Deferred SP, works pension TFL, and Working tax credits

Oddjob

Hello,
I am after some help please.

I have a previously deferred SP which I have just started claiming. They haven't written to me yet to ask if I want the deferred amount in a lump sum (Old scheme) or added to my weekly amount. I also have an old works pension which I haven't started claiming.
I haven't stopped working and can't see myself stopping for the forseeable future as I like my job and can pick how much I do, I am self employed but have regular work offered. I am probably only expecting to do around 25/30 hours a week maximum in 2017/2018 and will be earning approx £5000 pa, which is less than the £2500 difference from last year. I currently get WTC but this was before I started claiming my pension, I will be getting around £115 a week pension in the new tax year.
I recently phoned them (WTC) to change my working hours from 40 to 20 for a couple of months last year when I was poorly (although I only just rang them as I didn't think it would make a difference as you only need to do 16 if you are over 60), and also told them that my hours went up to 25 from Jan 1st to April. My tax credits were not paid last week, will this just be until they have worked out a new figure or because I have started claiming my SP? The advisor on the phone said she didn't think the changing of the hours for the short period would make much difference.

For this tax year, as I say, I will only be earning around £5000 with hours of 25/30 but the pension of £115 per week unless I defer it again which I believe I can do.
My question is, if I took the deferred pension lump sum, which I believe could be around £7000, and put say £3000 straight into a SIPP, would any of it have to be put down as other earnings on the WTC form and be taken into consideration for the award? The same for the works pension TFLS, would that be taken into consideration as earnings for WTC?
If I take the TFLS from the works pension, I believe I have to then start taking the weekly pension which I believe may be around £70 a week.this no doubt would affect the WTC as that would have to go down as other earnings.
Ideally, I would like to pay off all my debts with the TFLS so I can start with a clean slate going into retiement, just putting the £3000 of the deferred SP into a SIPP for the tax relief.
I really would like to hang onto the WTC if it is at all possible but not sure how they work it out as I know they take working hours into consideration as well as earnings.

I hope you understand this and can advise me what to do.

Thanks

nannytone_2

youcant claim wtc and state pension at the same time

Icequeen99

The deferred state pension lump sum you receive is income for tax credit purposes not capital

Your state pension weekly amount counts as income for tax credits - have you factored that in?

As you say the private pension will also count as income - any lump sum will also be income in the year it is received except for any parts which are tax-free

IQ

Icequeen99

nannytone wrote: »

youcant claim wtc and state pension at the same time

There is no rule preventing this -but the state pension is income for tax credits.

IQ

Oddjob

Icequeen99 wrote: »

The deferred state pension lump sum you receive is income for tax credit purposes not capital

Your state pension weekly amount counts as income for tax credits - have you factored that in?

As you say the private pension will also count as income - any lump sum will also be income in the year it is received except for any parts which are tax-free

IQ

Yes, I knew that the state pension classed as income, but didn't know if the lump sum was, looks like I will need to defer the SP again then, I know I can do that once.
So the TFLS I can get from the works pension would not count as income for WTC?
It seems I would be better claiming the 25% tax free lump sum and taking the residue as weekly pension then, that is also lower than the State pension, so I would need the WTC anyway.

I am awaiting a PIP decision so that will throw more issues into the pot!!

Thanks for your help, much appreciated.

Oddjob

I am entitled to savings credit as the works pension has been left in for over 30 years and I am on the old SP scheme.
When can I claim for that?

Oddjob

From reading other threads on here, I could put say £4000, which is less than my projected earnings this year, into a SIPP as cash, and get tax relief on it of approx £800 and I can draw most of it out once the TR has gone on, tax free I think as long as I kept below my PA? Would that change to income or would it still be tax free and not counted?
I am just wanting to pay off debts but still keep the WTC to live on.

xylophone

https://forums.moneysavingexpert.com/discussion/5620387

The above seems very similar to the situation described in this thread?

Oddjob

Thanks, I'll have a look at that then,

Oddjob

xylophone wrote: »

https://forums.moneysavingexpert.com/discussion/5620387

The above seems very similar to the situation described in this thread?

Thank you xylophone, there is a lot of useful info and links in there, I've just had a quick skim through. I shall study it more in depth.