Britons have £50bn festering in 'lost' accounts:

racyguy
racyguy Community Member Posts: 560 Empowering
in Benefits and income
Shocked!!
But then not surprised at all. I have a pension pot of around £360 with Aviva. I could have claimed it 19 years ago but didn't bother as I was still working. Then when I claimed Pension Credit in 2013 I didn't see the point as the PC award would have been reduced by the pension payment and the tax man would have taken his bit.
Now no longer claiming PC there is every case to claim it.
So yes it doesn't surprise me to hear that the £50bn is about right. 

Comments

  • janer1967
    janer1967 Community Member Posts: 21,922 Championing
    I would imagine there is a lot of lost money in the child trust fund money that the gov used to pay into when you had a child 

    They stopped it after few years even though you were supposed to get top ips when they reached certain age 

    Toby got fund of £500 when he was born which is in a trust fund till he is 18 but I bet a lot of people don't have the details of where the fund is retained 
  • bg844
    bg844 Community Member Posts: 3,928 Championing
    There’s a link for people who don’t know where their Child Trust Fund’s are. 

  • 66Mustang
    66Mustang Community Member Posts: 15,432 Championing
    For several years now I keep getting letters saying I have £2.05 in a now unused bank account.

    I need to go to the nearest branch to claim it.

    It will cost me more than that in petrol to get there.

    If it’s not claimed within 15 years apparently it goes to charity so not too bad.
  • calcotti
    calcotti Community Member Posts: 10,000 Championing
    racyguy said:
    Then when I claimed Pension Credit in 2013 I didn't see the point as the PC award would have been reduced by the pension payment and the tax man would have taken his bit.
    When you were claiming PC the pension pot should have been taken into account as providing notional income regardless of whether or not you actually drew an income from it. Had you taken it as a lump sum it would have been treated as capital and if total capital below £10,000 would have had no impact on PC.
  • racyguy
    racyguy Community Member Posts: 560 Empowering
    calcotti said:
    racyguy said:
    Then when I claimed Pension Credit in 2013 I didn't see the point as the PC award would have been reduced by the pension payment and the tax man would have taken his bit.
    When you were claiming PC the pension pot should have been taken into account as providing notional income regardless of whether or not you actually drew an income from it. Had you taken it as a lump sum it would have been treated as capital and if total capital below £10,000 would have had no impact on PC.
    The advice from the Pension Service at the time was that as the 'pot' was not a pension or annuity but simply an amount of money held in trust for me. If I wanted to convert it into an annuity then I would have looked at the whole market for the best deal. It just sits there until I look at what is offered by other companies. 
    Likewise if I wanted to capitalise it and receive a lump sum I would have to once again look at which company would give me the best deal. 
    I suppose you could say that in a way I have cheated HMRC out of the tax that once converted into an annuity or a cash lump sum they would deduct from it.
    Currently the best annuity rate today is 3.60% of the fund - £12.96 pa before tax - 86p a month/or for Pension Credit purposes 20p a week!

  • calcotti
    calcotti Community Member Posts: 10,000 Championing
    Perhaps the rules changed after 2013. Certainly you can't have a pot ignored under current rules.
  • racyguy
    racyguy Community Member Posts: 560 Empowering
    calcotti said:
    Perhaps the rules changed after 2013. Certainly you can't have a pot ignored under current rules.
    Maybe that is the case now.
    I do find that it will be an impossible task for the DWP to value the net amount of an annuity payment as it varies between the various companies. The worst is 2.1% of the fund with 3.6% being the beast. Should they value it based on the worst provider or the best, should they value it based on a 2 5/10 year term? When would they value it? annuity rates change daily much like stocks and shares.

    Or would they not bother and maybe just value the fund value? In which case at best would be after tax has been deducted. In that event our capital would not have exceeded £10,000 on that date.
     
  • calcotti
    calcotti Community Member Posts: 10,000 Championing
    edited August 2022
    racyguy said: I do find that it will be an impossible task for the DWP to value the net amount of an annuity payment as it varies between the various companies. 
    I think they used standardised figures. I agree it must be a difficult for them.
    racyguy said: Or would they not bother and maybe just value the fund value? 
    No, the pension pot would have to be converted to notional income (unless withdrawn as a capital sum).

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