pension credit & savings

mark@epicswap

A couple I know (woman 59, man 63) are about to start claiming pension credit. From what I can gather, the pension credit is £167 per week per couple. They have a small private pension and this amount will be taken off the £167.

Also savings are taken in to account: they think that up to £6000 of savings has no effect on the pension credit, but savings over this start to reduce the amount they will receive (about £20 per week reduction for every £10k over the £6k ??).
So I wonder if it would be a good idea for them to give any savings over £6000 to their daughter as a gift. (The daughter could then 'treat' them occasionally!) Anyway I just wonder if this is legal!?

nellietheel

mark&#64 wrote: »

A couple I know (woman 59, man 63) are about to start claiming pension credit. From what I can gather, the pension credit is £167 per week per couple. They have a small private pension and this amount will be taken off the £167.

Also savings are taken in to account: they think that up to £6000 of savings has no effect on the pension credit, but savings over this start to reduce the amount they will receive (about £20 per week reduction for every £10k over the £6k ??).
So I wonder if it would be a good idea for them to give any savings over £6000 to their daughter as a gift. (The daughter could then 'treat' them occasionally!) Anyway I just wonder if this is legal!?

The predecessor to Pension Credit, Minimum Income Guarantee, penalised people for having savings over a certain limit in the way you describe. While there is still the same 'penalty' there is also a bonus with Pension Credit, because having savings over £6000 also attracts extra money in the form of the Savings Credit, as will their private pension.

I found the best way to work it out for my parents was to use the Calculator on the official government website;
http://www.thepensionservice.gov.uk/pensioncredit/calculator/home.asp

If the couple gave money away it could still be taken into account in their assessment, so try the calculator with the true figures first.

sce37

To apply for the savings credit element of pension credit at least one member of the couple must be 65 or over.
Giving money to family may be seen as deprivation of capital and could be taken into account when calculating the benefit entitlement.

Lazy_Ike

mark&#64 wrote: »

Also savings are taken in to account: they think that up to £6000 of savings has no effect on the pension credit, but savings over this start to reduce the amount they will receive (about £20 per week reduction for every £10k over the £6k ??).

The first part is correct, savings up to £6000 has no effect on the amount received. There is a reduction in the award of £1 per week for every £500, or part thereof, in excess of £6000.
Quoting from "A Guide to Pension Credit"
"SPCR 21 & 22
Notional capital is capital you do not actually have but are treated
as having.
We may treat you as having notional capital if you have got rid of
capital to get Pension Credit or to get more Pension Credit – for
example, if you knew you had too much money to get Pension Credit
so gave some to your grandchild."
When application is made, bank statements have to be submitted.
[To apply for the savings credit element of pension credit at least one member of the couple must be 65 or over.]
SCE37 is correct regarding the above.

[Deleted User]

I applied for the pension credit as it says on the advert "it is there for you" and I receive a total of 10pence per week. I am disabled and a widow so every 10p helps. It is sent to me every 13 weeks £1.30 and I like to spash out on something nice !!
I have savings of around £1200.00 towards my funeral expences so my kids won't have to find the cash when the time comes.
Seriously though that 10p means that my council tax is paid so although it's not a lot it means I haven't got to find £900.00 per year for that.So I'm not complaing ,life could be a lot worse I guess.

sce37

Jackie O - do you also receive DLA (as you are still under 65)? If not have you considered applying for it as you say you are disabled. If you are awarded the middle rate care component you may be entitled to higher levels of Pension Credit if you live alone and nobody receives Carers Allowance.

[Deleted User]

sce37 wrote:

Jackie O - do you also receive DLA (as you are still under 65)? If not have you considered applying for it as you say you are disabled. If you are awarded the middle rate care component you may be entitled to higher levels of Pension Credit if you live alone and nobody receives Carers Allowance.

Yes I receive DLA middle rate for care, and higher rate for mobility. That pays for my motobility car, and whats left over for the petrol. Things could be worse, and I'm not moaning as I'm sure there are folks worse off than me. This damp weather is a b****r though as my joints sieze up like rusty old garden gates.It's just the cost of sending me my 10p every three months that make me chuckle.It's a good job I can laugh about things as there is far too much misery in this world.
Cheers folks from the Medway area

sce37

That's good. Hopefully you are getting the correct rate for pension credit as you are already in receipt of DLA Middle Rate Care Component. That 10p makes all the difference!