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More on personal pensions . . . .

NaderNader Member Posts: 47 Connected
edited May 2019 in Universal Credit
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.

Replies

  • woodbinewoodbine Member Posts: 3,707 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.
    my advice is given freely and is correct to the best of my knowledge.
  • NaderNader Member Posts: 47 Connected
    Hi Woodbine Thanks very much for that. Great help! Nader
  • wilkowilko Member Posts: 2,284 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. 
  • NaderNader Member Posts: 47 Connected
    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_ScopeAdrian_Scope Testing team Posts: 7,923

    Scope community team

    Hi @Nader, please let us know how you get on with this and what they advise you. :smile:
    Senior Community Partner
    Scope

    Your feedback is really important to the development of the online community, so please remember to complete our online community annual survey
  • NaderNader Member Posts: 47 Connected
    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_ScopeAdrian_Scope Testing team Posts: 7,923

    Scope 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!
    Senior Community Partner
    Scope

    Your feedback is really important to the development of the online community, so please remember to complete our online community annual survey
  • NaderNader Member Posts: 47 Connected
    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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