Pension credit and Notional income

mrsdoyle

Sorry,me again,how is Notional income calculated for an untouched pension pot ? As I thought it was e.g.; £30000.00 pot 15 year Gilt rate = 4.50%,GAD table for 66 year old = £71.00 per annum per £1000.00 = £2130.00 divided by 52 (weeks) = £40.96 per week. This calculation has been used in examples of Notional income on Gov.websites,But according to my PC man,this is incorrect as it does not include payments I could and should withdraw.So I am totally confused,can anyone help ! Thanks.

Marcon

mrsdoyle said:

Sorry,me again,how is Notional income calculated for an untouched pension pot ? As I thought it was e.g.; £30000.00 pot 15 year Gilt rate = 4.50%,GAD table for 66 year old = £71.00 per annum per £1000.00 = £2130.00 divided by 52 (weeks) = £40.96 per week. This calculation has been used in examples of Notional income on Gov.websites,But according to my PC man,this is incorrect as it does not include payments I could and should withdraw.So I am totally confused,can anyone help ! Thanks.

I"ve no idea what a PC man is, but https://www.gov.uk/government/publications/pension-credit-technical-guidance/a-detailed-guide-to-pension-credit-for-advisers-and-others#:~:text=Notional%20income%20is%20income%20your,or%20a%20retirement%20annuity%20contract seems to be the definitive guide and was updated in April 23, so seems up to date.

mrsdoyle

Marcon said:

mrsdoyle said:

Sorry,me again,how is Notional income calculated for an untouched pension pot ? As I thought it was e.g.; £30000.00 pot 15 year Gilt rate = 4.50%,GAD table for 66 year old = £71.00 per annum per £1000.00 = £2130.00 divided by 52 (weeks) = £40.96 per week. This calculation has been used in examples of Notional income on Gov.websites,But according to my PC man,this is incorrect as it does not include payments I could and should withdraw.So I am totally confused,can anyone help ! Thanks.

I"ve no idea what a PC man is, but https://www.gov.uk/government/publications/pension-credit-technical-guidance/a-detailed-guide-to-pension-credit-for-advisers-and-others#:~:text=Notional%20income%20is%20income%20your,or%20a%20retirement%20annuity%20contract seems to be the definitive guide and was updated in April 23, so seems up to date.

The PC man is the person at the Pension  Credit helpline.I have seen the details you have quoted but it dosent say how the calculation is made.

xylophone

https://benefitsinthefuture.com/notional-income-from-pensions-too-notional-for-some-advisers/

may be worth a look.

mrsdoyle

Hi Xylophone,yes I found this site a while ago I have even paid for the ready reckoner ! which is why Im confused by the figures that the Pension Credit Decision maker has come up with.He raced through the figures (I should have recorded the conversation) but basically said that a certain amount of pension has to be withdrawn,which makes a nonsense of the ferrett notional income calculator and all the other calculators out there! I will phone my Pension provider tomorrow to check what figures they have supplied on the PPR1 form that they send to the P.Credit people.I will report back.Many thanks for your reply.

xylophone

 but basically said that a certain amount of pension has to be withdrawn,

Is that exactly what he said?

https://www.rightsnet.org.uk/forums/viewthread/12728/

The HB Guidance Manual advises that the amount of notional income to be taken into account is the maximum amount of income that may be withdrawn from the pension pot. From 6th April 2015, you should take this to mean 100% of the rate of annuity that the pension pot would generate in line with the Government Actuary’s Department (GAD) table (HB Guidance Manual, Chapter BP2, paras 2.680 to 2.687).

mrsdoyle

Yes thats what he said whilst all the time racing his words trying to get me off the line.The link you have given me is in relation to Housing benefit,would that be different to P. Credit ? However the part that says,100% of the rate of annuity that the pension pot would generate in line with the Government Actuary’s Department (GAD table) is exactly as my figures in my first post would suggest,and is how I expected to work out my notional income.

mrsdoyle

Ok hands up,its me making the errors.I have rushed through all the info.on the internet etc.and failed to understand that Notional income wasnt just the yearly annuitiy I would have taken into account,but also the amount of AVAILABLE pension I could withdraw,So sorry for my droning on.I did find this though for anyone looking for a good Pension Credit guide;https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1148437/pc10s-a-detailed-guide-to-pension-credit-for-advisers-april-2023.pdf