SIPP for non-earner, and benefits

Stoodles

I'm still looking at opening a SIPP to receive the £720 government contribution.


Looking at the impact on benefits, I have two questions.
1 I see that any pension over £85 per week will reduce my Contributions Based ESA. Does anyone know how that £85 is calculated? Do I actually need to draw on the SIPP weekly, or can it be monthly? What about taking the tax free 25% out as a lump sum - would that be seen as income in one week?



2 My husband will be made redundant next summer. If he can't find another job, how would drawing on my SIPP affect his/our benefits? He will be 64, so isn't optimistic about his prospects.


Thanks for your help.

xylophone

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

He will be 64, so isn't optimistic about his prospects.

He will have a redundancy payment to cushion the blow?

Does he have a pension he can access?

His state pension will not be too far away - have you both checked your state pension position?

https://www.gov.uk/check-state-pension

Stoodles

Anyone?


It looks to me as though I could end up worse off, if SIPP monthly drawings were treated as occurring in one week of each month.
ie
Do nothing, 1 year ESA=5759. plus the use of 2880=8639



OR put £2880 into SIPP, have 720 added =3600
draw over 12 months = 300pcm
Deduction in week of drawing = (300-85)/2=107.50
so total ESA over year = 4469 plus 3600 drawn =8069

mark55man

I think you should ask this question on the benefits board. Most people on this board are much more familar with the inticacies of pension regulation not benefit regulation

Both have been changed beyond recognition, but changes to benefits tends to be here and now, whereas changes to pensions can have an impact 40 years down the line

Stoodles

Yes. I did wonder if it was in the wrong place. But then I thought I'd have to explain the SIPP manoeuvre there, and I'm not sure I understand it properly yet.

mark55man

Good point - you might try though - it could be educational both ways round

Stoodles

For anyone else who needs this answered in future, the wise people on the Benefits board knew straight away,

https://forums.moneysavingexpert.com/discussion/comment/74970309#Comment_74970309

mark55man

wow they know their cookies!!

Alice_Holt

Re: Your husband.

He may be able to claim contribution-based (or 'New style') JSA for 6 months.

Are you in receipt of PIP? If so Carers Allowance may be a possibility.

Look at:
https://www.citizensadvice.org.uk/benefits/