Why has my Pension Credit gone down?

Pollycat

Gardenut wrote: »

Thank you so much Hugheskevi for such a comprehensive explanation. I haven't got my head round it all yet but I will. Yes, I receive Council Tax Benefit but I still have my mortgage to pay (albeit interest only). I know I have to make the best of what I get and I can't change it so I just have to get on with it I suppose. Thanks again to everyone.

You may be eligible for this benefit:
https://www.gov.uk/support-for-mortgage-interest

If you’re a homeowner getting certain income related benefits you might be able to get help towards interest payments on:

• your mortgage
• loans you’ve taken out for certain repairs and improvements to your home

This help is paid as part of your benefit and is called Support for Mortgage Interest (SMI).
SMI is normally paid direct to your lender. You can’t get help towards the amount you borrowed - only the interest.

margaretclare

bigfreddiel wrote: »

I guess the fact your only income is from the state is down to yourself. Did no one advise you to start your own pension when you were working?

I teach apprentices and I always yell them to start a pension of their own, even if they only pay in £20 or £30/ month. Something I wish I had been told when I was18!
Cheers fj

Yes, yes, yes! I couldn't agree more!

When my late daughter (1963-2002) started her first proper job, that was the first thing she did - to enrol in the pension scheme. And the last job she had was in local government - she joined that scheme on day one. She died 6 weeks later and her widower was paid 3 months of her full salary. Because her mortgage was insured, that was also paid off.

Isn't it hard, though, to get through to the young, the apprentices? There are so many other expensive things that they need, must have, etc. Even nursery school toddlers have to have their own tablet, or so I'm told.

I don't think it's ever too early, or too late, to save.

xylophone

I still have my mortgage to pay (albeit interest only).

From Age Concern Pension Credit booklet (very comprehensive) cited in my post

"3 Housing costs
If you own your home and you have a mortgage, home loan, or other
housing-related charges to pay, your appropriate minimum guarantee may
include extra amounts for housing costs. If other adults live with you and your
partner, they may be expected to contribute towards the housing costs and
deductions from your benefit may be made. If you own the property jointly
with someone other than your partner, you may only get help with your share
of the costs. "

jamesd

Gardenut wrote: »

Thank you so much Hugheskevi for such a comprehensive explanation. I haven't got my head round it all yet but I will. Yes, I receive Council Tax Benefit but I still have my mortgage to pay (albeit interest only). I know I have to make the best of what I get and I can't change it so I just have to get on with it I suppose. Thanks again to everyone.

It might, or might not, be useful to consider downsizing or relocating to a different, cheaper, area or using equity release. We don't know enough about the value of the property, outstanding mortgage and the rest of your situation to know.

At the moment you're partly relying on the means tested benefits that society pays to those who haven't made enough provision for themselves. Naturally those are restricted to something close to the minimum that society thinks is necessary, else those who do provide sufficiently for themselves would end up disadvantaged compared to those who don't.

Sadly you did have ample time to substantially improve your position had you not been told by that IFA that there wasn't enough time.

dunstonh

Gardenut wrote: »

P.S. I've never earned enough to be able to pay for a personal pension. When I was 50 a pension advisor came to my place of work but because of my age he advised me that there would not be enough time to accumulate enough for a pension. As it turned out I worked till I was 67 so things may have been different if I had not taken his advice.

There needs to be context on that.

At 50, you are not going to accumulate a pot of significance unless you contribute to it significantly. However, if you put 1p away then that is still 1p more than nothing. So, anything you put aside for a period is better than nothing.

That said, this was 17 or more years ago. So, you are looking back at the days where small amounts were effectively penalised and doing nothing could be better. It was only when it changed to remove that daft issue that it would be been better to pay in (even small amounts)

Advice is always a snapshot of your current situation and current rules/legislation and future known events. You cannot rely on advice issued many years earlier to still be the case a things change so quickly.

xylophone

It is possible that the Adviser took the view that any private pension would be just enough to prevent your receiving means tested benefits ( which often include contributions to housing costs etc) so would leave you worse off overall?

dunstonh

xylophone wrote: »

It is possible that the Adviser took the view that any private pension would be just enough to prevent your receiving means tested benefits ( which often include contributions to housing costs etc) so would leave you worse off overall?

That was what I was suggesting. Back in the 90s, we used to have to do a calculation to work out if the person was above or below the MIG limits based on assumptions. If the person was below, you wouldnt do the pension. £30pm for a 20 year old would have been above the limit but £30pm for a £50 year old with no previous provision would almost certainly have been below and best not doing.

thor

dunstonh wrote: »

£30pm for a 20 year old would have been above the limit but £30pm for a £50 year old with no previous provision would almost certainly have been below and best not doing.

Could you expalin that with a bit more detail please. I am interested to find out why. Is it due to tax implications for example?

dunstonh

thor wrote: »

Could you expalin that with a bit more detail please. I am interested to find out why. Is it due to tax implications for example?

Look at the excellent post #15 from hugheskevi. it explains the issues.

However, in very basic summary, the Minimum Income guarantee has a £1 for £1 reduction. So, if you in a band where you qualified for MIG, then any personal provision reduced MIG pound for pound. So, there was no point putting late starters looking at small contributions into a pension.

When MIG was replaced with a fairer system that did not reduce pound for pound then the situation changed and it encouraged people to save for retirement again.

Still today, you come across people who think doing nothing for retirement is the right thing as they are thinking back to the old MIG days and havent realised that they are wrong thinking that.

Malthusian

dunstonh wrote:

Still today, you come across people who think doing nothing for retirement is the right thing as they are thinking back to the old MIG days and havent realised that they are wrong thinking that.

Or they are thinking forward to the point when means testing will be re-introduced.