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

itsmeagain

ussdave said:

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.

Ok. I won't give you an example, I'll tell you my facts. I have 39/60ths of £60 salary if I defer till 65.
If I take my DB pension now, I'll get £28k PA (about 29% reduced for taking 10 years early) at 55.
There is no early pension 'deal' available to me. The only deal at 55 is enhanced VR.
Employees over 60 can trade in their VR deal for an unreduced pension deal but i'm only 55.

itsmeagain

mark55man said:

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.

I think that you must be joking. I have explained that there is no unreduced pension available to me at 55.

itsmeagain

GazHol said:

Another benefit of JSA is that you get NI credits, so as others have said, check you NI record and state pension forecast.
when you sign up for JSA, you do have the option of NI contributions only, ie you don’t get paid the JSA itself. AFAIK, this option isn’t available in the online application, you would need to sort it out at the first interview.

Checked my forecast thanks. It looks like that after this years contribution, I will be one year short and I have 12 years to get the final year contribution.

itsmeagain

calcotti said:

Spoonie_Turtle said:.. If you take a pension, over a certain amount you will have money deducted from your JSA. ..

Pension income in excess of £50/week is deducted in full from the JSA payable.

Where can I find that rule please?

itsmeagain

3card said:

I was made redundant at the end of June 2020 at the age of 60 and i decided to apply for JSA.
The process was easy and in the 6 months i never had to visit and job centre and at my initial phone appointment the lady could tell i was a genuine case and i was honest to tell her i was only looking for a part time job as i had had my fill of full time employment.
I had a pension pot of over £300K and i could have started this in drawdown but i would have preferred to find a suitable part time position in something i could enjoy 
The usual timescale for follow up phone calls from the job centre was 2 weeks but she decided to put me on a monthly call which was acceptable to both of us
I told her at each call what i was doing to look for work and this was accepted

After 6 months my JSA finished and i decided to call my employment days to an end and i started drawing a small pension in the new tax year

I would say to the OP that yes they should apply for JSA but bear in mind that this income is class as taxable at the end of the tax year

Good luck 

Thanks - I can see myself going a similar way as I was planning on retiring at 56 anyway. I always had in mind that I'd work until I reached 40/60th of my DB pension but was stopped a year early of reaching.

poppy12345

itsmeagain said:

calcotti said:

Spoonie_Turtle said:.. If you take a pension, over a certain amount you will have money deducted from your JSA. ..

Pension income in excess of £50/week is deducted in full from the JSA payable.

Where can I find that rule please?

https://www.disabilityrightsuk.org/contribution-based-jsa-amounts

calcotti

itsmeagain said:

calcotti said:

Spoonie_Turtle said:.. If you take a pension, over a certain amount you will have money deducted from your JSA. ..

Pension income in excess of £50/week is deducted in full from the JSA payable.

Where can I find that rule please?

Regulation 51(1) of the JSA Regulations 2013
https://www.legislation.gov.uk/uksi/2013/378/regulation/51

poppy12345

If in the future you need to claim Universal Credit (and no one can predict the future) any pension you take will reduce it £1 for £1.

itsmeagain

poppy12345 said:

itsmeagain said:

calcotti said:

Spoonie_Turtle said:.. If you take a pension, over a certain amount you will have money deducted from your JSA. ..

Pension income in excess of £50/week is deducted in full from the JSA payable.

Where can I find that rule please?

https://www.disabilityrightsuk.org/contribution-based-jsa-amounts

Thanks Calcotti & Poppy - you are the 1st people to answer that aspect of my original question... So, I would need to defer taking my pension for 6 months if i were to qualify for JSA. That would be no problem with my VR & savings.

Eldi_Dos

You would be entitled to and qualify for JSA whether you are taking your pension income or not.