Do I risk Jeopardising benefits of Pension Credit?

oldfield

I'm 73 with no savings/income and in receipt of Pension Credit, Housing benefit of £165/week and Council tax discount.
The Pension Service have sent me a letter advising that I'm entitled to a Pension for the few years I worked in Local Government about 30 years ago.
Is it to my advantage to claim this pension - at the very most it can't be worth more than £50/week?
I'm afraid it won't give me any financial benefit but may cancel any benefits from the Pension Credit entitlement.
Any advice - or where to go for advice, is welcome
Thanks
Richard

Torry_Quine

If you have a pension or other source of income but don't take it you can be treated as if you have it anyway. You need to get proper advice before deciding.

dunstonh

Is it to my advantage to claim this pension - at the very most it can't be worth more than £50/week?

If you dont, the benefits agency can reduce your benefits on the assumption you are taking the amount in question. So, you may as well take it. Plus, it is never a £1 for £1 adjustment. You will be better off by taking.

andyuk01

dunstonh wrote: »

If you dont, the benefits agency can reduce your benefits on the assumption you are taking the amount in question. So, you may as well take it. Plus, it is never a £1 for £1 adjustment. You will be better off by taking.

Not necessarily, claiming any amount of pension credit, even a penny opens up a whole raft of other benefits automatically

Housing benefit, cold weather payments, free dental work, council tax credits

Whereas if you earn just over the pension credit threshold these become either means tested or not available

It's a crazy system that punishes those who save a little towards retirement - either save a lot or don't bother

seven-day-weekend

As others have said, even if you don't take it, it will be counted in your income for the means test.

IMHO, it's better to pay your own way than rely on Government Benefits that can be removed at any point.

greenglide

If you haven't claimed it yet then, presumably, there will be a tax free lump sum paid as well?

Being age 73 it seems quite likely that you could have left the LGPS in the days when you had no options but to take the pension at age 60 (like I was) and you are not allowed to defer it.

If this is the case then there could be significant arrears due. 13 years????

SallyG

I tried very hard to get my forgotten LGPS pension paid as a lump sum but the GMP rules meant I had to take a sub-£400 a year income which probably costs at least that much to administer.........

Could I ask whether this notional income concept applies to undrawn/partially drawn drawdown pension funds : are they/will they be treated as notional income in the same way - ie as long as you have a drawdown pension fund which could, if drawn down, put you above the means test threshold - no benefits?
At the moment being in capped drawdown limits the drawdown amount - if you stay within capped drawdown after April 2015 - assuming the pension freedoms occur then - will that mean the rest of your drawdown fund is not treated as notional income?
What level of income is the means tested benefit threshold?

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/258148/pc-10s.pdf


"Notional income is income your customer does not actually get but is treated as getting. We may treat them as having notional income when they have:
• not claimed State Pension but are entitled to it
• not taken income available to them under a personal pension plan
or a retirement annuity contract
PC10S – September 2013 24• deferred payments from an occupational pension
• given up their rights to an income (from a trust fund for example)
because they wanted to get Pension Credit, or more Pension Credit
(this does not apply if your customer originally chose to take Extra
State Pension but changed their mind and took a lump-sum instead)"

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS48_Pension_Credit_fcs.pdf?dtrk=true

woolly_wombat

SallyG wrote: »

Could I ask whether this notional income concept applies to undrawn/partially drawn drawdown pension funds : are they/will they be treated as notional income in the same way - ie as long as you have a drawdown pension fund which could, if drawn down, put you above the means test threshold - no benefits?
At the moment being in capped drawdown limits the drawdown amount - if you stay within capped drawdown after April 2015 - assuming the pension freedoms occur then - will that mean the rest of your drawdown fund is not treated as notional income?
What level of income is the means tested benefit threshold?

Interesting question!

WW

oldfield

Thank you very much for all your replies - which are taking some time to read and digest!

I'm fully paid up for the state pension so it's Housing Benefit I am really concerned about hence xylophone's post about 'notional income' is most worrying. My Local Authority will stop payment instantly they are advised of 'change in status' and take many months to re-continue.

It appears from earlier replies my only gain would be any mandatory lump sum but it's possible this would be clawed back?

I'll re-read all your replies over the weekend, make notes and try to decide what to do.

Richard

xylophone

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS48_Pension_Credit_fcs.pdf?dtrk=true

will be worth a read.