Pensions and Learning Difficulties
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LocoLoco
Posts: 420 Forumite
Morning all, I'd appreciate knowing what you guys think about my son's current situation? 
He's 16 and has learning difficulties (as well as other conditions). I was made his DWP appointee when he turned 16 and we're waiting now for the result of his PIP assessment.
I've always been very frugal and saved as much of his money as I could in the hope of making a little nest egg for him for the future. I wasn't aware previously that his intellectual disability means he can't make a will (and I can't make one for him) and I discovered when I was looking into things that any money in my son's estate when he passes would automatically go to his dad or his father's other children. He doesn't know his dad as there's been no contact since he was a baby and he's never met his half sisters so I felt rather miffed to discover that money my son has because of all my years of saving and going without might go to them at some point in the future. I posted on here for advice at the time and people were very helpful; the general consensus was to focus on creating good memories instead and use the money for that, which I have been doing
Anyway, my point for posting today is that I've just realised my son also has a small pension that I've put a small amount of his DLA into each month for the last few years. My thinking was that it would just mean he has a little bit of extra cash to top up a state pension in his later years. I've been reading a report about people with learning difficulties having a lower life expectancy than people without and it got me thinking about his passing again, and now I'm wondering if I'm daft putting money into a pension for him and if I should stop and cash in what's there (I think it's about £1,000 if I cash it out).
I just wondered what others think? Am I better off forgetting about longer term savings where he's concerned or do you think a little top up would be useful? Many thanks for any responses
He's 16 and has learning difficulties (as well as other conditions). I was made his DWP appointee when he turned 16 and we're waiting now for the result of his PIP assessment.
I've always been very frugal and saved as much of his money as I could in the hope of making a little nest egg for him for the future. I wasn't aware previously that his intellectual disability means he can't make a will (and I can't make one for him) and I discovered when I was looking into things that any money in my son's estate when he passes would automatically go to his dad or his father's other children. He doesn't know his dad as there's been no contact since he was a baby and he's never met his half sisters so I felt rather miffed to discover that money my son has because of all my years of saving and going without might go to them at some point in the future. I posted on here for advice at the time and people were very helpful; the general consensus was to focus on creating good memories instead and use the money for that, which I have been doing
Anyway, my point for posting today is that I've just realised my son also has a small pension that I've put a small amount of his DLA into each month for the last few years. My thinking was that it would just mean he has a little bit of extra cash to top up a state pension in his later years. I've been reading a report about people with learning difficulties having a lower life expectancy than people without and it got me thinking about his passing again, and now I'm wondering if I'm daft putting money into a pension for him and if I should stop and cash in what's there (I think it's about £1,000 if I cash it out).
I just wondered what others think? Am I better off forgetting about longer term savings where he's concerned or do you think a little top up would be useful? Many thanks for any responses
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Comments
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I'm sorry but i know preparing for your future is one thing but thinking about your child "passing" he's only 16.....seriously? Sorry but let your son have a life at least. Just my thoughts.....0
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poppy12345 wrote: »I'm sorry but i know preparing for your future is one thing but thinking about your child "passing" he's only 16.....seriously? Sorry but let your son have a life at least. Just my thoughts.....
Thank you for your thoughts. There was a fairly lengthy period when he was thought to be terminally ill. So no, I didn't want to be thinking about his 'passing' but some people do die young and for a long time it seemed like he might be one of them. I'm not quite sure how you think my putting some money to one side for him is stopping him from having a life. He's completely unaware and it's a small monthly amount so it doesn't stop him from doing anything else. As I'm the only person that can manage his money for him at the moment it makes sense to me to make sure things are arranged as well as possible because there's no guarantee I'm going to be around much longer.0 -
I never said preparing for his future was stopping him from having a life. More to the point of you thinking of his passing isn't a great thought to have. Sorry, just my views that's all.Thank you for your thoughts. There was a fairly lengthy period when he was thought to be terminally ill. So no, I didn't want to be thinking about his 'passing' but some people do die young and for a long time it seemed like he might be one of them. I'm not quite sure how you think my putting some money to one side for him is stopping him from having a life. He's completely unaware and it's a small monthly amount so it doesn't stop him from doing anything else. As I'm the only person that can manage his money for him at the moment it makes sense to me to make sure things are arranged as well as possible because there's no guarantee I'm going to be around much longer.0 -
I think you are right to consider his long term future. Are you sure you have had the correct legal advice that your son cannot make a will? The page here describes how a person without mental capacity can make a will: https://www.druces.com/making-a-will-for-someone-who-lacks-mental-capacity/
You might be able to get around the issue by creating a trust and nominating different beneficiaries. This is not an area I know anything about and you really need specialist advice. Effectively your son would be putting his own money into the trust and appointing the trustees. Whether he has the capacity to do this, and whether such "self- settled" trusts are allowed in the UK are questions that need the specialist knowledge.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0 -
" I'm wondering if I'm daft putting money into a pension for him and if I should stop and cash in what's there (I think it's about £1,000 if I cash it out)."
You won't be able to take money out of the pension. Because of the tax advantages, it can only be used for a pension. Currently the earliest it can be accessed is at age 55 (this age is set to increase).
Unless you intend to put substantial amounts in to a pension for him, I'd be inclined not to put more in. It may be that a small personal pension would only serve to reduce any means-tested state retirement provision, so your son may be little better off (however, it has to be said that in setting the New State Pension just above the current Pension Credit level the government are attempting to make pension saving advantageous for earners).
As a very rough rule of thumb, you might expect growth in real terms of 3-5% a year, so that £1k may be worth (in today's prices) around £5k when he is 60. To achieve that growth it would be necessary to be invested in equities - the Vanguard range of world stock market tracker funds may be suitable, if you can assess them through the pension platform.
Deciding on the options for a pension scheme on retirement is quite complicated, as your son has learning difficulties I just wonder if he would be able to use it to it's best financial advantage.
For those reasons, I would not tend to fund a pension for him.Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.0 -
I do think there is merit in building up some savings for him to act as a cushion and an emergency fund in future years.
However be mindful of the capital limits for benefits. Anything up to £6k is fine.
Saving too much may reduce or stop any future means-tested benefits.
PIP (and DLA) are there to cover the costs of disability. I would tend to the view of using this money to help make his life as enjoyable and as rich in experience and love as you are able. (Your point about memories).
Unfortunately there isn't much financial advice available for people like your son. The Money Advice Service may be worth a call - https://www.moneyadviceservice.org.uk/en.
I wonder whether a local Credit Union may be worth considering.
https://www.findyourcreditunion.co.uk/about-credit-unions/Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.0 -
Alice_Holt wrote: »" I'm wondering if I'm daft putting money into a pension for him and if I should stop and cash in what's there (I think it's about £1,000 if I cash it out)."
You won't be able to take money out of the pension. Because of the tax advantages, it can only be used for a pension. Currently the earliest it can be accessed is at age 55 (this age is set to increase).
Unless you intend to put substantial amounts in to a pension for him, I'd be inclined not to put more in. It may be that a small personal pension would only serve to reduce any means-tested state retirement provision, so your son may be little better off (however, it has to be said that in setting the New State Pension just above the current Pension Credit level the government are attempting to make pension saving advantageous for earners).
As a very rough rule of thumb, you might expect growth in real terms of 3-5% a year, so that £1k may be worth (in today's prices) around £5k when he is 60. To achieve that growth it would be necessary to be invested in equities - the Vanguard range of world stock market tracker funds may be suitable, if you can assess them through the pension platform.
Deciding on the options for a pension scheme on retirement is quite complicated, as your son has learning difficulties I just wonder if he would be able to use it to it's best financial advantage.
For those reasons, I would not tend to fund a pension for him.
That's enormously helpful, Alice, thank you so much. I won't be putting substantial amounts in, unfortunately, so yes, it looks like it might be better for me to stop paying in to it now. Thank you so much for taking the trouble to explain all of that, I do appreciate it.0 -
Alice_Holt wrote: »I do think there is merit in building up some savings for him to act as a cushion and an emergency fund in future years.
However be mindful of the capital limits for benefits. Anything up to £6k is fine.
Saving too much may reduce or stop any future means-tested benefits.
PIP (and DLA) are there to cover the costs of disability. I would tend to the view of using this money to help make his life as enjoyable and as rich in experience and love as you are able. (Your point about memories).
Unfortunately there isn't much financial advice available for people like your son. The Money Advice Service may be worth a call - https://www.moneyadviceservice.org.uk/en.
I wonder whether a local Credit Union may be worth considering.
https://www.findyourcreditunion.co.uk/about-credit-unions/
Thank you for this as well, Alice, yes, the point about making happy memories was made by another poster on here when I asked for some advice a while ago and it's what I've been working on. Spending rather than saving is a new experience for me so I've had to adapt! Thank you for those links, very helpful and I will read through later on. Thank you again.0 -
I think you are right to consider his long term future. Are you sure you have had the correct legal advice that your son cannot make a will? The page here describes how a person without mental capacity can make a will: https://www.druces.com/making-a-will-for-someone-who-lacks-mental-capacity/
You might be able to get around the issue by creating a trust and nominating different beneficiaries. This is not an area I know anything about and you really need specialist advice. Effectively your son would be putting his own money into the trust and appointing the trustees. Whether he has the capacity to do this, and whether such "self- settled" trusts are allowed in the UK are questions that need the specialist knowledge.
Thank you for that, Tacpot, I will read up on that later, it's complicated, isn't it? I've got a trust fund set up that I organised with Mencap which is for money I can leave him when I die (which is then managed by their trustees) but I don't think his own money can be put into it. I will dig the paperwork out and read through it again. Thank you for your response, I appreciate it 0 -
poppy12345 wrote: »I never said preparing for his future was stopping him from having a life. More to the point of you thinking of his passing isn't a great thought to have. Sorry, just my views that's all.
Saying "let your son have a life at least" suggests you think there's some way I'm not doing that. It's difficult to think of anything but your child dying when they may be terminally ill. I agree, it isn't a great thought to have and I'd love never to have had it, but we aren't all lucky enough to enjoy good health and to avoid thoughts of premature death. He will die one day, as we all will, and as he lacks capacity it's my responsibility to make sure his finances are as well managed as possible, and to make sure he always receives the help he needs. I would love for that not to be the case but that's how it is and I'm very aware that I somehow need to provide for him after I'm dead. It's not an easy topic to deal with or broach and trust me when I say the last thing in the world I want to be doing is wondering what will happen to my learning disabled son when I'm no longer around. Provision needs to be made, I'm on a limited income and I want to do the best I can by him. His situation has changed since I set that pension up, hence my question about whether or not it is a good idea to keep it going.
Thank you so much to those who gave information and further advice, it's very much appreciated.0
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