Can I claim Job seekers allowance following VR at 55 if I defer taking my pension?

NedS

itsmeagain said:

Thanks all. So, it appears from what's been said, putting morals & opinions to one side, there's nothing stopping me claiming JSA for up to 6 months.
I have also been recently diagnosed with frozen shoulder. I struggle to drive for any distance, lift, reach up etc. Will this affect anything associated with what I can claim and be an accepted limitation on what jobs I can reasonably be expected to apply for / accept?

You will be required to accept commitments based around the work you are looking for, and what steps you are undertaking to find that work. You will have the opportunity to discuss how any health conditions affect that, but ultimately you must be fit for work otherwise it would be a claim for ESA.

As you have a health condition you will likely be referred to the Work and Health programme aimed at helping to support you into appropriate (for your health condition) work shortly after starting your claim

ussdave

itsmeagain said:

Hi all.

I'm 55, just about to take VR (12 months pay @ circa £60k), with many years paye full NI contributions.
I also have a DB that will pay £28k PA (now if I take it), plus £120k in AVC's (company DC scheme).
I was wondering If I could claim any benefits (such as Job seekers allowance)?
If I am permitted any benefits, does taking or delaying taking my DB or AVC's make any difference to benefit eligibility?

Ignoring the debate about JSA for a moment, do you know if the fact you're taking VR means you can take your DB pension without (or with reduced) early retirement factors?  Sometimes that's the case and if it is it may be worth taking the pension now anyhow.

DairyQueen

Btw...

JSA is a taxable benefit.

maisie_cat

I was in a similar position, having paid tax & NI for decades, but I opted not to claim jobseekers, I didn't want the faff of having to send hundreds of CVs out and if I claimed I would be technically "unemployed" rather than "retired/housewife" which has an effect on things like car insurance etc.
I had the savings so used the time to make our lives a bit more frugal, after decades of senior management stressful full on hours work it was refreshing actually. I didn't need the stress of dealing with the DWP and it would have ruined my run of being the only person in my extended family to have never claimed benefits.

itsmeagain

ussdave said:

itsmeagain said:

Hi all.

I'm 55, just about to take VR (12 months pay @ circa £60k), with many years paye full NI contributions.
I also have a DB that will pay £28k PA (now if I take it), plus £120k in AVC's (company DC scheme).
I was wondering If I could claim any benefits (such as Job seekers allowance)?
If I am permitted any benefits, does taking or delaying taking my DB or AVC's make any difference to benefit eligibility?

Ignoring the debate about JSA for a moment, do you know if the fact you're taking VR means you can take your DB pension without (or with reduced) early retirement factors?  Sometimes that's the case and if it is it may be worth taking the pension now anyhow.

Thanks - isn't that what I said by "I also have a DB that will pay £28k PA (now if I take it)" or do you mean something else? I will be taking my pension soon, probably April 22. I was planning on retiring at the end of this year anyway. Taking VR is a blessing in disguise (worth more than working the next six months pay).

Malthusian

itsmeagain said:

Thanks - isn't that what I said by "I also have a DB that will pay £28k PA (now if I take it)" or do you mean something else?

Your post didn't say whether that £28kpa includes an early retirement penalty or whether that has been waived due to your VR. If voluntary redundancy gives you the opportunity to take it without an early retirement penalty, taking it next year may be worse than taking it now. So it is worth checking.

ussdave

itsmeagain said:

ussdave said:

itsmeagain said:

Hi all.

I'm 55, just about to take VR (12 months pay @ circa £60k), with many years paye full NI contributions.
I also have a DB that will pay £28k PA (now if I take it), plus £120k in AVC's (company DC scheme).
I was wondering If I could claim any benefits (such as Job seekers allowance)?
If I am permitted any benefits, does taking or delaying taking my DB or AVC's make any difference to benefit eligibility?

Ignoring the debate about JSA for a moment, do you know if the fact you're taking VR means you can take your DB pension without (or with reduced) early retirement factors?  Sometimes that's the case and if it is it may be worth taking the pension now anyhow.

Thanks - isn't that what I said by "I also have a DB that will pay £28k PA (now if I take it)" or do you mean something else? I will be taking my pension soon, probably April 22. I was planning on retiring at the end of this year anyway. Taking VR is a blessing in disguise (worth more than working the next six months pay).

I'll give an example which will hopefully make my point more clear.  The numbers will be simplified/made up and won't reflect the real adjustment factors.

Let's say you had a pension that paid £30,000 per year at 60.  For each year early you take it, they reduce the amount by £1,000.  So normally if you took it at 55 your pension would be reduced to £25,000 per year.

With some schemes/employers when you are made redundant you can draw your pension *without* the usual reduction factors being applied *if* you take it at the same time as the redundancy.  In this case you would be made redundant at 55 and immediately draw your normal expected pension amount of £30,000 per year.

In the above example if you held off on drawing the pension for a year and hence didn't draw it as part of your redundancy settlement you would still have early retirement factors applied.  In the example you would be 56 and hence have 4 years of factors applied, leaving you with £26,000 per year.

edit: Worth pointing out that I'm not an expert on this side of things but I believe the above is correct for some schemes.

Sea_Shell

maisie_cat said:

I was in a similar position, having paid tax & NI for decades, but I opted not to claim jobseekers, I didn't want the faff of having to send hundreds of CVs out and if I claimed I would be technically "unemployed" rather than "retired/housewife" which has an effect on things like car insurance etc.
I had the savings so used the time to make our lives a bit more frugal, after decades of senior management stressful full on hours work it was refreshing actually. I didn't need the stress of dealing with the DWP and it would have ruined my run of being the only person in my extended family to have never claimed benefits.

Being "unemployed" is definitely a thing with insurers.   Something that you should be wary of.

By claiming JSA, you are, by definition unemployed, rather than choosing not to work.

itsmeagain

Malthusian said:

itsmeagain said:

Thanks - isn't that what I said by "I also have a DB that will pay £28k PA (now if I take it)" or do you mean something else?

Your post didn't say whether that £28kpa includes an early retirement penalty or whether that has been waived due to your VR. If voluntary redundancy gives you the opportunity to take it without an early retirement penalty, taking it next year may be worse than taking it now. So it is worth checking.

Maybe my comment wasn't explicit. For clarity, I have 39/60 x £60k = £39k (if taken at 65).
With my current early retirement factor applied I would only get £28k PA (if I take it now).
If I wait until April 2022, I will get a slightly improved factor (4-5%) and the RPI increase plus a new tax year.
There is no pension enhancement available for VR at 55, although it is available to over 60's.

mark55man

so have you checked if being VR allows you to take your pension without the factor being applicable? that's not clear, and it would be to your considerable advantage if true - much much more so that JSA.

Thank you for an interesting thread by the way - its unusual in that debates are normally about people trying to retire early and as DQ says benefits are not often mentioned.