U/C and pension savings

itsthelittlethings

Or is she in supported accommodation hence still eligible to claim housing benefit?  If so look into whether the rebate can be disregarded. 

Spoonie_Turtle

Wrinklebonce said:

My daughter has never held a job due to chronic Epilepsy. Therefore has never paid tax. In January of 2025, she was given a backdated rebate from DWP of £20,000. At the time her personal bank account was over the £16.000 limit. (my fault). She applied for and was refused U/C because of excess savings. Then her Housing Benefit was stopped and after an enquiry, they stated because of excess savings, stating £22,000, (bank) but no mention of the rebate sum.

What does this mean?

What exactly was the rebate for?  You've said DWP, but for what?

poppy12345

Wrinklebonce said:

My daughter has never held a job due to chronic Epilepsy. Therefore has never paid tax. In January of 2025, she was given a backdated rebate from DWP of £20,000. At the time her personal bank account was over the £16.000 limit. (my fault). She applied for and was refused U/C because of excess savings. Then her Housing Benefit was stopped and after an enquiry, they stated because of excess savings, stating £22,000, (bank) but no mention of the rebate sum.
Nobody will clarify whether or not this rebate will be held against her indefinitely or can we invest it into a pension fund.
If she 'blows' the lot, it’s classed as 'miss-appropriation' of funds. Dammed if you do and Dammed if you don't.

She didn’t lose them because of the £20,000 that she received. She already had more than £16,000 which means there was no entitlement to any means tested benefits. She may now have a benefits overpayment depending on how long her savings were over £6,000. 

Advice on the pension remains the same. 

Grumpy_chap

Wrinklebonce said:

. At the time her personal bank account was over the £16.000 limit. (my fault). 

What does this mean?

She either had over £16k or she didn't.

She doesn't cease to have the money if it is hidden away in an account in your name.  That would be fraud.

kaMelo

Wrinklebonce said:

My daughter has never held a job due to chronic Epilepsy. Therefore has never paid tax. In January of 2025, she was given a backdated rebate from DWP of £20,000. At the time her personal bank account was over the £16.000 limit. (my fault). She applied for and was refused U/C because of excess savings. Then her Housing Benefit was stopped and after an enquiry, they stated because of excess savings, stating £22,000, (bank) but no mention of the rebate sum.
Nobody will clarify whether or not this rebate will be held against her indefinitely or can we invest it into a pension fund.
If she 'blows' the lot, its classed as 'miss-appropriation' of funds. Dammed if you do and Dammed if you don't.

If she had over £16,000 in capital prior to receiving the 'rebate' then she already did not qualify for any means tested benefit. As she did not have an active claim at the time of receiving this rebate then no disregard will apply to any of her capital.

Putting money into a pension fund is normally okay however there may be two issues in this case. The regulations refer to 'relievable contributions' . As a non earner only £2880 per financial year will receive tax relief, anything exceeding that amount may not be considered 'relievable' as it is not eligible for tax relief. Secondly, the deprivation of capital rule may still apply if, as appears here, the sole/main purpose of moving capital from not being disregarded to a disregarded position is to maintain/increase benefit entitlement. 

Aside from that, it makes no sense to put money that will not attract tax relief into a pension as it will be taxable income on the way out.  

Wrinklebonce

Any suggestions of where to invest for a 'Non Risk' pension plan.(20-25yrs). Just paying in and collecting interest, not invested in stocks and shares ?   Regards WB.

born_again

Wrinklebonce said:

Any suggestions of where to invest for a 'Non Risk' pension plan.(20-25yrs). Just paying in and collecting interest, not invested in stocks and shares ?   Regards WB.

Best ask in the Savings section. Adding amount that you are looking at starting with & adding with. (Approx)

Without getting political what is announced in the Budget may have a effect.

If paying any tax, then ISA is a good option.

kaMelo

Wrinklebonce said:

Any suggestions of where to invest for a 'Non Risk' pension plan.(20-25yrs). Just paying in and collecting interest, not invested in stocks and shares ?   Regards WB.

Many (most?) providers will pay interest on cash balances held within a SIPP but they are pretty poor rates compared to top savings accounts currently available.  Given the time frame you are talking about investing, rather than keeping in cash, would provide a much healthier return as there is plenty of time to ride out any market volatility.

Or, rather than wanting a good return, is this just about moving money to enable your daughter to qualify for means tested benefits?

Grumpy_chap

Wrinklebonce said:

Any suggestions of where to invest for a 'Non Risk' pension plan.(20-25yrs). Just paying in and collecting interest, not invested in stocks and shares ?   Regards WB.

What is the risk that you wish to avoid?
A wholly cash-like investment over a 25 year span is almost certain to fall in value in real terms.  Is such a 'non-risk' approach a risk in itself?