Personal pension

SianLM25

Hi all,
Background. 33 yo and have been a full time carer for 20 years on carers allowance and income support.
Does anyone know how to save for a pension?
I have been putting some money away weekly but I'm worried because when income support eventually becomes universal credit the savings your allowed drops from £16k to £6k.
I've tried looking at companies but I don't understand the jargon.
I'd like to be able to save what I can afford not what they tell me.
Any help is appreciated 
Thanks all
Sian

Marcon

SianLM25 said:

Hi all,
Background. 33 yo and have been a full time carer for 20 years on carers allowance and income support.
Does anyone know how to save for a pension?
I have been putting some money away weekly but I'm worried because when income support eventually becomes universal credit the savings your allowed drops from £16k to £6k.
I've tried looking at companies but I don't understand the jargon.
I'd like to be able to save what I can afford not what they tell me.
Any help is appreciated 
Thanks all
Sian

Have a look at https://www.moneyhelper.org.uk/en/pensions-and-retirement especially the sections on 'pension basics' and 'building your retirement pot'. If you're likely to be saving small amounts at irregular intervals, then possibly a simple stakeholder pension (which must accept contributions as low as £20 - which in practice means you pay £16 and they claim a basic rate tax top up on your behalf to bring that up to the £20). You can open one direct without paying anyone to do it for you - Aviva is open to new stakeholder business.

You say you are 33 and have been a full time carer for 20 years on carers allowance income support - that means you were 13 when first started claiming. Is that correct?

Check your state pension: https://www.gov.uk/browse/working/state-pension

marcia_

SianLM25 said:

Hi all,
Background. 33 yo and have been a full time carer for 20 years on carers allowance and income support.
Does anyone know how to save for a pension?
I have been putting some money away weekly but I'm worried because when income support eventually becomes universal credit the savings your allowed drops from £16k to £6k.
I've tried looking at companies but I don't understand the jargon.
I'd like to be able to save what I can afford not what they tell me.
Any help is appreciated 
Thanks all
Sian

 The savings level for income support and universal credit are the same. £16k no benefit entitlement. Over £6k you get a reduction in benefits. 

 That aside if your money is in a proper pension scheme its not counted as savings fir benefits because you have no access to it. 

xylophone

https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

There is no indication here 

https://www.litrg.org.uk/pensions/paying-pensions/tax-relief-pension-contributions#:~:text=Your UK relevant earnings include,by your employer and taxable.

or here

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100#earnings

that your CA (although taxable) counts as relevant earnings for purposes of pension tax relief.

Without relevant earnings, you are limited to a net  annual contribution in each tax year  of up to £2880.

If you have savings available, you could consider making a contribution now of this amount to a (eg) stakeholder pension - the pension

provider would claim tax relief of £720 and add it to your pot.

Next tax year, assuming your income situation remains the same, you could do the same from savings or you might prefer to make a

 monthly contribution of up to £240 a month and the provider would claim tax relief of up to  £60 a month.


Aviva Stakeholder information

https://static.aviva.io/content/dam/document-library/adviser/pensions/sp01001c.pdf

Standard Life Stakeholder information

https://www.standardlife.co.uk/pensions/stakeholder-pension

tacpot12

You will be limited as to how much you can pay into a pension per tax year as you aren't earning any money. The limit is £2880 per year.

You, in theory, could pay that amount into a personal pension when you open it. This would reduce your savings by the same amount, but there is a risk that the DWP will say that you deliberately deprived yourself of your capital in order to increase the amount of UC you receive when you transfer to UC. The DWP must show that a significant purpose in putting the money into a pension was to increase your entitlement to UC, even if it was not your main purpose. I think they will be able to do so, which means that you can really only put income into a pension, not a lump sum from your savings in order to reduce the amount of savings you have. You can't pay all your Universal Credit and Carers Allowance into your pension and live of your savings; this would also be deliberate deprivation of assets. All you can do is pay the excess of Universal Credit + Carers Allowance over what you need to live into a pension. Over time, your savings will go down because you are allowed to use them to buy larger items, such as appliances that need replacing, or redecorating your home. You should keep evidence of why the expenditure was necessary and receipts for what you have bought/paid for.

When you move from Income Support to Universal Credit, you shoul get a Migration Notice letter which means that you will receive transitional potection. This means that you will be allowed to have savings of more than £16,000 for 12 months. This will also more time for any large and essential/unavoidable purchases to be made if you do have more than £16,000 in savings. 

Albermarle

This is another simple pension that would be suitable.
Personal Pension | Private Pension | Legal & General (legalandgeneral.com)

xylophone

I am not at all sure that contributing to a pension could be regarded as deprivation of assets.


https://www.litrg.org.uk/pensions/paying-pensions/pension-contributions-effect-state-benefits

Child Benefit is now a means tested benefit - a higher rate tax payer may deliberately increase his pension contributions to avoid HICBC.

Would he be taken to task for this?

xylophone

And rather ironically, low/no earners were once advised to think very carefully about contributing to a pension on the basis that they could

end up with a fund just sufficient to bar them from pension credit (and thus from certain associated benefits).


This is less likely to apply going forward when a just a  full new state pension (for which even those on benefits may well qualify via the

credits system) is set a couple of pounds over standard GPC.


Therefore if people on benefits would like a little more than state pension in old age, they may well want to set aside what they can afford

while they can?

SianLM25

Marcon said:

SianLM25 said:

Hi all,
Background. 33 yo and have been a full time carer for 20 years on carers allowance and income support.
Does anyone know how to save for a pension?
I have been putting some money away weekly but I'm worried because when income support eventually becomes universal credit the savings your allowed drops from £16k to £6k.
I've tried looking at companies but I don't understand the jargon.
I'd like to be able to save what I can afford not what they tell me.
Any help is appreciated 
Thanks all
Sian

especially the sections on 'pension basics' and 'building your retirement pot'. If you're likely to be saving small amounts at irregular intervals, then possibly a simple stakeholder pension (which must accept contributions as low as £20 - which in practice means you pay £16 and they claim a basic rate tax top up on your behalf to bring that up to the £20). You can open one direct without paying anyone to do it for you - Aviva is open to new stakeholder business.

You say you are 33 and have been a full time carer for 20 years on carers allowance income support - that means you were 13 when first started claiming. Is that 

 Thank you for you help, I'll look into it.
I'd read into avia but some of the reviews were putting me off. I suppose some things are risk vs reward.
I became a carer at 13 I didn't start CA or IS until I was 16/17 as I was too young to claim.

Albermarle

SianLM25 said:

Marcon said:

SianLM25 said:

Hi all,
Background. 33 yo and have been a full time carer for 20 years on carers allowance and income support.
Does anyone know how to save for a pension?
I have been putting some money away weekly but I'm worried because when income support eventually becomes universal credit the savings your allowed drops from £16k to £6k.
I've tried looking at companies but I don't understand the jargon.
I'd like to be able to save what I can afford not what they tell me.
Any help is appreciated 
Thanks all
Sian

especially the sections on 'pension basics' and 'building your retirement pot'. If you're likely to be saving small amounts at irregular intervals, then possibly a simple stakeholder pension (which must accept contributions as low as £20 - which in practice means you pay £16 and they claim a basic rate tax top up on your behalf to bring that up to the £20). You can open one direct without paying anyone to do it for you - Aviva is open to new stakeholder business.

You say you are 33 and have been a full time carer for 20 years on carers allowance income support - that means you were 13 when first started claiming. Is that 

 Thank you for you help, I'll look into it.
I'd read into avia but some of the reviews were putting me off. I suppose some things are risk vs reward.
I became a carer at 13 I didn't start CA or IS until I was 16/17 as I was too young to claim.

The pension provider ( Aviva for example) is basically an administrator. Money in , Money out, tax, holding investments, offering customer service  etc 

Your money is actually in the investment (s) within the pension. This is where the risk vs reward is .

It can be confusing with a company like Aviva ( and some others ), because the pension provider is Aviva, but the investment funds are also labelled Aviva. However they are two different items. 

dunstonh

I'd read into avia but some of the reviews were putting me off.

When it comes to financial products, then ignore the reviews of big companies like Aviva.      Half the bad reviews will be bogus or a misunderstanding by the person making the review.  i.e. blaming Aviva where there is no wrongdoing.