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Jsa and pension

edited 30 November -1 at 12:00AM in Benefits & Tax Credits
6 replies 368 views
booblessboobless Forumite
152 posts
edited 30 November -1 at 12:00AM in Benefits & Tax Credits
Hi, not sure i am in the right place 😂

I turned 60 last week and have received some paperwork from a pension i was in, back in the 80’s. I had totally forgotten this. It amounts to £11,000

I am in receipt of income based JSA with SDP and PIP enhanced rate for both parts.

I have no savings or assets apart from my home which is still on mortgage with £10,200 outstanding.

I understand that the benefits may be lost when i take this pension, i was hoping to pay the mortgage off with the pension.

Can anyone tell me whether i will lose all benefits

Thanks
yes you can beat it :j - everyday is a bonus - use it well

Replies

  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
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    Do you mean you have a pension of £11,000.

    Or a pension fund of £11,000?
  • booblessboobless Forumite
    152 posts
    I take it its a pension fund, the forms are asking if i want to have it as a lump sum or invest in another pension plan or it can be a part lump sum and £44 per month

    Its all so confusing 🤪
    yes you can beat it :j - everyday is a bonus - use it well
  • booblessboobless Forumite
    152 posts
    Thank you for the link, it is confusing though, i seem not to qualify for pension credit till i am 65, and it refers you to pension wise but they just told me to ring each separate benefit centre for advice, so i am back to where i started 🤪
    yes you can beat it :j - everyday is a bonus - use it well
  • xylophonexylophone Forumite
    36.2K posts
    Part of the Furniture 10,000 Posts Name Dropper
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    I take it its a pension fund, the forms are asking if i want to have it as a lump sum or invest in another pension plan or it can be a part lump sum and £44 per month

    I am assuming that this is a DC pension and that you are being offered trivial commutation/25% PCLS and small annuity/transfer to another pension arrangement?

    As far as I can see, as you are under PC age, you do not have to access the pension and if you don't, then it will not be taken into account in respect of your means tested benefit (JSA Inc).

    If you do access the pension, then taken in full presumably it will be capital and if as PCLS/annuity as capital and income?

    I imagine that you would then need to have regard to the capital and income rules with respect to the MTB.

    It might be possible to transfer to a pension arrangement offering drawdown - this would enable you to take the PCLS and enough extra to stay under the £6000 which is a key figure as I understand it?

    Perhaps the rest could be taken as capital in the following tax year?

    But I am no authority in this area - perhaps one of the very knowledgeable posters will comment.
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • edited 14 January at 7:53PM
    calcotticalcotti Forumite
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    edited 14 January at 7:53PM
    You will not qualify for Pension Credit until you reach State Pension age which I would expect to be on your 66th birthday. https://www.gov.uk/state-pension-age

    As regards JSA any regular pension income will be deducted from your weekly JSA so you will be no better off financially.

    If you take a lump sum this will be treated as capital. The first £6,000 will be ignored (assuming you don’t already have any savings). Above this your JSA will be reduced by £1/week for every £250, or part thereof. So if you have £11,000 there will be a reduction of £20/week.

    You can if you wish, provided the scheme rules allow, simply leave the pension alone and instead claim it later.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
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