Moving from living off private pension to state pension

mad_mike

I have long-term health issues and have effectively retired early (63). I fortunately have a private pension which I am using to pay my rent and bills (I am not a homeowner). When I am 67 I can claim my state pension. Hypothetically, could I stop/reduce withdrawing funds from my private pension and instead claim Housing Benefit? I know their are rules about deprivation of capital etc but if my total 'savings' are under £5k (as they usually are) would I be doing anything wrong/illegal? 

Spoonie_Turtle

Your private pension will be counted as income whether you take it or not.

I don't know if there are disability premiums in Housing Benefit or whether it's just Pension Credit, so it would be worth checking with a benefits calculator just in case, to make sure you don't accidentally miss out on anything.

mad_mike

I thought that pensions are disregarded in benefit calculations?

So, my alternative is to just continue drawing down on my pension until it's used up or I've left this earth and then make a claim for HB?

Rubyroobs

mad_mike said:

I thought that pensions are disregarded in benefit calculations?

So, my alternative is to just continue drawing down on my pension until it's used up or I've left this earth and then make a claim for HB?

Pensions are classed as income. So any housing benefit claim would look at private pensions, state pension amount and savings.

Robbie64

Are you asking about claiming Housing Benefit before you reach State Pension age? if so, you won't be able to claim HB as it has now been replaced by Universal Credit.

mad_mike

Robbie64 said:

Are you asking about claiming Housing Benefit before you reach State Pension age? if so, you won't be able to claim HB as it has now been replaced by Universal Credit.

That's not what I'm asking.

And yes, if you are under state pension age you cannot claim HB.

Blancmang25

mad_mike said:

I have long-term health issues and have effectively retired early (63). I fortunately have a private pension which I am using to pay my rent and bills (I am not a homeowner). When I am 67 I can claim my state pension. Hypothetically, could I stop/reduce withdrawing funds from my private pension and instead claim Housing Benefit? I know their are rules about deprivation of capital etc but if my total 'savings' are under £5k (as they usually are) would I be doing anything wrong/illegal? 

I am presuming from your post you are taking lump sums from your pension and using this to live on?
Hb regs are very complex.
You can have savings from £6000 - £16000 but a tariff income will be taken from anything over £6000(£1per week, per £250 or part of if memory serves me correct).
If you do not take your private pension when you become entitled to take it(monthly) then hb can take this into account as income, as you are basically depriving yourself of the income.
You will need to declare the private pension when/if you make a claim for hb, regardless of whether you take it or not.
As you have long term health conditions can you not claim New Style Employment Support Allowance?

Northern_Wanderer

Spoonie_Turtle said:

I don't know if there are disability premiums in Housing Benefit or whether it's just Pension Credit, so it would be worth checking with a benefits calculator just in case, to make sure you don't accidentally miss out on anything.

Yes there are but OP would need to be in receipt of a disabilty benefit.

Northern_Wanderer

Blancmang25 said:

mad_mike said:

I have long-term health issues and have effectively retired early (63). I fortunately have a private pension which I am using to pay my rent and bills (I am not a homeowner). When I am 67 I can claim my state pension. Hypothetically, could I stop/reduce withdrawing funds from my private pension and instead claim Housing Benefit? I know their are rules about deprivation of capital etc but if my total 'savings' are under £5k (as they usually are) would I be doing anything wrong/illegal? 

As you have long term health conditions can you not claim New Style Employment Support Allowance?

They may be able to claim that but pension income (not lump sums) above £85/ week will reduce the benefit paid. If they don't qualify they could do a "Credits Only" claim to keep getting NI contributions towards state pension, if those are needed to top up years.

mad_mike

Blancmang25 said:

mad_mike said:

I have long-term health issues and have effectively retired early (63). I fortunately have a private pension which I am using to pay my rent and bills (I am not a homeowner). When I am 67 I can claim my state pension. Hypothetically, could I stop/reduce withdrawing funds from my private pension and instead claim Housing Benefit? I know their are rules about deprivation of capital etc but if my total 'savings' are under £5k (as they usually are) would I be doing anything wrong/illegal? 

I am presuming from your post you are taking lump sums from your pension and using this to live on?
Hb regs are very complex.
You can have savings from £6000 - £16000 but a tariff income will be taken from anything over £6000(£1per week, per £250 or part of if memory serves me correct).
If you do not take your private pension when you become entitled to take it(monthly) then hb can take this into account as income, as you are basically depriving yourself of the income.
You will need to declare the private pension when/if you make a claim for hb, regardless of whether you take it or not.
As you have long term health conditions can you not claim New Style Employment Support Allowance?

So my only option is to continue as I am until the pension is spent, so to speak. Then at state pension age, when I'm in a position of having no pension income or very little pension savings (under £6000) I may qualify for help with housing costs?

I'm not complaining, quite happy to follow the rules. Just looking for advice.

Thanks

Blancmang25

mad_mike said:

Blancmang25 said:

mad_mike said:

I have long-term health issues and have effectively retired early (63). I fortunately have a private pension which I am using to pay my rent and bills (I am not a homeowner). When I am 67 I can claim my state pension. Hypothetically, could I stop/reduce withdrawing funds from my private pension and instead claim Housing Benefit? I know their are rules about deprivation of capital etc but if my total 'savings' are under £5k (as they usually are) would I be doing anything wrong/illegal? 

I am presuming from your post you are taking lump sums from your pension and using this to live on?
Hb regs are very complex.
You can have savings from £6000 - £16000 but a tariff income will be taken from anything over £6000(£1per week, per £250 or part of if memory serves me correct).
If you do not take your private pension when you become entitled to take it(monthly) then hb can take this into account as income, as you are basically depriving yourself of the income.
You will need to declare the private pension when/if you make a claim for hb, regardless of whether you take it or not.
As you have long term health conditions can you not claim New Style Employment Support Allowance?

So my only option is to continue as I am until the pension is spent, so to speak. Then at state pension age, when I'm in a position of having no pension income or very little pension savings (under £6000) I may qualify for help with housing costs?

I'm not complaining, quite happy to follow the rules. Just looking for advice.

Thanks

We can only give you advice, dependant on the information you have given us.

As Northern Wanderer has said you can claim New Style Employment Support Allowance to just have national insurance credits towards your state pension, unless you have enough NI credits to have a full pension.
As some one else has advised you would need a qualifying disability benefit to obtain the disability premium when claiming hb.

It would seem you are happy taking money out of your pension pot to survive until you get your state pension and then claim hb.

Also if you claimed New Style ESA there would be no pension deduction as you are only taking lump sums and it is currently not in payment(monthly etc).
I am presuming you would get contribution based ESA, so your lump sum taken from your pension would not affect this as it is capital/savings.(income related would take savings/capital held)

Please have a look at the New Style ESA and also Personal Independance Payment, as you may be eligible for either or both.

I have put the links for both below:

https://www.gov.uk/guidance/new-style-employment-and-support-allowance

https://www.gov.uk/pip