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More on personal pensions . . . .

Nader
Nader Member Posts: 51 Courageous
edited May 2019 in Universal Credit (UC)
Hi all
Some advice would be appreciated:

If I have a personal pension which matures at age 60, but I have access to it at age 55 if I choose, how would this affect my Universal credit entitlement? I've been looking at the 'decision makers' pdf on the subject and, unless I've missed something on there, it isn't very clear to me. 
To try and make it a bit more clear, as an example, lets say at 55 I choose not to access it, and choose to wait until 60 to get maximum benefit from the fund, will DWP consider it as capital at age 55? Or will they, at age 55, take the amount in the fund and consider it as 'notional income', even though I'm not obliged to access it?

I hope what I've asked makes sense. If not please advise and I will try and clarify.

Thank you.

Comments

  • woodbine
    woodbine Member Posts: 7,487 Disability Gamechanger
    It won't be counted as anything until you reach state pension age, unless you decide to access it before then, you say it matures at 60, depending on the type of pension they may well allow you to keep it invested until then.
    Be extra nice to new members.
  • Nader
    Nader Member Posts: 51 Courageous
    Hi Woodbine Thanks very much for that. Great help! Nader
  • wilko
    wilko Member Posts: 2,452 Disability Gamechanger
    The trouble is as you will be able to draw on your pension fund then this will be counted as income. You may take the 25% tax free but this will alter your savings limits for claiming, receiving benefits. Can you defer taking your pension till state pension age a free pension check looks to be in order here to get yourself a good deal and still claim your benefits. 
  • Nader
    Nader Member Posts: 51 Courageous
    Thanks Wilko. 
    I was wondering about all that regarding 'notional income'! I had already decided to get some advice on this particular aspect of the pension situation. I have a pension adviser.
    Thanks so much for your input.
  • Adrian_Scope
    Adrian_Scope Posts: 8,595 Scope online community team
    Hi @Nader, please let us know how you get on with this and what they advise you. :smile:
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  • Nader
    Nader Member Posts: 51 Courageous
    Hi Adrian
    Actually I'm not sure how much they will know relating to UC etc. I've been reading the UC decision maker's guidance on unearned income and also asking advice from another source, and I'm not too clear on it. 

    My understanding thus far is that until I reach Pension Credit qualifying age, what I have in my personal pension pot will not be taken into account for UC purposes as long as I don't drawdown from it; either a lump sum or regular amounts. 
    Is this correct?
  • Adrian_Scope
    Adrian_Scope Posts: 8,595 Scope online community team
    Hi @Nader
    Sorry for the delay in replying to you, it's quite a minefield and the guidance isn't particularly clear. 
    However, you are correct that if you don't touch it, it is disregarded until state pension age. If you draw any before pension age it will be counted as capital not income. 
    I hope that helps!
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  • Nader
    Nader Member Posts: 51 Courageous
    Hi Adrian
    No worries about the delay. I'm just grateful for your advice. 

    That's a great help, thank you! It has cleared up my main concern about the whole thing.

    Have a great weekend!:)

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