Council Tax Reduction and Deferred (Tiny) Private Pension

CitySpy

  Hello to Everyone out there in Forum Land


I would be very grateful for any feedback and advice on this one please...

My friend is approaching her retirement age of 66 in around two years time and has had a State Pension Forecast that she will retire with a full State Pension.  

During 1990, my friend was employed by a university as an office worker and took out an occupational pension while working there.  However, she only paid into the scheme for seven months because she left, therefore her payments into the scheme stopped with the end of her employment.  Her wages were not terribly high at the time.

During 2014, she enquired about her tiny pension and was not surprised that it was indeed tiny yielding a £502 lump sum or, she had the option to have regular weekly payments of
95 pence a week.

My friend is not in the best of health nowadays suffering from several long-term illnesses and disabilities, however she does not receive any disability benefits for them.

In additional, she has no other capital whatsoever.

My friend is wondering if she will be allowed to still defer her very small pension and still claim for Council Tax Reduction when she retires in two year's time, she has read that it will be regarded as "Notional" when she eventually claims for her CTR and intends to take the details of the very small deferred pension with her so that her assessment for CTR can be calculated in view of this.


VERY grateful for any advice whatsoever, as my friend is getting a bit concerned about this and it's not doing her any good.  
Cheers.  

calcotti

In the circumstances taking the lump sum seems sensible and a lump sum of that size will have no impact ob benefit entitlement.
She could apply for Personal Independence Payment before she reaches pension age, if she waits to after pension age it would be Attendance allowance.
It's not clear from your post what income she is currently living off.

CitySpy

Dear calcotti

Thank you most sincerely for your reply, my friend is currently unemployed and existing on a Legacy Benefit, hoping to at least live to see her retirement... 

I have told her about PIP, but says she would rather stay in the position she is in as she is due to retire in the not too distant future and doesn't want any extra fuss!

As far as withdrawing this very small amount in a lump sum - and she really needs the money for house repairs such as replacing leaking and blown windows and repairing her upstairs toilet which doesn't work, my friend is scared that her local council would view this as depriving herself of assets to obtain benefits.

I have read and I understand that many councils will allow expenditure of a lump sum from a private pension for very necessary goods and services.  How much more necessary is a toilet for an elderly woman not in the best health I wonder!

I think my friend would be best advised to find out more about her private pension amounts and then make enquiries with her local council to see what they think about this?

Thank you for your input and advice.😁

calcotti

Any capital below £6000 is ignored and therefore deprivation of capital doesn't come into it. 

Obviously the decision on whether or not to apply for PIP (if it's applicable) is her choice but if she lives alone being in receipt of PIP (or AA) could increase her entitlement to other benefits also.

Alice_Holt

Taking the lump sum of c.£500 will not impact on her CTr or deprivation of capital (as calcotti has advised).

She may wish to consider if rented social sheltered accommodation, is more suitable for her than a house she can't afford to maintain. 
If she thinks this a better option, then a PIP award may help with her councils eligibility criteria. 

https://www.ageuk.org.uk/information-advice/care/housing-options/sheltered-housing/