Converting A Classic Civil Service Pension To A Different Type Of Pension

Ripley43

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

Silvertabby

xylophone said:

"will spend the rest of her life waiting for that knock at the door"?

I took this to mean that if your mother waits until SPA, even if there is no immediate enquiry concerning her MTBs, she could be constantly wondering/ worrying about if ever at some point there will be.

You have already said that your mother wants to claim her CSP so as to be free of the MTB system.

 I suppose that if she gets on and does so, at least she will know where she is.

With four years of deferred pension and her PCLS, even if there is some repayment due, she should still be reasonably comfortable financially?

And she will have a full NSP around the middle of 2027 by which time the amount should be no less than around £12,600 per annum?

it really is up to her how she wants to proceed. She could always try a letter to DWP now for a ruling on the correct interpretation of the legislation.

Do you and your mother know what would have been her PCLS and monthly pension if she had claimed at 60?

Would she stlll have been entitled to some MTBs, even if the amount would have been reduced?

Yes, that what I meant.  DWP do carry out audit checks on a regular basis.

Dazed_and_C0nfused

Ripley43 said:

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

Is she ever going to claim it 🤔

Silvertabby

Ripley43 said:

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

It's not quite that simple, as the Civil Service are legally required to make every effort to pay benefits due.  Yes, your mum could just ignore all the letters and phone calls, but does she really want that stress in retirement?

Dare I say that I'm detecting an element of "nose/spite/face" here?  

Ripley43

Silvertabby said:

Ripley43 said:

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

It's not quite that simple, as the Civil Service are legally required to make every effort to pay benefits due.  Yes, your mum could just ignore all the letters and phone calls, but does she really want that stress in retirement?

Dare I say that I'm detecting an element of "nose/spite/face" here?  

Mum just doesn't want to find herself in any sort of trouble/facing prosecution if she claims this pension. I don't know what you mean by "nose/spite/face here"?

Silvertabby

Ripley43 said:

Silvertabby said:

Ripley43 said:

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

It's not quite that simple, as the Civil Service are legally required to make every effort to pay benefits due.  Yes, your mum could just ignore all the letters and phone calls, but does she really want that stress in retirement?

Dare I say that I'm detecting an element of "nose/spite/face" here?  

Mum just doesn't want to find herself in any sort of trouble/facing prosecution if she claims this pension. I don't know what you mean by "nose/spite/face here"?

Have you never heard the expression "cutting off your nose to spite your face"?  

I appreciate that your mum is scared, but I really feel that she is just storing up more stress.  How much is her CS pension?  Even if the lump and arrears are swallowed up by means tested benefits repayments - if that is indeed the case - then she will have her CS pension for the rest of her retirement, instead of just the State pension.

xylophone

Do you know the expression "cutting off your nose to spite your face"?

Think about this in connection with your post https://forums.moneysavingexpert.com/discussion/comment/81110167/#Comment_81110167

Thanks. She's just not going to bother claiming it now or ever because she's terrified of the consequences because as you say it will be payable from age 60 and like you said in your post the decision maker could decide to apply it retrospectively as income for ESA purposes.

Mum just doesn't want to find herself in any sort of trouble/facing prosecution if she claims this pension.

But why on earth does she think this would be the case?

If anything at all has been established, it is that there is no obligation to draw a pension either before or after PCA.

It is simply that after PCA there will certainly be  the question of "notional income" where MTBs are involved.

If a person on MTBs draws a pension before PCA, then the rules set out here

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

The problem in your mother's case is one of interpretation because she does NOT have a pension "POT" as understood in the above link.

She has a Defined Benefit Pension where it is very clear what is income and what is a lump sum.

It is  obvious that in relation to arrears of pension paid as a lump sum, that lump sum can be ascribed to specific tax years when 

it would have been income.

Your mother will not be in trouble or facing prosecution.

She may be advised that a repayment of benefits is due, but so what? She will have the means to do so.

Or it may be that what she was told by the DWP operative on the phone is not accurate.

The opposing views have been put forward in previous links.

It is up to your mother what action she wishes to take.

My inclination would be to write to DWP for a statement of the rules as they apply to her particular case.

hugheskevi

Ripley43 said:

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

As well as the things others have said, this would create a lot of complexity on death. There would be a large amount of back-dated, unpaid pension due to the estate, and have to be dealt with by HMRC and maybe DWP. Hopefully she will live many years to come, but that means many years for the situation to get more and more complex.

The longer this gets left, the bigger the mess to clear up and the more complicated it will be.

Sarahspangles

Ripley43 said:

Silvertabby said:

Ripley43 said:

@xylophone, thank you. Mum is not intending to claim the civil service pension now or at SPA and I can't think of any reason why there could be a "knock at the door" or that any enquiries regarding previous MTB'S would be made? Am I missing something here?

It's not quite that simple, as the Civil Service are legally required to make every effort to pay benefits due.  Yes, your mum could just ignore all the letters and phone calls, but does she really want that stress in retirement?

Dare I say that I'm detecting an element of "nose/spite/face" here?  

Mum just doesn't want to find herself in any sort of trouble/facing prosecution if she claims this pension. I don't know what you mean by "nose/spite/face here"?

This is why I suggested an MP’s office may help. Your mum originally assumed it would be okay to defer starting her CSP until she was retired and KaMelo’s helpful post clarified that that seems consistent with the ESA legislation/DMG in terms of what’s ‘allowed’. Then your mum considered changing her mind and has been told two different things (I think?) by DWP employees, neither of which seem to be a definitive position by a Decision Maker.

Now your mum is too worried to either claim now and lift herself out of the benefits system, or to claim at SPA and get the pension she worked for.

Whatever gets her a definitive answer fastest seems the best approach. Even if the guidance is that she can’t claim now without her capital being taken into account retrospectively, at least she would know her options at SPA, which isn’t too far away?

Just wanted to add, I hope my children are as proactive on my behalf as you are being, if I’m in a pickle when I’m older x

Ripley43

Sarahspangles said "Just wanted to add, I hope my children are as proactive on my behalf as you are being, if I’m in a pickle when I’m older x" . Thank you so much for that kind comment. I've just found something in the DMG which I think may apply to my mums situation, I'm having a read through and may post to see what others think.