Benefits and state pension.

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elljay
elljay Posts: 1,010 Forumite
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in Benefits & tax credits
An elderly friend of mine wants to give some money to one of her children who is in her early 60s, and who has never worked and always been on benefits. My friend is concerned that her offspring has never paid NI so wouldn't get a state pension so wants to give them money to save towards that eventuality. I tried to reassure her but not sure myself exactly what sort of amounts they would get. Presumably if on benefits now, they will continue being on benefits so not really any worse off - even if the benefits are called something else.

I think they're on PIP and ESA now and will reach state pension age in I think about 5 years.

Thanks for any advice I can pass to my friend.

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  • borkid
    borkid Posts: 2,475 Forumite
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    They could lose their entitlement to ESA if she gives them money over a certain amount. I am fairly sure they will be credited with contributions for SP if they are on IR ESA.
  • Ames
    Ames Posts: 18,459 Forumite
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    They get NI credits towards a pension when on ESA. They would have got them if They were on incapacity benefit before. He'll get a pension, it's possible to get a statement showing his records but I'm not sure which website you do it throug1h.

    A large sum of money (over 16k) would mean they weren't entitled to means tested benefit and would have to live off the gift. They wouldn't be able to save it.

    If it ran out before they reached state pension age they'd have to go on universal credit instead of ESA and would probably be worse off.

    It's a really bad idea.
    Unless I say otherwise 'you' means the general you not you specifically.
  • molerat
    molerat Posts: 31,944 Forumite
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    elljay wrote: »
    My friend is concerned that her offspring has never paid NI so wouldn't get a state pension
    No point in guessing.
    https://www.gov.uk/check-state-pension
  • elljay
    elljay Posts: 1,010 Forumite
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    Thank you. Yes my friend was thinking of well over £16k. I can't see someone else's pension entitlement amount via the website but you have all confirmed that just because someone hasn't worked doesn't mean they wont get the state pension. I don't know if disability benefits continue but if they get state pension then ?pension credit on top they should be ok, or at least, as ok as they are now.

    My friend was worried that her child wouldn't get anything not having paid in all their life. I know she has always helped out financially but has been worried about when she's gone. Probably best just to ensure her will is clear for now.

    I'll pass this info on to her. Thank you again.
  • Mojisola
    Mojisola Posts: 35,559 Forumite
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    molerat wrote: »
    No point in guessing.
    https://www.gov.uk/check-state-pension
    elljay wrote: »
    I can't see someone else's pension entitlement amount via the website

    I'll pass this info on to her.

    Quite rightly, too!

    The person concerned needs to apply for a state pension forecast - the mother can then make decisions about gifting money based on that knowledge.
  • elljay
    elljay Posts: 1,010 Forumite
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    Mojisola wrote: »
    Quite rightly, too!

    The person concerned needs to apply for a state pension forecast - the mother can then make decisions about gifting money based on that knowledge.

    Thanks. They may already have done so. Mother doesn't want to discuss the possibility of giving the money to them yet without knowing a bit more for herself. They are not very good with money so mother wanted to ensure it went towards everyday living during old age and not all blown on an expensive cruise etc! However you have all now confirmed that they will get a pension/enough to live on anyway. That being so, I think she plans to ensure all her children get equal amounts in her will.

    EJ
  • xylophone
    xylophone Posts: 44,518 Forumite
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    That being so, I think she plans to ensure all her children get equal amounts in her will.

    She should bear in mind that any bequest received by the offspring on means tested benefits could well affect his entitlement to them.
  • Mojisola
    Mojisola Posts: 35,559 Forumite
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    elljay wrote: »
    However you have all now confirmed that they will get a pension/enough to live on anyway.

    That depends on what benefits were being claimed.

    A pension forecast is essential before major decisions are made.
  • teddysmum
    teddysmum Posts: 9,474 Forumite
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    Before physically giving money away (not just accounting for it in a will),your elderly friend must make sure that she has sufficient for any care that she may personally need.
  • WhenIam64
    WhenIam64 Posts: 1,052 Forumite
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    They are not very good with money so mother wanted to ensure it went towards everyday living during old age and not all blown on an expensive cruise etc!

    Another alternative given the age of the "child" is to purchase an annuity which would convert any lifetime sum into a private pension. That would top up any state pension or pension credits that may be available when the child reaches their retirement age. You can check the retirement age on the Gov website

    ** Any financial product such as an annuity should only be purchased after taking professional advice
    Unlike some here, I am not omniscient. If I am wrong correct me. I won't take offence.

    The law is like an ocean - have a swim but don't drown.
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