medium or long time either.

Cars rust unless well maintained which is expensive. Gold, paintings, cash suffer from theft unless you pay for someone to look after them.#

Decent pension arrangements and investments can cover all of the circumstances you are outlining - aim for a pensions / investment strategy which doesnt rely on the State Pension.