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PIP and Pension contributions

bawn245

My daughter has switched to PIP from DLA. The question I ask is how do I set up up a pension contribution so she qualifies on retirement age. She is 32 and has never worked.

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Comments

wilko

@bawn245, hello and welcome to the community, is your daughter claiming or can claim ESA if she can due to her disability preventing her from working her NI contributions will be paid for her. Have a word with your local CAB. Or maybe if you can afford to pay it on your daughters behalf you could ring DWP or the Government pension service for advice. Glad you are being proactive thinking of the future for your daughter.

Chloe_Alumni

Hi @bawn245 and a warm welcome to the community! I hope you get the answers that you are looking for!

Yadnad

bawn245 said:

My daughter has switched to PIP from DLA. The question I ask is how do I set up up a pension contribution so she qualifies on retirement age. She is 32 and has never worked.

I take it that your daughter is completely off the DWP radar? Never worked and never claimed any benefits. Is she a single mum with children?
Unfortunately this situation is all too common if you decide not to claim benefits that give rise to contributions. It is only years down the line when they find out that they will have very little to live on at retirement time.

If my assumptions are correct then she needs to contact the DWP in order to investigate what contributions she should be buying now and what the cost will be in order to protect her future down the line.

People will be surprised how many actually drop out of the system by choice. One in my family did as according to their records he had never worked in his life. He had but only for himself and earning just enough to survive on and way below what he would have received from the welfare state, below the level of national insurance contributions level and below the level of paying tax. His income was in today's money £20 - £30 a week. He had no housing costs etc as he owned an inherited 10 acre small holding - you could say that he lived off the land and by bartering with his neighbours.

When he retired he received no state pension until when he became 75 when he received a small state pension.
Yet he was a survivor of the horror of WW1 having been gassed on the front line and discharged as unfit.

BenefitsTrainingCo

bawn245,
As others have suggested, I think you need to look at what other benefits your daughter could claim. For example, she may be entitled to income-related ESA or Universal Credit (which she claims will depend on what area of the country she lives in).

If she has limited capability for work, then she'll get national insurance credits. The test for limited capability for work can be carried out in income-related ESA or Universal Credit, and it's also possible to make what is called a 'credits only' claim for ESA (this might apply if she has savings in her own right of more than £16,000 - too high for her to get income-related ESA or UC).

So, whatever you do, I would not advise your daughter to purchase national insurance contributions for the future, as it may not be necessary. She may be entitled to credits on the basis of limited capability for work, and these credits will count towards state retirement pension in the future. Credits for limited capability for work can be claimed by the end of the year following the tax year in which you are entitled, so she may even be able to get backdated credits if she can show that she wasn't able to work.

Of course there is likely to be a gap further back in the past, and it is worth asking the DWP for an estimate of how much it would cost to fill the gap. All this assumes she's not claimed a benefit because she can't work before. DLA and PIP are benefits for the extra costs of disability. They are not connected to whether or not someone can work. It's only ESA and UC that have a test about limited capability for work.

Finally, all of this is separate to setting up a personal pension contribution, which of course you may want to do. If she gets a personal pension, this will be taken into account in the future for income-related benefits (pension credit, or whatever equivalent exists by the time your daughter is of state pension age).

Will