Retirement Pension Vs Universal Credit

Knuzzle

Good morning,

I am currently on

Universal Credit

Universal Credit with limited ability to work

PIP (Basic)

I am due to retire on my 66th birthday which is in October 2024

I plan to start a small online business, I do not intend it to become massive, I just want an extra income to back up my retirement pension.

What I am trying to find out is, as with Universal Credit (Basic) when you receive extra income albeit through the system or self-employed, the DWP will deduct (I think it is 62%) from your Universal Credit award.

Will they do the same for my retirement pension?

Is one’s retirement pension means tested or not?

Thank you.

Torry_Quine

The state pension is not means tested.

Spoonie_Turtle

With Universal Credit they deduct 55% of earnings.  As you have LCW you would have the work allowance which is an amount of earnings they ignore before making deductions.  If you claim help with housing costs that would be £379 per month, or if you don't get help with housing costs it would be £631 per month.

The State Pension is not means-tested, as already said above.  However you should check eligibility for Pension Credit, especially as you receive PIP; PC would be means-tested but it passports to other help (even if you just get 1p per week) and if there is any entitlement then it would be worth seeing how much extra you would get.

[Do remember that the State Pension is taxable income, as would be any income from a business.  This would be relevant if any earnings took you over the threshold for paying tax.]

whizzywoo

Do you live on your own?
Or do you have a partner who is under State pension age?

Once you hit State Pension age I don't believe you can claim Universal Credit unless you are part of a Mixed Age Couple. Ie one of you is under State pension age. 

In any case Pension Credit is normally much more generous than Universal Credit. 

If you are part of a Mixed Age Couple then your Retirement Pension will be deducted in full from any UC entitlement. 

NedS

Earned income from employment (or self-employment) reduces UC at a rate of 55%

Unearned income, such as pension income, is deduced in full, pound for pound.

You can only continue to claim UC as a couple once you reach state pension age if you have a partner with whom you live that is below state pension age.