Pension, HB and CTB advice required

Cg1527

Hello,
I’m looking for a bit of advice please as I’m trying to help my dad out who cannot deal with his own financial affairs (currently looking into power of attorney).

My dad has been on ESA since having to leave paid employment due to health issues. He was originally on ESA(C) but is now on ESA(IR) with his state pension due to start on 06/09/2019.

His current entitlement is forecast to be £166.73 per week.

He lives in social housing - £393 per month as it is part sheltered housing. He currently receives full HB and CTB.

He very recently found out he had a private pension he saved for many moons ago that he had completely forgotten about (part of his ongoing medical issues). The pot is around £75000.

This seemed like a nice bonus for him to live a little more comfortably each month however it now seems he will have to pay his rent and council tax in full as he won’t qualify for pension credit savings credit if my calculations are correct. In fact, all his state pension will pay for would basically be his rent and council tax and he would only have his private pension left to survive on (he was originally thinking of taking out £200 pm to make it last).

This seems terribly unfair when he hasn’t exactly got a huge pot, and will be living on the bread line again on a few years as it’ll all be gone.

We thought he’d have to pay towards rent and council tax and still have a little extra to live a little more comfortably but this doesn’t seem to be the case.

Can anyone advice if the above sounds correct or if I am missing something.

I just want to make sure he lives as comfortably as he can.

Thank you in advance,
Carolyn

Brynsam

Carolyn - try one of the specialist (free) advice agencies such as turn2us.org.uk

Cg1527

I’ve tried to get advice but everyone wants to book him in for an appointment. I’ve done this twice and the first time he missed it (even though I reminded him the night before) and the second time he asked for PPI advice (he got confused with the adverts on tv). He can be very hard work 🙈 I’m finding it hard working full time trying to help him but I think I’ll maybe have to try to book him in again on one of my days off so I can be there.

Thank you,
Carolyn

tacpot12

I used the benefits calculator available at https://www.entitledto.co.uk, and this calculated that he would receive some HB and CTB. This could be a different result to that which you obtained because I entered that he was not receiving ESA - he will no longer receive ESA when he is above his Pension Credit Age.

You can use the benefits calculator at entitledto to juggle the amount he will take out of private pension in order to see what represents the best value for him. Remember that 25% of what he takes out of his personal pension is tax free. The rest is added to his taxed income, e.g. his State Pension, and he will pay income tax if his earnings are above £12,500. So can take upto £425 pcm from his Personal Pension without paying any income tax.

Cg1527

Thank you so much - that calculator is much better than the one I’ve tried before! That’s really good to know about income tax too, I hadn’t even thought about that so thats giving us some figures to consider. I really appreciate your time and advice 😊
Have a nice day, Carolyn

Xbigman

This may be one of those circumstances where it would pay to turn his entire pension pot into an annuity and have a set income. Once the income is known you can claim discounts on Rent and council tax for being on a low income BUT you need to be careful and check the councils rules as individual councils can have widely varying council tax reduction criteria as well as different rules for those past state retirement age.
You need to hunt out a lot of differing information and power of attorney will make life a whole magnitude easier.


Darren

xylophone

As on other board, the OP should read

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.

Alice_Holt

Is he in receipt of DLA / PIP or Attendance Allowance?

If not look at putting in a claim for AA (with the help of Age UK / a local advice agency / CAB).
https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/attendance-allowance/claiming-attendance-allowance/how-to-claim-attendance-allowance/
The DWP could accept you as his appointee for this benefit
https://www.gov.uk/become-appointee-for-someone-claiming-benefits

A successful claim may increase his eligibility for any possible Pension Credit payable (or HB / CTr).

Other benefits calculators:
https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/?gclid=Cj0KCQjwhJrqBRDZARIsALhp1WRjY9G6g2rXQXkiK-k_e0_jgf168J0HRmS-ZzT-m1O8UivYwjbhbYYaAqIOEALw_wcB&gclsrc=aw.ds

https://benefits-calculator.turn2us.org.uk/AboutYou?gclid=Cj0KCQjwhJrqBRDZARIsALhp1WRMFbGZjUJKO533PClhv8SCY2HA6KKCMa7NKi7hTjWApP7PX5gNOHYaAumKEALw_wcB

It may be worth an appointment with Pension Wise (as well as a benefits advice agency):
https://www.pensionwise.gov.uk/en

This will be a useful info source:
https://www.moneyadviceservice.org.uk/en/articles/options-for-using-your-pension-pot

Cg1527

Thank you Darren, I’ve done a little research so far regarding what you were saying and that’s given me a new line of enquiry as it sounds like a good option for my dad. I’ve ran his figures through and it seems he could get an annuity of £3000 so that would work well for him. I’m going to call his private pension company (with him) and look at his options for this.

Thank you too Alice for the info, he doesn’t currently get any additional benefits on top of his ESA but after reading your link I do feel he should qualify for Attendance Allowance right now. His memory and confusion prevent him from making any serious decisions - even if I spend hours going over something, writing it all down, I can guarantee it’ll be lost by the following day and he’ll be back panicking over the same thing. I currently deal with everything bill wise/financial as far as I can so something official in place would help a lot.

Thank you again for your replies, I feel like I know where we stand much better now ��

Carolyn

xylophone

His memory and confusion prevent him from making any serious decisions - even if I spend hours going over something,

Does your father have capacity to grant PoA?

If so, best to get on with it as soon as possible.

The Deputyship route is expensive and time consuming.

xylophone

I'm going to call his private pension company (with him) and look at his options for this.

Check whether the policy has a Guaranteed Annuity Rate - some old policies do and it can be far higher than anything currently offered.

Otherwise, remember to get quotes from other annuity providers for purposes of comparison.

In view of your father's poor health, he may qualify for an enhanced annuity.