Universal credit and private pension contributions

Ok, I have recently started making the change to UC.

With tax credits, we were able to deduct 100% of our private pension (not attached to earnings) contributions from our salary each year.

I have spoke to UC and apparently only work based pensions are deductable. Yet I have found lots of info that just uses the word 'personal' pension's, which my private pension is!

I just wondered if anyone has successfully managed to get a private pension deducted from their earnings of UC and if so, how???

I would be very grateful, this system is complicated enough, without all this too!

Kind regards
«13456730

Comments

  • huckster
    huckster Posts: 5,214 Forumite
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    The private pension deduction not connected to employers earnings reporting, is not part of the Universal Credit system.

    Your question should really be asked via your local MP.

    Ask them to raise the question with DWP, as to why Universal Credit legislation does not include any consideration of private pension contributions, which are separate to employers earnings reporting.

    Remember that UC is not supposed to mirror the previous benefits systems. Parliament would have made deliberate choices about how UC awards are calculated. Your MP should be able to obtain an official response from DWP. I have written to my MP previously and obtained a response from another Government department about a month later, so you should get a response.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    Advice to Decision Makers
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/767105/admh3.pdf
    H3170 When taking into account employed earnings (and the benefits treated as earnings) in respect of an assessment period, the DM should allow a deduction for
    1. the total relievable pension contributions made in that period......

    H3171 A relievable pension contribution means1 a contribution paid to a registered pension scheme by or on behalf of a member of that scheme. This means that the contribution can be paid by the individual member, who must be a relevant UK individual, or by a third party on behalf of the individual member.

    This suggests that a claimant should be able to have personal pension contributions taken into account.

    Having said that I have no idea how this would be dealt with administratively and can see it being very challenging for DWP to do - especially if people make irregular contributions.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    Have also found this Freedom of Information request which includes a question about how to report pension contributions. https://www.whatdotheyknow.com/request/universal_credit_reporting_of_ca#incoming-1239827

    As far as i can see, the answer is that the information required to answer the question doesn’t exist!
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • calcotti
    calcotti Posts: 15,696 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    OP, I suggest you go back to DWP with evidence of your pension contributions and wrote to them their own guidance that I have referred to at post 3. If they confirm that they cannot take them into account request a Mandatory Reconsideration. If you get nowhere involve your MP as huckster suggests. You may also need to go all the way to an appeal tribunal.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • huckster
    huckster Posts: 5,214 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    "H3171 A relievable pension contribution means1 a contribution paid to a registered pension scheme by or on behalf of a member of that scheme. This means that the contribution can be paid by the individual member, who must be a relevant UK individual, or by a third party on behalf of the individual member."

    But then you have to look at 1 which refers to other legislation and it gets more complicated.

    No current consideration of separate private pension at the moment. Possibly as we are not within transition protection yet. Whether transition protection is offered for managed migration ?
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • calcotti
    calcotti Posts: 15,696 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 15 May 2019 at 8:04AM
    Huckster, have I missed the point? Are you saying that a personal pension is not a registered pension scheme? I thought personal pension schemes had to be registered in order for contributions to attract tax relief. If so surely someone making a contribution is a member of that scheme and would fit the description of someone who should have their contributions taken into account when calculating their UC entitlement.

    https://www.gov.uk/personal-pensions-your-rights
    Check with your provider that your pension scheme is registered with HM Revenue and Customs (HMRC) - if it’s not registered, you won’t get tax relief.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • huckster
    huckster Posts: 5,214 Forumite
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    The honest answer is that I don't know if current legislation allows UC to consider this pension or not. There Is no current process to enable it to be considered, which makes it an academic question. Something for DWP to answer.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • xylophone
    xylophone Posts: 45,573 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    https://www.entitledto.co.uk/help/pension-contributions

    For Universal Credit all one hundred percent of contributions made to a personal or occupational pension are disregarded when calculating income.

    Enter the full amount of any payments and the calculator will automatically work out the disregard.

    Do not include pension contributions made by employers. All employer pension contributions are ignored completely in benefits and should not be included in the amount entered for gross earnings or anywhere else in the calculator.
  • huckster
    huckster Posts: 5,214 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Information online suggests UC should deduct private pensions, but if there is no process for UC to do this and that is what the OP has been told. Plus to my knowledge there is no UC process for this.

    The option to avoid banging ones head against a brick wall, is to raise the question either as a complaint or to DWP via local MP.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • xylophone
    xylophone Posts: 45,573 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Puzzling...

    https://www.publicfinance.co.uk/news/2016/02/universal-credit-will-not-encourage-saving-ifs-warns

    By contrast, pension contributions are treated more favourably under UC than the current tax credit system. Pension contributions are deducted from income in both cases, but the higher taper in Universal Credit means a greater net benefit as a result.

    https://www.linkedin.com/pulse/saving-pension-while-getting-universal-credit-63-subsidy-morgan

    That hasn’t changed, Universal Credit ignores 100% of money paid into a pension scheme when calculating the earnings used in the means test.
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