Appeal to the DWP because of annuity

mum_of_joey

Hallo. I have been on here before regarding an unknown pension that was taken out for me in 1989, after I opted out of SERPS. I had no real understanding at the time of what this meant - I had personal and depression troubles - I just assumed, I guess, but can't really recall if I was told at all, that it would mean me paying less in NI and perhaps not receive so much state pension, but my 60s seemed a long way away nearly 30 years ago and I obviously wasn't advised properly.. I genuinely had no idea that there was a pension being contributed to in the background and I found out by pure accident this year.

I have had 14 different addresses during those 29 years (+ 2 temporary periods with friends in between houses) and I don't recall EVER being sent anything from Aviva about this pension (just under £30,000) until this letter arrived in December last year, which I had put with some junk mail, thinking that was what it was. It was in my previous name also, which I hadn't been since 2005..

Anyway, that's the background. I finally, after taking advice, opted for an annuity and the 25% tax free cash, which I now have, but which is rapidly disappearing (car problems as it is ancient, a personal loan needed to cover those expenses). However, and this was what I had dreaded since I knew about this pension a few months ago, and researched the effect of it on my Guaranteed Pension Credit (which an advisor told me it would affect) is that the DWP would take a large chunk of it back. I wrote a long letter explaining all of the above and then phoned them when I heard nothing after a number of weeks.

The person on the other end, who had my letter in front of her, and which I explained verbally to her, just said to me, 'But you could have taken this out when you were 55 - why didn't you? (I am 67 now.) After a lot of sighing, I tried to keep calm and said, 'Because, as I have just said, and as I have written in the tetter to you, I DIDN'T KNOW ABOUT IT'. I ended up in tears as she obviously hadn't listened to me or read the letter properly. She acted like a robot, and eventually they sent me a form to send to Aviva (from whom I had the pension), to get them to work out how much 'notional capital' I would have received on an annuity over the last 4 years since I have been receiving Guaranteed Pension Credit (since 2014).

I dread the postman arriving, as I have tried to work out how much they will try to take from me. I know that they disregard the first £10,000 but I understand that they take £1 a week for every £500 over £10,000 that you had since 2014, and even if they let me pay monthly, it would take over 4 years ot giving them all my monthly annuity income in order to pay them back. And in the meanwhile, they would have stopped the Guaranteed Pension Credit, which they gave me to bring my income up to a 'liveable' amount. So, in effect, I lose twice. During those 4 years since I have received GPC, I have needed that in order to live. Had I known that there was a nice little nest-egg growing in the background, I would have got that out long before now, believe me. I have horrendous debts (handled under a debt management scheme with StepChange, who pay an amount to my creditors every month and which will take 29 YEARS to clear! High interest credit cards etc, but I wasn't buying designer clothes or anything - most of my clothes and furniture are from charity shops or from the tip.)

It seems to me it's a bit like going for years struggling with money and needing GPC to live and then suddenly finding that the 'worthless' sketch bought from a charity shop 30 years ago was actually worth £30,000! I STILL had to struggle during those years, I STILL needed the GPC and was oblivious of the fact that this sketch was worth a fortune and not just done by someone's grandchild! But suddenly, the DWP caught wind of it and wanted everything they've paid me repaid. And in my case it's worse, as there wasn't even the equivalent of a 'worthless sketch' to be seen!

I want to appeal when what I fear arrives through my letterbox, and I gather that if they still decide to take this notional capital, I understand that I can go to a tribunal, which I would do. Do the DWP ever make exceptions in exceptional circumstances?

I was being treated for depression before all this and my depression has plummeted even more since all this started and have been having counselling. With what is left of my 25% tax-free amount, I wanted to be able to keep some for future car expenses and will obviously have to use to take the place of GPC which I will not get once they have sorted it all out (fair enough). I have been selling my clothes, household goods, furniture etc for months and need my old car to transport stuff to auctions, and sometimes having to transport it all back again if it doesn't sell. I am in a dire financial state with my creditors, and assumed that I could offer a bit more to each of them via StepChange either from the tax free lump or from my annuity income, (Even an extra £5 a month to each of them would halve the amount of time it would take to repay my creditors). If the DWP takes all of my annuity income for over 4 years, and cancels my GPC (they are still paying it while things are sorted but obviously they will want to stop it and have that repaid also), I will actually be in a position where I will have to ask for it again once these few thousand in the tax-free amount have gone to make up my income.

Of course, I can see why I am not entitled to GPC any more, but taking it for 4 years backdated?

I can see why people 'opt out' of life when they have money troubles - it is the most horrendous feeling, knowing that for the rest of your life you are going to feel this bad. My physical health is not good, either, and I have a lot of medication for various health problems as well as the depression.

Also, from what I have read, one in three DWP decisions are incorrect and it doesn't fill me with confidence that this DWP person neither listened to me nor understood what I was saying very clearly in my letter. I actually started to write a letter of complaint about her, but feared that they would 'take it out' on me in some way, while they were considering my case.

Is there a chance that I will come out of all this without being a lot worse off than before I found this 'damned' pension?

xylophone

and eventually they sent me a form to send to Aviva (from whom I had the pension), to get them to work out how much 'notional capital' I would have received on an annuity over the last 4 years since I have been receiving Guaranteed Pension Credit (since 2014).

As Alice suggested in post 5 here

https://forums.moneysavingexpert.com/discussion/comment/74503441#Comment_74503441

The DWP will only go back to your Pension Credit age (not from age 50 or 55) as pmlindyloo suggested.
This is the age at which you are expected to draw on available pensions.

https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits



If you (or your partner) are over the qualifying age for Pension Credit
Once you (or your partner) reach the qualifying age for Pension Credit, you are expected to use your pension or pensions to help support yourself.

If you choose not to buy an annuity after reaching the qualifying age for Pension Credit, an amount of ‘notional’ income will be taken into account when your benefit is worked out. ‘Notional’ income (in this case) is an amount equivalent to the income you would have received if you had bought an annuity.

If you take an income from your pension pot, the amount which will be taken into account when assessing your benefit will be the higher of the actual income or notional income. If you take a cash lump sum, this will be taken into account as capital.

It is your responsibility to tell DWP – and your local council where appropriate – if you or your partner take any money from your pension pot.


Should they not be looking at the value of the pension when you reached Pension Credit age (or when you started to receive PC which is later?) rather than the value at the time when you became aware of the pension (earlier this year)?

It could be assessed either as capital available to you at PC age or as the annuity the money could have purchased?

Even had you accessed the pension in whatever form at that time, would it have ruled out a certain amount of PC?

Have you made an appointment with CAB?

GibbsRule_No3

As a secondary to the Pension problem, I wonder at your age, if Martin would have suggested Bankruptcy, rather than StepChange for 29 years, to pay of the debt, might be worth looking at it even now.

mum_of_joey

Thank you for your answer. They are going back 4 years, when I became eligible for Guaranteed Pension Credit (I was 64-ish) and I see what you are saying (ie that 4 years ago there would have been less capital for them to calculate notional capital from as the amount would have been smaller - ie it has built up to nearly £30,000 over the years (though I don't know what it was worth then as I never got any correspondence!).

I have tried to work it out myself on the 'worst case scenario' - ie that they are working it out on the just under £30,000 figure (less the £10,000 that they ignore). 4 years ago it would no doubt have been a smaller amount but I don't know by how much. That is what they are getting Aviva to tell them, so hopefully it was a great deal smaller amount then!.

Between the date of the letter that I thought was junk mail (7th December 2017) and the date that I opened the letter this year (end of April), Aviva's revised figure, after I phoned them about it all, was different but not THAT different. It had gone down by a matter of £100, but they then based my annuity on the very latest figures (in August, when it had gone back up again) So I don't know if it was worth say, £25,000 when I reached GPC age in 2014, or £28,000, or only £20,000.

Re. your other point, I'm really not sure if I would have been entitled to anything in the way of GPC when the capital was smaller in 2014. I don't know what the figure was then, and presumably as each year passed, the figure will have grown until it get to where it is now.

I think that I may have muddied the waters by saying that the woman from the DWP had demanded to know why I hadn't taken the pension out when I was 55 (nearly 13 years ago)., so they're not going back to that date, only the date that I first started receiving the GPC. She seemed incapable of understanding that I had no idea it existed!

I asked the PensionWise chap that I saw why I suddenly got this letter after all these years, especially with the wrong surname on. He said that probably they had realised that they had had no correspondence regarding the pension in the almost 30 years since it started and that I was now getting nearer the age (75) when I would have to do something with it, so they 'searched' for me. Doesn't explain how they got this address but didn't get the right surname, though. I have only been here about 7 years but I changed my surname 13 years ago. (when I married again, but have been divorced again for ages)

Anyway, thank you for your help.

mum_of_joey

Oh, I forgot to say - I planned to go to the CAB when it was mentioned before, but illness etc put it out of my mind so you have actually reminded me, thank you. My head has been all over the place these past few months.

I am wondering now if it is either better wto wait until I get actual figures from the DWP, and take those along, or, as I understand there may be a waiting time, if I should go along and talk generally about it in order for them to try to ease my mind about a solid 'plan' to appeal. I've no doubt that whatever the DWP sends me isn't going to be welcome news! To have a 'plan' might stop the sick feeling I get every day when I think of it all.

mum_of_joey

Gibbs Rule No3

Thank you for your post.. I have been going over and over in mind about Bankruptcy or an IVA (I don't qualify for a Debt Relief Order). At the moment, the nominal amount that I pay each creditor through StepChange makes me feel that I am 'contributing' until I can see a better way forward, but Bankruptcy will, I understand, clear me of debts after a year, and an IVA after 5 years.

It is something that I think I should discuss with StepChange, but to be honest, and this will sound bad if you are not an animal lover, I have three cats, who I have had since my mother died 7 years ago - they were all strays and came to me and stayed within a few weeks of her death,and have been such a comfort to me in some pretty bad times that I cannot let them go. I feel that I would not have got through a lot of trials if I didn't have them to care for.

Cats cost money, I know, and the more I spend on their food, the less I spend on mine and I don't go anywhere much. My fear is that by going through bankruptcy, every penny that I spend will be open to scrutiny and that the first thing that will be said would be 'Get rid of the cats.' Even my first ex-husband said that to me when I went into the debt management programme (he's an accountant and now I know why I divorced him)

But I do need to learn more about it and discuss things. Perhaps when I go to the CAB re. the DWP thing, they could tell me more about what to expect.

Thank you, though..