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Pension Credit and Pension Drawdown
Hello
Client was on PC G before SRP birthday, and partner reaches SRP birthday early April. Both on PIP ER Daily Living and one on Mobility. With 2xSRP and 2xCP (underlying ent) they will be entitled to PC G again, but they have £20k in a Pension drawdown account - they have had some of this before so I take it they can draw amounts from it at will. So am I right in thinking this just counts as capital.
They are entitled to PC G regardless, but if it is capital then the amount will reduce.
TIA
We try to cover these rules in our factsheet Pension Freedom and benefits
If the pot is left untouched, then it’s actually notional income rules that come into play.
6.2 Income
If you claim PC and leave your pension pot alone, the DWP include ‘notional income’. This is an amount equivalent to the income you would have received if you had bought an annuity with the pension pot.
Gareth Morgan posted details of how this calculation is made here
Thanks Paul I have advised the client to speak to a regulated financial advisor.
Up the Bees/Tykes/Robins etc Al
Thanks Paul I have advised the client to speak to a regulated financial advisor.
Up the Bees/Tykes/Robins etc Al
That should have been et al.
Client has got back to me - would Council Tax Support, national scheme as SRP age follow the same rules re notional income? From reading the Shelter website I think yes. Can someone confirm/clarify for me please?
Thanks
Looks like it Julie.
Para.22(4) onwards of Sch.1 of the Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012 applies:
Notional income
22. 4) This sub-paragraph applies where a person who has attained the qualifying age for state pension credit—
(a)is entitled to money purchase benefits under an occupational pension scheme or a personal pension scheme;
(b)fails to purchase an annuity with the funds available in that scheme; and
(c)either—
(i)defers in whole or in part the payment of any income which would have been payable to him by his pension fund holder, or
(ii)fails to take any necessary action to secure that the whole of any income which would be payable to him by his pension fund holder upon his applying for it, is so paid, or
(iii)income withdrawal is not available to him under that scheme.
(5) Where sub-paragraph (4) applies, the amount of any income foregone is to be treated as possessed by that person, but only from the date on which it could be expected to be acquired were an application for it to be made.
(6) The amount of any income foregone in a case where sub-paragraph (4)(c)(i) or (ii) applies is to be the maximum amount of income which may be withdrawn from the fund and must be determined by the authority, taking account of information provided by the pension fund holder.
(7) The amount of any income foregone in a case where sub-paragraph (4)(c)(iii) applies is to be the income that the applicant could have received without purchasing an annuity had the funds held under the relevant scheme been held under a personal pension scheme or occupational pension scheme where income withdrawal was available and is to be determined in the manner specified in sub-paragraph (6).
(8) In sub-paragraph (4), “money purchase benefits” has the same meaning as in the Pensions Scheme Act 1993(53).
Up the Tykes and the mighty Bees. Your old boy Pinnock has been absolutely immense for us lately, what a player.