pension credit and private pension

fmhoward

Can anybody work this out for me. I am 64 years old and receive pension credit. The amount is £100 because I receive a pension and my wife has her own business.
The question is I have a private pension which is valued at 30k and with the new regs in April I can draw it out.
What should I do. Draw it out in full? or can I draw a smaller amount and have as savings as I do not have any. But will I still be able to claim pension credit.

sleepless_saver

AT 64 you must be very near state pension age, so may not be entitled to pension credit anyway when that kicks in. You would need to tell the Pension Service if you cashed in the pension and it would affect your pension credit. You can work out the figures on the pension credit calculator https://www.gov.uk/pension-credit-calculatorpension-credit-calculator .

jamesd

Using the new rules that apply to pensions from 6 April 2015 you can take any part of it out whenever you like. 25% will be tax free, the rest added to your normal taxable income. Because of this easy access I suggest that you do not cash any amount in unless you have an actual need for the money. But best to use the pension credit calculator.

Pension Credit first ignores the first £10,000 of your savings and investments. For money above that it assumes that you get £1 a week of income for every £500 or part of £500. That is, it assumes that you're making 10.5% interest or similar on your money. However, I don't know what the regulations say about whether you have to declare your pension and what the effect would be.

Here is the correct site for the pension credit calculator, the earlier post repeated part of the URL, breaking it.

sleepless_saver

jamesd wrote: »

Here is the correct site for the pension credit calculator, the earlier post repeated part of the URL, breaking it.

Thanks, that's what I get for trying to use my tablet for fiddly stuff.

WillowCat

fmhoward wrote: »

Can anybody work this out for me. I am 64 years old and receive pension credit. The amount is £100 because I receive a pension and my wife has her own business.
The question is I have a private pension which is valued at 30k and with the new regs in April I can draw it out.
What should I do. Draw it out in full? or can I draw a smaller amount and have as savings as I do not have any. But will I still be able to claim pension credit.

At 64, I would have expected your pension credit to be reduced by the notional income (above the £10,000 capital disregard limit) of your private pension.

Did you declare this pension when you claimed pension credit?

gadgetmind

sleepless_saver wrote: »

AT 64 you must be very near state pension age, so may not be entitled to pension credit anyway when that kicks in.

I know it's entirely my ignorance, but how can someone get pension credit *before* state pension age?

sleepless_saver

gadgetmind wrote: »

I know it's entirely my ignorance, but how can someone get pension credit *before* state pension age?

At the moment, irrespective of whether you are a man or a woman, you can claim pension credit when you reach the state pension age of a woman with the same date of birth.

gadgetmind

How bizarre!

sleepless_saver

It's not unique, the winter fuel allowance works on a similar principle. I guess it's done that way so as not to disadvantage men compared to women. When state pension ages equalise there will be no difference (though come to think of it there won't be pension credit by then either).

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372545/dwp027-102014.pdf

"Pension Credit for couples
If you have a partner, the amount you get depends on your
joint income and capital (including savings and investments).
If only one of you has reached the Pension Credit qualifying
age (see page 4), you can still apply. The person who has
reached the qualifying age must be the one who applies. If
you’ve both reached the qualifying age, either of you can
apply.
Only one of you can get Pension Credit at any one time. It’s
paid for both of you. We can help you decide who should
apply."

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

"If you have a partner, you must declare the income and capital for both of
you, to be taken into account when your benefit is calculated. "


"Deprivation of capital (notional capital)
If you deprive yourself of capital in order to qualify for benefit or to increase
the amount of benefit you get, the Pension Service can treat you as still
having that capital. This is known as notional capital."

"Deprivation of income (notional income)
Sometimes you may be treated as having income that you do not actually
have. This is known as notional income. This might happen if you fail to apply
for income you are entitled to..."

The OP should check his situation with the DWP?

hugheskevi

How bizarre!

Not really, at least not once you consider it from the equality perspective.

AIUI, under European equality rulings, the differential in State Pension ages had to be be corrected, new inequalities cannot be introduced, but there can be reasonable time to correct inequality.

Hence a 25 year period to equalise State Pension age, but introducing new policies with different qualifying ages (albeit linked to State Pension age) would be introducing new age inequalities, and so cannot be done.

So a bizarre outcome perhaps, but for entirely sensible reasons (as most policy outcomes tend to be:D)