State Pension if disabled person never worked?

sammyjammy

bostonerimus said:

It's great that you can now build up NI in ways other than PAYE employment. 

Its not new, its always (in the modern day!)  been the case that NI credits are given for out of work benefits.

SomeMadeUpName

kaMelo said:

SomeMadeUpName said:

Good points in the two posts above, I hadn't considered the effects of having 'too much' savings.  What a messed up system we really have.

I'm sure we'd all like to save up to spend on nice things whilst the taxpayers funded our day to day living expenses, unfortunately that's not how it works. Those with the means should support themselves  and the state helps those who can't do so, How is that a messed up system?

The point is that if she spends through her income (which is coming from the state) she is fine, if instead she tries to be prudent and save some for future use then she could be penalised by building up too  much asset.  So best that she does just spend it all on nice things.

I agree with you though about self reliance, and I see the need for means tested benefits, but sometimes they do have unintended consequences.

Plasticman

I've just raised a similar question on the "Benefits" board so thanks for the information. I didn't realise that a non-earner can contribute £2880 per year into a private pension and still get tax relief. Does that also mean that family members could potentially contribute to the pension for their disabled child? 

NedS

Plasticman said:

Does that also mean that family members could potentially contribute to the pension for their disabled child? 

Yes, a child is treated no differently. They can have a junior SIPP into which £2880 net / £3600 gross can be paid each tax year. Control of the SIPP will automatically pass to the child at 18 years of age but they will not be able to access the funds until aged 55, shortly rising to 57 and probably higher by the time they get there!

If you can afford to do it, putting £3600 into a child SIPP annually for 18 years, at 5% return would give your 18 year old a pot of just over £100K, which over the next 50 years would increase to £1.27 million at state retirement age even if no more were ever added to it. Not a bad nest egg for your child.