Are pensions capital?

FatherAbraham

r_i_c wrote: »

1). Looking into the future though, what happens if you are over (not sure if I would be yet) the limit for JS allowance, can you still be credited with National Insurance contributions please?

One normally gets the NI credits by being available for and looking for work (and showing this by attending regular signing-on meetings at the JobCentre), not for receiving any particular benefit.

For example, after one's six months of contribution-based JSA have expired, one can still obtain weekly NI credits by continuing to sign on.

See https://www.gov.uk/national-insurance-credits/eligibility, which says:

[If] You’re unemployed and looking for work, but not on Jobseeker’s Allowance: Contact your local Jobcentre to claim Class 1 credits

Warmest regards,
FA

jackyann

My sympathies.

Of course you need to deal with the funeral, I hope it goes well, tidy up loose ends, and go along to the Job Centre, both to arrange a return to work, and to get your NI credited.

I would also get in touch with the local branch of the Carers' Association (or similar). They can be a great support in your circumstances, which are not uncommon when someone of working age has been a long term carer.
There are some things you can spend your capital on that may be helpful, and don't count as deprivation - they will usually put you in touch with people who understand the detail of this.

As executor, you can charge reasonable expenses to the estate, so that winding up your mother's affairs shouldn't eat into the money you do have.

I have also known people who found the people who administer teachers' pensions very helpful in difficult circumstances, so I would certainly talk to them if you think you might claim at age 60.
I would also check your total NI contributions so that you are sure of your state pension later.

Good luck

Mojisola

r_i_c wrote: »

The Will has not been read yet btw, nor is that likely for perhaps several months into the future.

xylophone wrote: »

If you are referring to your late mother's will, you previously indicated that you were the executor - is there a reason for the will not being read?

This^

How do you know you are the executor if you haven't read the will?

r_i_c

mania112 wrote: »

in the TPS if you became a member of the scheme pre 2007 your normal retirement age is 60, after 2007 and its 65 (and for new joiners from 2015 it's the same as your state pension age)

Yes, thanks. Found some previous correspondence dating to 2012 and they say "no advantage in deferring claiming your benefits ... due ... pension at age 60." I am 59, the pension won't be great coming in (15 years FT teaching all told) but it will cover some direct debits.

But I still have the SIPP which I don't have to draw till State Retirement age (for me 66 I think?).

Now, I'm told there is a cap on paying into the SIPP for me, about 3k pa? If I have capital over that figure, in respect of probate after it is granted, what is preventing me from opening one or more ISA's please?

Thanks again.

r_i_c

Mojisola wrote: »

This^

How do you know you are the executor if you haven't read the will?

Sorry, I don't mean that, I meant 'read' in the old fashion sense of formally reading the Will - as if probate had been granted and those mentioned in the Will were being read out what was due to them.

I mean probate hasn't been granted yet. I am named as sole executor in the Will, yes; but as son and carer I must see to mum's funeral arrangements before I submit the probate paperwork to our local Registry.

jem16

mania112 wrote: »

(and for new joiners from 2015 it's the same as your state pension age)

The 2015 scheme applies to all members, new or otherwise. The only people it will not apply to is those within 10 years of their NRD as they have protection and will stay on the final salary scheme.

jem16

r_i_c wrote: »

Yes, thanks. Found some previous correspondence dating to 2012 and they say "no advantage in deferring claiming your benefits ... due ... pension at age 60." I am 59, the pension won't be great coming in (15 years FT teaching all told) but it will cover some direct debits.

It will be around £6500pa pension and almost £20k tax-free lump sum.

Sounds like it will cover more than just some direct debits.

r_i_c

jamesd wrote: »

If the money is part of her estate then it will count as capital and you will be treated as still having it and able to obtain around 10% of it as income each year. This is called "notional income".

Thanks again, yes, I've seen that term before.

If instead the money is in a pension pot of hers and you are the beneficiary named for this pension then it is already in the pension and you do not have to take income from it. It also doesn't count as capital. Money in pension pots and from insurance is outside the estate and not governed by a will.

There is no reference in the Will to any specific pension. My mother had her pension plus a half of my father's coming in. I am however named as receiving 'the balance of the estate' which would cover mum's pension - but I assumed the balance only referred to savings (capital) already generated by her pension - not that her (state and professional) pensions would somehow be transferred to me intact?

If you can tell us more about the amounts we can probably tell you how to generate a fair amount of income from it. For the time period until you reach state pension age it probably is possible to take 10% or more of the amount each year as income.

10% of what please? Sorry, I taught art, figures are not my forte, but I can cope when I am set in the right direct.

That might make benefits unnecessary for you. Knowing how much your state pension will be and about any other pensions or savings and investments you have could let us put together a workable financial plan.

In 2012 I had an estimated £59k TPS pa. There is also a tiny amount with the Prudential due to a misunderstanding that the pru was 'backyears', it wasn't. What they got from me - before my father spotted it - came to £6.5k pension pa in 2007. I can write to both Pru and TPS requesting a 2015-16 estimates for retirement age 60, I definitely appear to be in that sixty year age bracket.

Have a SIPP of approx £40k (invested in stocks & shares) which I would presumably transfer to an ISA at state pension age?

Any capital from probate would presumably go to ISAs as well because ... I'd be over the 16k limit for JS allowance between when probate is hopefully granted and the state pension retirement age?

The TPS is particularly interesting as it seems likely that you are in the part of the scheme that has a normal retirement age of 60.

Agree.

That would provide very helpful extra income! Best to ask them to tell you what to expect and confirm that you're in the age 60 group. There's a lump sum option but this is one of the ones where it's a very bad deal to take the lump sum. It's usually cheaper to borrow and repay from higher income than take a lump sum from TPS.

Oh! I thought the lump sum was all part of it, but you are suggesting it's either/or? Then I agree, it's much safer to have a steady amount coming in - those DDs never stop :-o

The reason normal retirement age for the scheme matters is that people taking the pension before NRA have their pension significantly reduced. So a person in the age 65NRA group would get much less pension at age 60 than a person in the age 60 NRA group if they had the same original income level. This is called an actuarial reduction and it's done so that the cost to the pension scheme doesn't increase because of the extra years for which it will pay out beyond those originally planned for. The planning was for 60 or 65 depending on which group you're in.

TPS wrote me in 2012 and the letter appears to confirm I am in the 60 years age bracket for retirement.

Given your time in the TPS it's likely that you have accumulated no more than the basic state pension from the state pension. Maybe not that much, depends on work and child benefit history, if any. The good news there is that you can pay voluntary self-employed NI to increase the amount between April 2016 and your state pension age. It might also pay to buy extra older years before then if you don't have 30 years worth already.

Had no idea you could pay voluntary self-employed NI into a state pension. I don't know how this would be done though? And I certainly didn't know I could continue buying back years at this distance in time from when I stopped being (against my better instincts I might add) a full time teacher - back in 2002.

Thanks again.

r_i_c

jem16 wrote: »

It will be around £6500pa pension and almost £20k tax-free lump sum.

Sounds like it will cover more than just some direct debits.

Thanks, I'm confused again - aren't the lump sum and the regular pension amounts separate please? Sigh, should have been a Maths teacher, too late to retrain now!

jem16

r_i_c wrote: »

Thanks, I'm confused again - aren't the lump sum and the regular pension amounts separate please? Sigh, should have been a Maths teacher, too late to retrain now!

As you are a member of the 1/80ths scheme with a Normal Retirement Age of 60m you will get both the lump sum and the annual pension. The lump sum is automatic and you cannot decide not to take it.

What jamesd was describing is the 1/60ths scheme (post 2007) which does not come with an automatic lump sum and you have to commute some of the pension to get it. This does not apply to you.