Traced a bank account from many years ago that currently has a value in excess of £28,000!!!

2oldcodgers

I have been approached by a family member who to say the least is confused.
Seems that he had been tracing his many lost and forgotten pension providers over the past 40 years or so.
In doing so he found an old pass book from the Leeds Permanent Building Society. The last entry in the book was in 1966. The balance shown was in excess of £28,000.
He has no idea where the bulk of that came from other than to say it may have been an inheritance in 1962 when he was 14. It's quite possible that his now deceased parents deposited it at the time and he knew nothing about it.

He and his wife have claimed Guaranteed Pension Credit since 2013. Obviously he has never told the DWP about this money as he had no idea of it's existence.

Stupid question I know but he is asking me if he should forget all about this money and carry on as before as he wouldn't want to rock the boat with the DWP.

From my searches it seems that the Leeds went bust with Halifax taking over.
Effectively the account would now be closed or dormant. He has moved many times since aged 14 and I doubt that there are no current records kept of this defunct account.
 
My calculations show that all of their Pension Credit payments over the past 10 years would amount to something like £26,000. So in effect almost all of the money in the account should really go to the DWP to repay the benefits that they should not have had. 

poppy123456

I definitely wouldn’t advise them to continue as they are and not report it. Although it has been a long time and they haven’t found out this doesn’t mean they will never find out. 

It’s always better to be honest. 

2oldcodgers

poppy123456 said:

I definitely wouldn’t advise them to continue as they are and not report it. Although it has been a long time and they haven’t found out this doesn’t mean they will never find out. 

It’s always better to be honest. 

I agree, and I know that he is 'kicking himself' for finding the passbook! He can't spend any of the money as to do that I presume he would have to have it transferred into his current bank account which would then show up on a data trawl. Then he would be caught up by the deprivation rules.
I've suggested, tongue in cheek, to burn the book and pretend that he knows nothing about the money or the account which was absolutely true up until a few days ago.

rebel11

This is an innocent 'error', not something that's been done knowingly, yes, the DWP would want the money back with interest (possibly).

But the £28,000, would  / should be claimed back with interest, 56 so you are talking about quite a lot of interest plus the balance in the account. You need explore this first, then see how the numbers stack up.

Look up interest rates on dormant accounts, look for examples, etc.    

poppy123456

I would say it’s highly unlikely DWP would apply interest to any overpayment.

however to advise them to now ignore perhaps isn’t the best advice. 

flour

I presume you've already considered this but in case you haven't.

Are you aware that the pension credit capital rules are quite generous and £28k would lead to a deduction which is less than £26k which is their total payments.

For every £500 in capital above £10'000 they only take of £1 per week off the pension credit.

So if you calculate it on that basis they may find their overpayment to far less and with a £28k windfall to enjoy in their retirement?

They could still keep the majority of their pension credit.

I'm not sure about the finer points of the calculation but another member who knows more about pension credit might be able to help or indeed a welfare rights organisation?

2oldcodgers

flour said:

I presume you've already considered this but in case you haven't.

Are you aware that the pension credit capital rules are quite generous and £28k would lead to a deduction which is less than £26k which is their total payments.

For every £500 in capital above £10'000 they only take of £1 per week off the pension credit.

So if you calculate it on that basis they may find their overpayment to far less and with a £28k windfall to enjoy in their retirement?

They could still keep the majority of their pension credit.

I'm not sure about the finer points of the calculation but another member who knows more about pension credit might be able to help or indeed a welfare rights organisation?

Yes I did knowing that they already have savings between them of over £20,000 at least
Based on that and just looking at the capital figure alone a deduction of another £56 a week which will almost wipe out all entitlement to Pension Credit.

woodbine

Have they checked to see if the money still exist? Could be it was withdrawn and forgotten?

2oldcodgers

woodbine said:

Have they checked to see if the money still exist? Could be it was withdrawn and forgotten?

If it was withdrawn it would/should show up on the passbook. At the moment he is holding fire because if he starts to query the account he then can't argue that he knew nothing about it.
Good point though and I will pass that info on to him.