Musings on changing from UC to Pension Age benefits, and a question.

Newcad

Next year I reach State Pension Age, 26th Feb 2026.

Which means that I will switch from UC to Pension age benefits, and my UC should stop at the end of that AP, ie. on 13th March.

As well as the State Pension I have a modest Workplace pension currently in deferral, I will also be claiming Housing Benefit (and Council Tax reduction).

I am aware that although technically the UC, state pension, and HB are overlapping benefits there are provisions that generally prevent them from affecting each other in the UC 'run-on'.
Although if any SP or HB is actually paid during that final AP then they will take it into account and deduct from UC as usual.

In my particular case the UC AP will end 13th March with payment on the 20th, my first HB payment should be 23rd March, and first SP payment no earlier than 26th March.

That leaves a question mark over my deferred workplace pension, which I'm thinking of leaving deferred until the 9th April 2026 so that it will have been deferred for a full tax year.
(As well as the weekly increases while in deferal there is an extra increase for a full year, which reading between the lines means a full tax year and not just 12 months).

Because I will have reached SPA on 26th Feb the still-deferred pension should from that date be counted as 'Notional Income' for benefits purposes.

For the new pension age HB claim (and the revised CTR) I can see that will be the case.

However what I can't find any information on is whether UC will treat it as being Notional Income from SPA until the end of the AP on 13th March?
Or do they just ignore it like they do with State Pension that hasn't paid anything before the AP end?

Does anyone have any experience (or links to information) about that point?

NedS

If you didn't defer the workplace pension, but instead chose to take it at SPA, when would you receive your first payment? I.e, would you receive it in advance on 26th Feb or would it be paid in arrears on 25th March (or maybe end of March) and beyond the AP ending date of 13th March when the UC claim has ended.

In other words, UC should treat as notional income the income you would have received had you taken the pension from SPA. If you wouldn't have received the pension income until after 13th March when your UC claim is closed, there is no notional income to consider. Hence, depends if the pension is paid in advance or in arrears.

Newcad

The workplace pension has been in deferment since 26 Feb 2025 when I turned 65 so I could have started taking it then with the first payment on the 26 Feb 2025, but if I had done that then UC would just deduct £ for £.

The same would apply if I now commenced it on 26th Feb 2026, the payment would simply be deducted £ for £ from that last run-on UC payment in March.

The point is that if I leave it in deferment until April then the DWP/UC are normally supposed to treat it as Notional Income from SPA onwards until it is commenced and becomes real income - but do they actually do that for the UC run-on AP.

I admit it's a fairly esoteric question as it will only ever happen with a UC claimant who has deferred a private/workplace pension until reaching SPA. Which is probably why there isn't much written about it.

It's probably one of those policy things that isn't legislated.

PS. I might ask my WC at my next WFI, but I'll bet that if I do she hasn't got a clue.

NedS

As I said, they can only treat as notional income that would have been received had you taken it (and not deferred) at SPA. So if the pension normally pays in advance then there would have been income and therefore notional income, whereas if the pension pays one month in arrears there would not have been any income in the final AP so there cannot be any notional income either by way of ongoing deferment.

Your WC will not know the answer. If you declare the deferred pension, it would have to go to a decision maker to decide if notional income should apply, and they would want to know if the scheme pays at the start of the period or the end of the period (in arrears) to decide if notional income applies. Note that for some pension schemes, you can select whether you receive payments in advance or in arrears.

Regarding State Pension - any State pension paid (received) in the AP will be deducted pound for pound from that last AP. So if your birthday falls right at the beginning of the AP, although the UC entitlement runs to the end of the AP, any UC would likely be nilled or significantly reduced by the amount of state pension received, whereas if the birthday falls late in the AP, there would be far less state pension to take into consideration.

HillStreetBlues

I agree with @NedS it can only be NI if was was due to be paid in the AP. 
If you claimed on the 26th Feb, if payment would have been 1-18 later then there would be a NI
If you claimed on the 26th Feb and payment would be 19 days or later there in no IN

Yamor

The HB is not income for UC purposes anyway.

The SP is income for UC, and should really be taken into account for the last AP even if it only gets paid later. However, DWP seem in practice to ignore it as long as it isn't paid during the AP itself. If they do take it into account, it'll be on the basis set out in reg. 73(2A), not £-for-£ based on what is received during the AP.

The deferred workplace pension is clearly not actual income. As regards notional income, as has been stated above, it can only be counted as notional income from the AP in which you would expect to start receiving payments had you made an application for it upon turning pension age. As this would almost certainly have been after the end of your UC claim, it should be fine.

pmduk

Newcad said:

PS. I might ask my WC at my next WFI, but I'll bet that if I do she hasn't got a clue.

You're better off asking your Case Manager, Work Coaches have little involvement in this area.

Newcad

Thanks all,

We seem to generally agree in our thinking that, although not strictly in line with legislation, the DWPs current policy during that final extended UC AP is:

• SP is ignored if not actually paid in the final UC AP.
• Notional Income from a non-state pension is also ignored if not actually paid during that final UC AP.

With it being policy and not legislated then it isn't written anywhere that you could point to.
(It's a point of view also alluded to in a rightsnet discussion about reaching SPA, the way it was put there is that the UC account will be closed at the end of that final AP, and it is no-one’s job to re-open it when arrears of SRP, or anything else, get paid later).

So as it stands It looks like I will be lucky with how my AP and SPA dates happen to fall.
By my reckoning then between the 20th and the end of March 2026 I should get a months UC, 4-weeks SP, and 4 weeks HB. (That should only be partial HB because HB and CTR should take account of the Notional Income).
Followed on the 9th April by a months worth of workplace pension (less tax) if I commence it on 9th April as I am planning to do.

If I remember then I'll update this thread with whatever actually happens.