Unexpected Small Pension

dunmoanin

[FONT=&quot]I have just been unexpectedly notified that I have a very small pension due from a past
employer’s pension fund. There is a choice of taking a one-off small lump sum commutation
payment of just over 4000 pounds gross, just over 3500 pounds after tax.
Another option is to take it as a monthly pension, with or without a cash sum.
Either option would only result in a monthly pension between 17 pounds and 25 pounds
per month. My question is, I’m a pensioner living solely on the state pension,
pension credit and housing benefit. Obviously this cash injection is going to affect my
benefits. Any suggestions appreciated.[/FONT]

xylophone

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

Check that you do not overpay tax on the pension, however you take it.

Book an appointment with a benefits adviser through CAB or Age Concern?

dunmoanin

Many thanks, xylophone. You've been most helpful.

atush

If you have a lot of savings already, then the 25/m pension would be the most useful.

Consider it 'fun' money? Holiday money? Have some luxuries you cant afford on the SP money?

dunmoanin

Food for thought, atush, thanks. I need to get my head around it. On doing simple maths, I'd need to live at least 12 more years if I took a monthly pension to equal the one-off payment. A gamble at 71 years old! Another factor creepng in is that on pension SAVINGS credit, I have 3 more years of Assessed Income Period without the need to notify the pension dept of changes to private pensions or investments (if I read the facts correctly) Regarding housing benefit; so long as my savings don't go above the limits there doesn't seem to be a problem there. In other words, by considering it 'fun' money and not letting it hit my bank statements, at first glance, treating it as holiday money seems a way forward.

atush

Well it will hit your bank statements every month it comes in?

And isn't this pension indexed? If so, it will be much less time til break even.