pension credit query!

Loz01

I'm sorry if this information is obvious or well known but I am not in the know how about pensions unfortunately!! I am asking on behalf of my 65 year old Mum. She claims PIP (for now, just been for an assessment and is waiting to hear back) She currently works 15 hours a week and is wanting to leave/retire due to her bad health since she had a hip replacement go wrong. She earns around £130 a week at the moment at work.

Basically a friend informed her about pension and savings credit. She gets her state pension of £145 a week. She has a private pension pot that she received back in the day when her and my dad divorced. what I am trying to find out is, does this count as savings? I know the cut off for things like this is usually 16 grand and this pension pot she has is more than that.

I believe has just set up a thing with a financial advisor where she can take however much tax free as she is planning on buying her car instead of getting into another 3 year Peugeot deal. But I am not sure about the rest. She doesn't "recieve" it as a private pension, as in she doesn't get a payment into her bank, it's just a lump sum from her divorce.

Thank you for any help!

bigadaj

Might be better asking on the benefits board.

My understanding is that pensions are ignored until you get to the normal scheme retirement age when the pension should be drawn upon, or a sum equivalent would be assumed to be taken and would effectively reduce the benefit by the determined amount.

xylophone

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

Do you mean that when your parents divorced, a lump sum from your father's pension was paid into a pension for her?

She is now planning to take 25% tax free?

She will be expected to use the balance to support herself before claiming any pension credit.

See booklet above for full information.

If you mean that your mother has a lump sum of money in savings, see the booklet above for how savings affect PC.

greenglide

She gets her state pension of £145 a week. She has a private pension pot that she received back in the day when her and my dad divorced. what I am trying to find out is, does this count as savings?

With the minimum income guarantee (or whatever it is called now) for a single person being currently £155.55 (10p below the full nSP amount) there doesnt appear to be much scope for Pension Credit although the other benefits that are triggered with it are generally worthwhile.

sleepless_saver

xylophone wrote: »

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

Do you mean that when your parents divorced, a lump sum from your father's pension was paid into a pension for her?

She is now planning to take 25% tax free?

She will be expected to use the balance to support herself before claiming any pension credit.

See booklet above for full information.

If you mean that your mother has a lump sum of money in savings, see the booklet above for how savings affect PC.

There is no upper capital limit for pension credit so she doesn't have to use her savings before she can apply. Capital below £10000 is ignored completely, above that amount weekly income of £1 per £500 is assumed. That is added on to her other income for the pension credit calculation.

So the lump sum and any other savings may affect her entitlement depending on her other income. As might additional pension if she chose to use the pension that way instead. The thing about guarantee pension credit is that you're either entitled to it or you're not. If you are, even a few pence worth., it brings full entitlement to other useful benefits.

She can use the pension credit calculator to check her entitlement . https://www.gov.uk/pension-credit calculator. Or she can just apply to the Pension Service for pension credit which is very straightforward to do.

sleepless_saver

greenglide wrote: »

With the minimum income guarantee (or whatever it is called now) for a single person being currently £155.55 (10p below the full nSP amount) there doesnt appear to be much scope for Pension Credit although the other benefits that are triggered with it are generally worthwhile.

Depending on what sort of Pip she gets there could be a premium which would increase the amount quite a bit from £155.

xylophone

With the minimum income guarantee (or whatever it is called now) for a single person being currently £155.55 (10p below the full nSP amount)

Not quite - the Guarantee Credit is £155.60 which is 5p below full NSP.

https://www.gov.uk/pension-credit/what-youll-get

xylophone

So the lump sum and any other savings may affect her entitlement depending on her other income.

Explained in Age UK link in post 3 above on P16.

xylophone

Depending on what sort of Pip she gets there could be a premium which would increase the amount quite a bit from £155.

Explained in Age UK link in post 3 above on P6 ff.

"Appropriate minimum guarantee
Your appropriate minimum guarantee is the amount of money the
Government thinks you need to live on each week. It is made up of the
standard minimum guarantee for a single person or couple, plus any
extra amounts you might be entitled to for severe disability, caring
responsibilities, and/or housing costs. The appropriate minimum
guarantee is often referred to as the ‘appropriate amount’. "

The Age UK booklet is very comprehensive.

Loz01

sleepless_saver wrote: »

Depending on what sort of Pip she gets there could be a premium which would increase the amount quite a bit from £155.

At the moment she gets the standard rate for mobility (£21 a week) and the standard rate for daily living (£55.10 a week) but as I said this is under review, she went for her review thing 5 weeks ago so any day now she is expecting a letter, crossing all our fingers it stays the same so she can leave work.

Thank you everyone else for advice, I think I understand it all a bit better now. Appreciate it.