The peoples pension and housing benefit on retirement

nero12

Hi everyone. I have a question regarding the peoples pension which ive never been able to get a straight answer. So im currently living in rented accommodation and probably will be until I retire. Ive never taken out any workplace pensions as ive never been able to afford one due to personal circumstances, however this may change fairly soon.
I did have a passing conversation with a friend who mentioned that if I live in a rented house and have an extra workplace pension then this is taken into account when I retire so i wont see any financial benefit from it. So my question being does this include the peoples pension meaning that anything I pay into it now would be deducted for the purposes of housing benefit when I retire? 

xylophone

Are you expecting to qualify for a full new state pension?

https://www.gov.uk/check-state-pension

https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits

Marcon

nero12 said:

Hi everyone. I have a question regarding the peoples pension which ive never been able to get a straight answer. So im currently living in rented accommodation and probably will be until I retire. Ive never taken out any workplace pensions as ive never been able to afford one due to personal circumstances, however this may change fairly soon.
I did have a passing conversation with a friend who mentioned that if I live in a rented house and have an extra workplace pension then this is taken into account when I retire so i wont see any financial benefit from it. 

Maybe your friend would like to explain to you with full supporting details/figures why this would be the case in your situation (i.e. given your age, income, rent etc). It isn't the black and white scenario they have encouraged you to believe. If they can't, then I suggest you check with someone who can help you e.g. http://turn2us.org.uk

nero12 said:

So my question being does this include the peoples pension 

Yes.

nero12 said:

meaning that anything I pay into it now would be deducted for the purposes of housing benefit when I retire? 

Not necessarily and not necessarily on a £ for £ basis.

....and of course Housing Benefit might not exist at all by then...

Verulamium_Vixen

Hi
Marcon is right, whether it's HB,  Universal Credit or some other means of support with rent it will likely have some degree of taper although hopefully not as steep as current tapers.
Also be aware that you may be entitled to some degree of Council Tax support and this now has to be claimed separately from other benefits.
If you are coming up to retirement please please look into applying for pension credit, thousands of people are entitled but either don't know or won't claim as there is an element of means testing.
Good luck 

nero12

Hi guys , thanks for taking the time to reply. 
So to recap, the reason I came to ask about this was indeed through a passing conversation with a work friend who also lives in rented accommodation. Apparently he too looked into paying into the Peoples Pension and was warned off doing so as and quote ''anything you pay into a pension now would be deducted from any means tested benefits like housing benefit on retirement.'' Including the Peoples Pension. His advice by the way was from the internet where a few legal forums have advised that any pensions would be deducted from renters . Of course this stopped me dead in my tracks as all this time I assumed the peoples Pension would be excluded from means testing on retirement as it was the government of the days idea so that less well off wage earners could have a little extra on retirement. Ive checked a few times and no information has ever come to light, its  almost as if the Government  simply doesnt want anyone to know. 
Anyway based on your kind advice my next course of action would be to ask these guys http://turn2us.org.uk/ with all my own figures ??
PS Has Martin Lewis ever mentioned this on his programs?

Marcon

nero12 said:

Hi guys , thanks for taking the time to reply. 
So to recap, the reason I came to ask about this was indeed through a passing conversation with a work friend who also lives in rented accommodation. Apparently he too looked into paying into the Peoples Pension and was warned off doing so as and quote ''anything you pay into a pension now would be deducted from any means tested benefits like housing benefit on retirement.'' Including the Peoples Pension. His advice by the way was from the internet where a few legal forums have advised that any pensions would be deducted from renters . 

Depends who 'warned him off' - possibly someone who was going through the same vague word of mouth channels that have now filtered down to you. It's easy to do, particularly when someone truly means well but is, unfortunately, simply mistaken but has no means of knowing that's the case. 

nero12 said:

 Of course this stopped me dead in my tracks as all this time I assumed the peoples Pension would be excluded from means testing on retirement as it was the government of the days idea so that less well off wage earners could have a little extra on retirement. 

The Peoples Pension is 'just another pension scheme' - there's no reason why it would be excluded any more than any other private pension plan.

nero12 said:

Ive checked a few times and no information has ever come to light, its  almost as if the Government  simply doesnt want anyone to know. 

I'm not sure what exactly you've checked, but there is plenty of accurate information on the internet about how private pension provision interacts with benefits. There is sadly also a lot of inaccurate information, but I'm surprised nothing alerted you to the fact that having some pension provision of your own is overwhelmingly likely to be to your benefit, especially with 'free' money by way of employer contributions.

nero12 said:

Anyway based on your kind advice my next course of action would be to ask these guys http://turn2us.org.uk/ with all my own figures ??

Seems like a good idea. If for any reason they can't help (and they are excellent), they should be able to refer you to someone who can. 

nero12

Depends who 'warned him off' - possibly someone who was going through the same vague word of mouth channels that have now filtered down to you. It's easy to do, particularly when someone truly means well but is, unfortunately, simply mistaken but has no means of knowing that's the case. 

Hi Marcon thanks for replying. I think you maybe right there. I vaguely remember when this all started and assumed somehow that this was an extension to the state pension mainly because of the ''automatic enrollment'' part. Like the gouvernment are saying Hey, heres a way of saving for the future and dont worry its for your own good'' I remember also contacting someone regarding this new peoples pension and asking would it be of any benefit to renters , all I ever got was  a ''dont know , you need to seek professional advice''. I sort of smelt a rat back then, apart form the money side of things it never felt right paying into something I would be able to draw on so I left it. 
As an addendum , there are alot of people I know who are renting and most of them havnt a clue regarding the rules on pensions  --especially this Peoples Pension and I can honestly say all of them think its excluded from means testing..
And at no point did  the government of the day as far as I can remember , ever tell renters that they may have to use it some or all of it to contribute to your rent. Scary 

Marcon

nero12 said:

Depends who 'warned him off' - possibly someone who was going through the same vague word of mouth channels that have now filtered down to you. It's easy to do, particularly when someone truly means well but is, unfortunately, simply mistaken but has no means of knowing that's the case. 

Hi Marcon thanks for replying. I think you maybe right there. I vaguely remember when this all started and assumed somehow that this was an extension to the state pension mainly because of the ''automatic enrollment'' part. Like the gouvernment are saying Hey, heres a way of saving for the future and dont worry its for your own good'' I remember also contacting someone regarding this new peoples pension and asking would it be of any benefit to renters , all I ever got was  a ''dont know , you need to seek professional advice''. I sort of smelt a rat back then, apart form the money side of things it never felt right paying into something I would be able to draw on so I left it. 
As an addendum , there are alot of people I know who are renting and most of them havnt a clue regarding the rules on pensions  --especially this Peoples Pension and I can honestly say all of them think its excluded from means testing..
And at no point did  the government of the day as far as I can remember , ever tell renters that they may have to use it some or all of it to contribute to your rent. Scary 

Means tested benefits have always been based on income and/or capital. I'm not sure how anyone could view pension income as somehow 'exempt' from being classed as income (or why the Peoples Pension should be seen as some sort of 'special case'!). It is very clear on any number of websites (and was included on paper application forms )e.g.

https://www.turn2us.org.uk/Jargon-buster/Means-tested-benefits#:~:text=Means-tested benefits are available,Income Support

Kim1965

I think if a person does not take control of their pension they will be at the mercy of the state in retirement. Nobody knows how generous this will be in the future. I think what is clear is that having rent to pay when retired means you need larger funds to be independent. You don’t say how old you are, how much your saving , when you want to retire and how much you need to live on.

Albermarle

nero12 said:

Depends who 'warned him off' - possibly someone who was going through the same vague word of mouth channels that have now filtered down to you. It's easy to do, particularly when someone truly means well but is, unfortunately, simply mistaken but has no means of knowing that's the case. 

Hi Marcon thanks for replying. I think you maybe right there. I vaguely remember when this all started and assumed somehow that this was an extension to the state pension mainly because of the ''automatic enrollment'' part. Like the gouvernment are saying Hey, heres a way of saving for the future and dont worry its for your own good'' I remember also contacting someone regarding this new peoples pension and asking would it be of any benefit to renters , all I ever got was  a ''dont know , you need to seek professional advice''. I sort of smelt a rat back then, apart form the money side of things it never felt right paying into something I would be able to draw on so I left it. 
As an addendum , there are alot of people I know who are renting and most of them havnt a clue regarding the rules on pensions  --especially this Peoples Pension and I can honestly say all of them think its excluded from means testing..
And at no point did  the government of the day as far as I can remember , ever tell renters that they may have to use it some or all of it to contribute to your rent. Scary 

As said already, The Peoples Pension is just another pension provider, there is nothing special or different about them.
By the way if you contact any pension provider asking for advice, you will get the same answer.

Government policy has always been to encourage people to save for their old age/retirement ( via pension tax relief for example)and auto enrolment brought many more millions into this, mainly lower paid workers.
Having some level of pension over and above the state pension, should benefit many people to be better off in retirement, and not rely so much on state benefits ( which many people hate doing). On the other side this should hopefully save the Government some money from its huge pension and benefits bill.

However currently the way means tested benefits, Pensions Credit, housing benefit are calculated and how private pension provision is taken into account, is not really very fair or logical, and needs relooking at.

So in summary , it is not some sort of government conspiracy and has nothing to do with the Peoples Pension at all.

However the way small pension pots are taken into account in means tested benefits, probably needs a review/change.

Silvertabby

Nothing new.  Many years ago, when I asked a (full time, good salary) Local Government employee why they wanted to opt out of the LGPS, they replied that they didn't want to 'waste money' on a pension that they would only be expected to live off in retirement.