Pensions on benefits

lacey477 Community member Posts: 2 Listener
edited November 2017 in Benefits and income
We are on da and pension credits ,as my husband reaches 65 in Dec 17 he has old age pension to collect plus a private pension of about 40.000 pounds,will this affect our benefits,thankyou


  • Sam_Alumni
    Sam_Alumni Scope alumni Posts: 7,635 Championing
    Hi @lacey477

    I found this information on the standard life website

    What you take from your pension affects how much tax you pay – and could affect any benefits you get from the Government.

    When it comes to taking pension savings, people “should not overlook the implications for their tax credit awards, benefits and overall household income,” says revenue benefits.

    If you get a means-tested benefit such as jobseeker’s allowance, housing benefit, council tax credits, tax credits or pension credit, your pension income, along with any other sources of income such as rent or savings interest, can reduce what you are entitled to.

    Any lump sums or income from your pension that take you over a certain limit could even see you risk losing all State support such as housing benefit, for example. It’s an important issue given that more than one million people age 65 or over get some help with their rent, says

    According to “If you get a lump sum, then this may count towards your savings total – if you’ve over £6,000 of savings it can reduce your benefit, and over £16,000 it can stop it.”

  • Sam_Alumni
    Sam_Alumni Scope alumni Posts: 7,635 Championing
    You can also look at the benefits calculator here.
  • BenefitsTrainingCo
    BenefitsTrainingCo Community member Posts: 2,621 Trailblazing
    Hi lacey477 - the benefits calculator Sam has mentioned above is a really excellent tool for working out how your income and benefits will change now that your husband is nearing 65. He will remain on DLA as long as he satisfies the conditions, and his state and occupational pensions will have no effect on his DLA. However, his new incomes will definitely affect your means tested benefits, such as pension credit and housing benefit. There is no upper savings limit with pension credit like there is with jobseekers allowance, income support and ESA. Instead, the DWP apply something called the 'tariff income rule' to any capital you have above £10,000 (not £6,000 as it says above - that only applies to working age benefits). They assume you get £1 of interest income for every £500 chunk of capital you have over the £10,000 limit. So for example, if his £40,000 pension payout lump sum is the only capital you have, it will be assumed to yield you £60 per week of tariff income, and this would be taken into account when calculating your pension credit. If you have over £16,000 in savings, then you will not be entitled to housing benefit UNLESS you get the guarantee credit part of pension credit. His state pension and any private weekly/monthly pension will also be taken into account in full as income when it comes to calculating means tested benefits. This can all seem a bit bewildering, but the benefits calculator will definitely help, and come back to us with more detail if you would like some further advice. I hope this helps!

  • wildlife
    wildlife Community member Posts: 1,293 Trailblazing
    @lacey477 Just to add to the above if your husband pays tax and you don't then Martin Lewis has info on his moneysavingsexpert website about the "Marriage Allowance where you can transfer £1,150 worth of your tax allowance income that is non taxable to him to up his income limit before he has to pay tax. You have to apply for this as I did the other day. x