SIPP pension scheme penalised?

Owen_Kric

Hi,

I have not retired and have a Vantage SIPP, UK registered pension scheme, for when I eventually do. I am a low-earner currently so claim Housing Benefit and Council Tax Benefit out of necessity. Couple of days ago I received a council notification that all my benefts had been stopped the previous week, because since I am 57 the council "assumes" I am accessing the pension scheme. They then go on to tell me that they consider the entire fund as 'capital' - pushing me over the 16,000 savings threshold, and cutting my benefits.

In fact I cannot access the fund until I am retired, and someone else told me they shouldn't treat the whole fund as capital anyway, only the accessible part of it. And as I say, I cannot access any of this.

Dreadfully worried :-|

Please advise.

Many thanks,

Owen

[Deleted User]

you need to ask them how they came to this decision,and why they think you will be accessing you pension at the age of 57(although its possible to do so you dont have to),and whilst the pension funds are locked into you pension they cant count the money as capital

Owen_Kric

woodbine wrote: »

you need to ask them how they came to this decision,and why they think you will be accessing you pension at the age of 57(although its possible to do so you dont have to),and whilst the pension funds are locked into you pension they cant count the money as capital

Thanks John,

I got straight back to them on the phone (call centre - couldn't operate their computer properly), email - no acknowledgement, and snail mail - recorded delivery.

All the council letter said was that they assumed they were in the right because they'd 'looked at' the web site for the SIPP Pension Fund. On that casual basis they have stripped me of my benefits. Have been a nervous wreck ever since - and they take a minimum of two weeks to respond to anyone ... unless you actually owe them something of course, then its immediate + yesterday's date on it :-o

Owen

Owen_Kric

Update.

I asked the council to explain why they are viewing my pension fund as capital, since I have not retired and therefore cannot access it? This was the reply:

'Your appeal has been rejected for the following reasons. We have to treat your pension fund as capital as you are at the age when you can retire and have access to these funds. The pension fund website confirms you can normally only access the money from the age of 55.'

I am 57 and have not retired. Are these people then actively trying to harass me into retiring?

Please advise further - what are my rights here?

Many thanks,

Owen

Indie_Kid

Do you have a letter from the company you have SIPP with, explaining that you can't access it now?

Owen_Kric

Indie_Kid wrote: »

Do you have a letter from the company you have SIPP with, explaining that you can't access it now?

Thanks IK,

I just wrote to the company this evening asking them to confirm that very point. I will be sending that to the council when the company get back to me.

Will update.

Thanks again!

Owen

xylophone

According to this http://en.wikipedia.org/wiki/Housing_Benefit as you are "of working age", the relevant legislation is Housing Benefit Regulations 2006. http://www.legislation.gov.uk/uksi/2006/213/pdfs/uksi_20060213_en.pdf

On page 47 of the above

"Notional income

42.—(1) A claimant shall be treated as possessing income of which he has deprived himself for the purpose of securing entitlement to housing benefit or increasing the amount of that benefit.
(2) Except in the case of—
(a) a discretionary trust;
(b) a trust derived from a payment made in consequence of a personal injury;
(c) a personal pension scheme or retirement annuity contract where the claimant is aged under 60;
(d) any sum to which paragraph 45(a) and 46(a) of Schedule 6 (disregard of compensation for personal
injuries which is administered by the Court) refers;
(e) rehabilitation allowance made under section 2 of the 1973 Act;
(f) child tax credit; or
(g) working tax credit,"

And the money in a pension cannot be regarded as capital.

Owen_Kric

xylophone wrote: »

According to this http://en.wikipedia.org/wiki/Housing_Benefit as you are "of working age", the relevant legislation is Housing Benefit Regulations 2006. http://www.legislation.gov.uk/uksi/2006/213/pdfs/uksi_20060213_en.pdf

On page 47 of the above

"Notional income

42.—(1) A claimant shall be treated as possessing income of which he has deprived himself for the purpose of securing entitlement to housing benefit or increasing the amount of that benefit.
(2) Except in the case of—
(a) a discretionary trust;
(b) a trust derived from a payment made in consequence of a personal injury;
(c) a personal pension scheme or retirement annuity contract where the claimant is aged under 60;
(d) any sum to which paragraph 45(a) and 46(a) of Schedule 6 (disregard of compensation for personal
injuries which is administered by the Court) refers;
(e) rehabilitation allowance made under section 2 of the 1973 Act;
(f) child tax credit; or
(g) working tax credit,"

And the money in a pension cannot be regarded as capital.

My goodness - then they are going against their own regulations?!

:-o

Owen_Kric

Hello again,

I'd just like some confirmation I am on the right track please?

Contacted the Pension Scheme and this was their reply (in hard copy):-

'We can confirm that you have not taken any retirement benefits from your pension fund at this stage. Until this decision is made it will not be possible to take any benefits out'.

So it must follow that the fund remains as a pension and cannot be considered as capital? Apparently the pension fund can be accessed after the age of 55 but only if a formal decision is made so to do, and no such decision has been made at any time since the scheme was entered into. The above quoted reply confirms this.

......................................

I am 57. The previous post for Xylophone - 'HB Regulations 2006' - suggests that under the age of 60 a claimant cannot be coerced to draw on a pension fund, is this correct please?

My Housing Benefit & Council Tax Benefit have been stopped since May 12th 2014. Since the pension scheme affirms that I have not accessed my pension fund as capital, presumably the council had and has no right to refuse my claim for local government benefits?

................................

Should I take the pension scheme notification quoted above to the council offices tomorrow, as proof that they have withheld my benefits unfairly and without just cause?

Many thanks -

Owen

zagfles

Do you have income over £12,000? If not there is no way they can treat the SIPP as capital because you can't access it all. All you could do is take an income from it as capped drawdown or buy an annuity, and that would be income not capital, and so covered by the rule xylophone quotes above.

And I very much doubt they could treat the SIPP as capital even if you did have an income over £12k.

xylophone

Are you able to make an appointment with a benefits expert at the CAB?