Wife's pension found - but what to do?

jibblyjabbly

Signing off for the day. Just wanted to say a heartfelt thanks for the amazing support received here. Will update again as soon as we have heard from Lloyds.

best wishes

R

jibblyjabbly

Still trying to get in touch with Lloyds but found this online and it looks like it answers my question. Any comments, anyone?

https://questions-statements.parliament.uk/written-questions/detail/2024-12-12/19835
which led to...
https://www.thisismoney.co.uk/money/pensions/article-14114353/Taking-NHS-pension-Universal-Credit.html

Newcad

The parliamentary answer from Sir Stephen Timms says exactly what we said above, but in the usual gobbledygook Ministerial-speak - to try and hide the facts in the hope that people misunderstand what he is saying.

Universal Credit is a means-tested benefit and takes occupational and personal pensions into account when the customer receives that income under the scheme rules.

The bit he tries to hide by not saying it is that isn't taken into account when NOT RECEIVED.
Then the bit about it becoming 'Notional Income' if still in deferral after after SPA is clear enough.
The bit about:

… it is only right that a customer avails themselves of their own financial resources before relying on benefits.

Is purely a statement of government opinion, - of course the government would prefer it if you 'avail' yourself of a personal/workplace pension before SPA rather than deferring it - so that they could then deduct it from your UC and pay you less UC.

jibblyjabbly

I (finally) spoke to the Lloyds pension people and they said that if the pension is in deferral it will increase every year in line with inflation (5% he said). It's a "final salary" pension. It seems it will increase the same whether my wife begins to take it now, or not. So it looks like the easiest option will be to just start taking the pension now (option 2) and inform DWP / UC of the pension income as and when it happens. Anything else seems like an unnecessary headache.

Edit: It also seems to be "the right thing to do" because we will be using less of the taxpayer's money.   

best wishes

R 

DE_612183

jibblyjabbly said:

I (finally) spoke to the Lloyds pension people and they said that if the pension is in deferral it will increase every year in line with inflation (5% he said). It's a "final salary" pension. It seems it will increase the same whether my wife begins to take it now, or not. So it looks like the easiest option will be to just start taking the pension now (option 2) and inform DWP / UC of the pension income as and when it happens. Anything else seems like an unnecessary headache.

Edit: It also seems to be "the right thing to do" because we will be using less of the taxpayer's money.   

best wishes

R 

I disagree - the pension ( Lloyds is there to be taken when she is 67 ) - taking it early will see a reduction in the pension amount that you get.

The "taking it early" is an exception rather than the rule - leaving it there is what Lloyds expect you to do - so thats really what you should do - otherwise what you are doing is taking money early that will stop some of your UC, and because you take it early you'll also get a lesser amount in retirement - you're robbing yourself twice.

jibblyjabbly

LLoyds wrote to her saying her retirement date was coming up. She will be 60. Lloyds presented us with three options and at no point mentioned the fact that we could defer it.

We are very worried that somehow DWP / UC will find a way to penalise us because we've not used money we could have used. Besides this forum, I haven't got a solid answer that says its safe for us to defer it. How can I be sure we are "allowed" to do this? 

HillStreetBlues

jibblyjabbly said:

LLoyds wrote to her saying her retirement date was coming up. She will be 60. Lloyds presented us with three options and at no point mentioned the fact that we could defer it.

We are very worried that somehow DWP / UC will find a way to penalise us because we've not used money we could have used. Besides this forum, I haven't got a solid answer that says its safe for us to defer it. How can I be sure we are "allowed" to do this? 

The answer you seek is like proving a negative, sometimes you have to discount a positive to get the answer.
UC law   https://www.legislation.gov.uk/uksi/2013/376/regulation/74

Notional unearned income

74.—(1) If unearned income would be available to a person upon the making of an application for it, the person is to be treated as having that unearned income.

(2) Paragraph (1) does not apply to the benefits listed in regulation 66(1)(b).

(3) A person who has reached the qualifying age for state pension credit is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made.

(4) The circumstances in which a person is to be treated as possessing retirement pension income for the purposes of universal credit are the same as the circumstances set out in regulation 18 of the State Pension Credit Regulations 2002 M1 in which a person is treated as receiving retirement pension income for the purposes of state pension credit.

You have to reach SPA for Notional unearned income to apply when not taking a pension that a person is entitled too.
That means a person under SPA is free to defer it without it being Notional unearned income.
Simply put the reg wouldn't mention needing to reach SPA if it included all ages it would just read "A person is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made."
So the answer is it's allowable (to defer) because it's not in UC regs (the negative)
PS SPA same as SPCA

fuzzzzy

HillStreetBlues said:

jibblyjabbly said:

LLoyds wrote to her saying her retirement date was coming up. She will be 60. Lloyds presented us with three options and at no point mentioned the fact that we could defer it.

We are very worried that somehow DWP / UC will find a way to penalise us because we've not used money we could have used. Besides this forum, I haven't got a solid answer that says its safe for us to defer it. How can I be sure we are "allowed" to do this? 

The answer you seek is like proving a negative, sometimes you have to discount a positive to get the answer.
UC law   https://www.legislation.gov.uk/uksi/2013/376/regulation/74

Notional unearned income

74.—(1) If unearned income would be available to a person upon the making of an application for it, the person is to be treated as having that unearned income.

(2) Paragraph (1) does not apply to the benefits listed in regulation 66(1)(b).

(3) A person who has reached the qualifying age for state pension credit is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made.

(4) The circumstances in which a person is to be treated as possessing retirement pension income for the purposes of universal credit are the same as the circumstances set out in regulation 18 of the State Pension Credit Regulations 2002 M1 in which a person is treated as receiving retirement pension income for the purposes of state pension credit.

You have to reach SPA for Notional unearned income to apply when not taking a pension that a person is entitled too.
That means a person under SPA is free to defer it without it being Notional unearned income.
Simply put the reg wouldn't mention needing to reach SPA if it included all ages it would just read "A person is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made."
So the answer is it's allowable (to defer) because it's not in UC regs (the negative)
PS SPA same as SPCA

But no-one has established if there is any advantage to deferring a pension which has a normal retirement age of 60. 

The OP has stated that Lloyds have said that the pension will increase by the same amount whether in deferment or payment.

What they need to find out is if they did not have it paid out until the wife is 67, would they effectively just lose everything which would have been paid out between 60 and 67.

jibblyjabbly

fuzzzzy said:

But no-one has established if there is any advantage to deferring a pension which has a normal retirement age of 60. 

The OP has stated that Lloyds have said that the pension will increase by the same amount whether in deferment or payment.

What they need to find out is if they did not have it paid out until the wife is 67, would they effectively just lose everything which would have been paid out between 60 and 67.

Yes I am not sure on this. We will lose it either way, as UC will take it back pound for pound, but is the taxpayer losing out if we don't take it now as opposed to in 7 years?

HillStreetBlues

fuzzzzy said:

HillStreetBlues said:

jibblyjabbly said:

LLoyds wrote to her saying her retirement date was coming up. She will be 60. Lloyds presented us with three options and at no point mentioned the fact that we could defer it.

We are very worried that somehow DWP / UC will find a way to penalise us because we've not used money we could have used. Besides this forum, I haven't got a solid answer that says its safe for us to defer it. How can I be sure we are "allowed" to do this? 

The answer you seek is like proving a negative, sometimes you have to discount a positive to get the answer.
UC law   https://www.legislation.gov.uk/uksi/2013/376/regulation/74

Notional unearned income

74.—(1) If unearned income would be available to a person upon the making of an application for it, the person is to be treated as having that unearned income.

(2) Paragraph (1) does not apply to the benefits listed in regulation 66(1)(b).

(3) A person who has reached the qualifying age for state pension credit is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made.

(4) The circumstances in which a person is to be treated as possessing retirement pension income for the purposes of universal credit are the same as the circumstances set out in regulation 18 of the State Pension Credit Regulations 2002 M1 in which a person is treated as receiving retirement pension income for the purposes of state pension credit.

You have to reach SPA for Notional unearned income to apply when not taking a pension that a person is entitled too.
That means a person under SPA is free to defer it without it being Notional unearned income.
Simply put the reg wouldn't mention needing to reach SPA if it included all ages it would just read "A person is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made."
So the answer is it's allowable (to defer) because it's not in UC regs (the negative)
PS SPA same as SPCA

But no-one has established if there is any advantage to deferring a pension which has a normal retirement age of 60. 

The OP has stated that Lloyds have said that the pension will increase by the same amount whether in deferment or payment.

What they need to find out is if they did not have it paid out until the wife is 67, would they effectively just lose everything which would have been paid out

My reply was directly related to the post about deferral and safe to do so (that's why I quoted it).