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What am I allowed to spend my savings on while on Pension Credit?

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mmc1978
mmc1978 Community member Posts: 8 Listener
I'm on Pension Credit, joint claim with my wife.  We both get AA also so we get SDP and Carers.  As I cant really go out my savings are increasing and now Pension Credit are going to do a review.  I will be over the savings limit.  What am I allowed to spend my savings on while on Pension Credit that is acceptable to DWP and won't reduce my PC?  Can I buy a car for example or give money to family?

Comments

  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited November 2021
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    First thing to check is that you do know the capitalrules for a Pension Credit. There is no absolute savings limit for Pension Credit. If your joint savings are over £10,000 then Pension Credit will reduce by £1/week for every £500, or part thereof, over £10,000. Do you mean that your savings are about to go over £10,000?
    mmc1978 said:
    We both get AA also so we get SDP and Carers.  
    Is one of you claiming Carer’s Allowance for looking after the other?

    To answer the question about spending money, you can use it on things that are reasonable, buying a car is reasonable if you need one. Giving it away I see not acceptable and you would be treated as if you still had the money you have given away. Small gifts for birthdays or a Christmas would be OK.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • mmc1978
    mmc1978 Community member Posts: 8 Listener
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    Thanks for this, so if we had £24k would this mean that I would be deemed to be earning £28 a week and therefore my PC would reduce by £28 a week then or would it have a bigger effect than that?
  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited November 2021
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    Yes that’s right. £24,000 would reduce PC by £28/week. Provided you remain entitled to some guarantee Pension Credit you retain entitled to maximum Housing Benefit and Council Tax Reduction (if you are claiming those).
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • mmc1978
    mmc1978 Community member Posts: 8 Listener
    edited November 2021
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    Yes we claim CA for looking after each other.  I have been really worried today that this would have a big effect on my source of income but you have put my mind to rest that it should not be too bad.  The money has just accrued and I didnt know about the savings limit.  
  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited November 2021
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    Got it. You both claim CA but presumably it is not in payment because you each get State Pension and therefore your Pension Credit can still include double Severe Disability Addition and carer premiums. I can see how your savings might accumulate in that situation.

    Once you go over £10,000 you do need to keep Pension Credit informed about your savings so that they can revise your Pension Credit accordingly. If you have been over £10,000 for some time then you are likely to need to provide bank statements going back in time and they will recalculate your entitlement on a week by week basis. You willing then owe them for any overpayment that has occurred. You may also be charged a small penalty for not keeping DWP informed.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • mmc1978
    mmc1978 Community member Posts: 8 Listener
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    Yes that sounds right.  I was concerned that the savings was going to take all this away but it appears the worst case scenario here is that it will reduce our PC by approximately £28 per week?
  • poppy123456
    poppy123456 Community member Posts: 56,976 Disability Gamechanger
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    If you've been over the savings amount and didn't report it, you will also have an overpayment which will need to be repaid back, so this will reduce pension credit further.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited November 2021
    Options
    If you've been over the savings amount and didn't report it, you will also have an overpayment which will need to be repaid back, so this will reduce pension credit further.
    Plus possibly a penalty charge as mentioned in my previous post.
    They could presumably choose to pay in one go and thereby reduce the savings.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
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