Pension/universal credit

Jontowey

My partner is my carer she currently works 12hrs a week we get UC I get pip both higher rates and I receive lcwra she is wanting to retire early this year preferably August before her state pension next year and wants to substitute her income with a draw down on a private pension per month to make up the UC loss she gets about £430 per month wages  and the pension would be worth  about£400 per month how would you go about telling UC and what would the Upshot be or downsides to doing this thanks

calcotti

Drawing down a pension will be a waste of money. Unlike earnings any regular pension income is deducted in full from UC. If she takes £400/month of pension income the UC will go down by £400.

Can I check - is she claiming the carer element of UC? If she looks after you for 35 hours/week she is entitled to this - it's worth an extra £168.81/month.

Are you older or younger than her?

Jontowey

I am only 53 and she receives the carer element of uc

Jontowey

Reference to before my partner is struggling with the job and wants to finish early by taking 25%of her pension in a drawdown as substitute for uc

janer1967

I'm no expert but isnt it work income she will be losing rather than uc ? 

@calcotti is the best person to advise 

But I would be interested in the answer , wouldn't uc remain till state pension age 

poppy123456

janer1967 said:

I'm no expert but isnt it work income she will be losing rather than uc ? 

@calcotti is the best person to advise 

But I would be interested in the answer , wouldn't uc remain till state pension age 

It would be both. As Calcotti has advised it’s pointless taking a pension income when claiming UC because it’s deducted £1 for £1. 

Yes UC would continue here until both reached state pension age, unless the state pension and private pension reduces their UC to zero, which can happen depending on circumstances.

poppy123456

Jontowey said:

Reference to before my partner is struggling with the job and wants to finish early by taking 25%of her pension in a drawdown as substitute for uc

It would be pointless taking a pension drawdown for the reasons stated above. 

calcotti

If she stops work your UC will go up if there is currently an earnings deduction applied. However as you will currently have a Work Allowance your total income will undoubtedly drop. Unfortunately though you cannot make this up by taking regular pension income.

Jontowey

To calcotti how much would we lose if anything carers element lcwra she already gets carers allowance what do you suggest 

poppy123456

Jontowey said:

To calcotti how much would we lose if anything carers element lcwra she already gets carers allowance what do you suggest 

If she takes a pension of £400 per month then it will reduce your UC by £400 because it's deducted £1 for £1. If she stops working then she will also lose her earnings of £430.

I don't advise her to take any pension because as advised, it's completely pointless because it's just deducted in full.

calcotti

Jontowey said:

To calcotti how much would we lose if anything carers element lcwra she already gets carers allowance what do you suggest 

As advised taking a pension is pointless because you get no benefit from it.

Jontowey

The whole point of taking part of the pension pot is to stop working period because it is getting too hard but what would dwp say if anything

poppy123456

Jontowey said:

The whole point of taking part of the pension pot is to stop working period because it is getting too hard but what would dwp say if anything

I think you’re missing the point we are trying to make. There’s no point taking the pension because it just reduces your UC £1 for £1 so you won’t be financially better off.

calcotti

I don’t know how many different ways we can say the same thing. While you are on UC you cannot increase your total income by claiming a pension.

If your UC is X and then you claim a pension of Y the UC changes to X minus Y so your total income remains X. The only difference is that instead of all your money coming from the government you are using up some of your pension.

Jontowey

What I'm saying is it's all about finishing work early not about the pension pot

calcotti

Jontowey said:

What I'm saying is it's all about finishing work early not about the pension pot

She can stop work if she wishes because, as a carer, she is not required to work.

Your original post said you wanted to use a pension to substitute the earnings lost (so it was about the pension pot). What we have said is that this will not work.

What you have to accept is that if she stops work your total income will fall.

poppy123456

Jontowey said:

What I'm saying is it's all about finishing work early not about the pension pot

There will be no sanction if she finishes work because she’s claiming carers element. There’s no work commitments when claiming this.