Hi all ... Hope this is the right place to post this.

Having lost everything in the recession I then suffered a major breakdown and now have Complex PTSD and fibromalgia amongst other illnesses which are all getting worse.

After two years of being homeless myself and my partner were given a council flat. Our neighbours are the local drug dealers and generally bad things happen daily. I now won't go out of the flat at all.

I have a pension which I could cash in in 18 months and I wanted to do this and buy a small cheap house.

I currently get PIP and my partner gets carers allowance and we get income support which I apparently claim for us both. I don't really understand it all as the CAB sorted it out for us.

If I did cash in my pension and buy a house would our income support stop.

Also would this affect my state pension when I get to retirement age. Someone told me that we wouldn't be entitled to pension credits.

Thanking you in advance for any advice you can give.

Before you consider cashing in your pension, you really must get some advice from a qualified financial adviser. Whilst you should be able to take 25% tax free, any more would be taxed (possibly by as much as 60%). In addition, there will most likely be early draw down fees charged by the pension provider. Personally, I think your best option would be to press the HA for a better property and leave the pension pot to grow.

Hi and thanks for the response.

I have already checked and would net at least £80K after charges.

I'm pretty certain we would lose the income support (or at least my part of it)

My biggest concern is whether at 65 pension tax credits would be affected.

Hello there.

You could use a benefits checker like the turntous/entitled to online one and input your future financial position to see what benefits you might be entitled to.

HB

This information from AgeUK might be useful.

http://www.ageuk.org.uk/money-matters/claiming-benefits/pension-credit/what-is-pension-credit/

HB

Surely, if you withdraw money from a private pension, if you have money exceeding a certain amount ( £16k ? ), then you would not qualify for any benefits. If you used the money to buy a house, rather than pay rent, you are then using money to invest in property, rather than support your living costs.

The rent is already paid by benefits so we would be saving them that outlay until we die ... It's not about investing in property it's about buying a home using the money I paid into a private pension for years for.

It seems that everywhere I look says it depends on what you drew your pension pot down for and spent it on. That is decided at the time by DWP as to whether you did it to claim extra benefits ... totally confused and stressed by all this

Ask DWP,

but i thought that if you obtained money from any source and it was above a certain level, you are then not eligible for any benefits.

You are expected to use the money to pay for all living costs including rent.

Only once the money reduces below the relevant amount, would you be entitled to apply for benefits.

Whilst i agree that buying your own home would reduce any draw on housing benefits and other benefits in the long run, like many things government are involved with, the rules they apply are not born out of common sense.

Ain't that the truth!

I'm guessing that we would lose the income support but PIP and Carers allowance aren't means tested so although we wouldn't have any spare money, we could survive. I suppose my biggest worry is how we would survive on basic state pension with no Pension Credits if that's what happens :/

Which is why you need to go through your exact situation with a full review so you know the way forward.

As you say it should only be means tested benefits that are affected by drawing a private pension early.

Is there a legal process, where your private pension company could transfer the money to buy a house, without you having any access to the money and DWP would be happy ?

I would think VERY carefully about doing it at 55

you lose soo much of the money in the pot

and in most cases, you'll need the providers consent [your ex employer]

wait till you are 60 then you don't have to ask nor lose out

most schemes allow that without penalty.

don't forget an unscrupulous IFA will do it for you at 55

but they make an absolute killing on commission too!

think about it.....

OK, there are a few issues here. I'm not going to say whether or not I think it's wise to do what you propose, because I simply do not know the ins and outs of these things. But from a benefits point of view, here are the main things you need to consider.

1) You current entitlement to PIP and CA will not be affected, as you correctly note.

2) Your IS might be affected. You would need to declare the £80k sum to the DWP, and if you spent it on a house you would have to tell them that as well. They would then consider whether "Deprivation of capital" should apply in your case. If it did apply, they would treat you as still having the money and, since it's clearly more than £16k, would stop your IS. So the key question is "Is it deprivation of capital to use a lump sum payment to buy a house that will be your primary residence?" I'm not 100% sure.

You could ask the IS department. If they tell you that it's OK then it is OK because the rules state:

52843 Claimants or partners have not deprived themselves of capital for the purpose of getting benefit or more benefit if they

 

1. say exactly what they are going to do with their capital and
   
2. are told by the DWP it will not affect the amount of benefit they can get and
   
3. do what they said they were going to do with their capital.
   

Otherwise each case is considered on its merits. They will look at how you spent the money, and whether you did so with the intention of securing or increasing entitlement to means tested benefits. That's the part of the rule that's often forgotten - it does not sound to me like you are considering buying a house solely so that you can continue to receive IS, but I'm not and never was a Decision Maker, and that's the person who makes the call. Considering worst case scenarios, you should plan for the possibility that your IS will stop and decide whether you could manage without it if necessary.

3) Future pension entitlement. Your contributory State Retirement Pension will not be affected. State Pension Credit is not likely to be affected either. They'd have a hard time claiming that you bought a house specifically to increase your SPC entitlement when 10 years have passed since the purchase. If they applied deprivation rules there and you appealed, the Appeals Tribunal would laugh the DWP right out the door and find in your favour.

I would think VERY carefully about doing it at 55

you lose soo much of the money in the pot

and in most cases, you'll need the providers consent [your ex employer]

 

wait till you are 60 then you don't have to ask nor lose out

most schemes allow that without penalty.

 

don't forget an unscrupulous IFA will do it for you at 55

but they make an absolute killing on commission too!

 

think about it.....

Hi and thanks

I've already checked all this out and it's fine .... Thing is the way my health is going I'm not sure I'll make 60. Spent all of my life trying to do the right thing and like I said, lost everything in the recession. I want to try to make the most of what time I have left

Good

Dx

OK, there are a few issues here. I'm not going to say whether or not I think it's wise to do what you propose, because I simply do not know the ins and outs of these things. But from a benefits point of view, here are the main things you need to consider.

 

1) You current entitlement to PIP and CA will not be affected, as you correctly note.

 

2) Your IS might be affected. You would need to declare the £80k sum to the DWP, and if you spent it on a house you would have to tell them that as well. They would then consider whether "Deprivation of capital" should apply in your case. If it did apply, they would treat you as still having the money and, since it's clearly more than £16k, would stop your IS. So the key question is "Is it deprivation of capital to use a lump sum payment to buy a house that will be your primary residence?" I'm not 100% sure.

 

You could ask the IS department. If they tell you that it's OK then it is OK because the rules state:

 

 

 

Otherwise each case is considered on its merits. They will look at how you spent the money, and whether you did so with the intention of securing or increasing entitlement to means tested benefits. That's the part of the rule that's often forgotten - it does not sound to me like you are considering buying a house solely so that you can continue to receive IS, but I'm not and never was a Decision Maker, and that's the person who makes the call. Considering worst case scenarios, you should plan for the possibility that your IS will stop and decide whether you could manage without it if necessary.

 

3) Future pension entitlement. Your contributory State Retirement Pension will not be affected. State Pension Credit is not likely to be affected either. They'd have a hard time claiming that you bought a house specifically to increase your SPC entitlement when 10 years have passed since the purchase. If they applied deprivation rules there and you appealed, the Appeals Tribunal would laugh the DWP right out the door and find in your favour.

Thank you so much for a few things in that post ... as always, when I use CAG I do make a donation that I can afford

You are in a LHA flat? but have not said which floor you are on or whether or not there is lift or stair access. So assuming you are not on the ground floor and that access is by stairs only (although a lift will not make much difference)

This is the course of action I would take if I was in your shoes

1] I would forget about cashing in the pension as the vultures strike hard if you are below 60. I know this for a fact as an aunt of mine cashed hers in at 57 and out of 154k she ended up with 63k

2] I would then get down to the LHA offices and tell them that due to my worsening condition and the daily problems that are occurring with the neighbours I would like to move. (I would make sure I have some idea of what/where I would like to move to and the type of property I would want to move into, (personally a small bungalow in a better area))

3] then I would put pressure on the LHA if they dragged their heels by going to see my local MP and explain the situation, its surprising what a little nudge from a MP can acheive.

4] then once moved I would relax in the knowledge that the pension pot should help to ensure a better life in the future.

But thats me... what course of action you follow is entirely up to you.

thanks so much for the info about seeing a local MP

I have already checked and would net at least £80K after charges.

To be honest, £80K is not going to buy much of a house and you could quite easily end up in a worse neighbourhood without sufficient funds to move again. For a quick guide to where might be affordable, take a look here: http://www.bbc.co.uk/news/business-23234033

I know .... we've been doing lots of research on that too and we are priced out of most of the country ... but there are still pockets here and there.

We have also looked at moving to Gran Canaria where the climate would be perfect for many of my health problems.

I do know for sure though that I would lose the mobility aspect of PIP and also income support.

My other half would therefore have to find some way of earning an income from home, in between caring for me.

I'm almost sure we would lose pension credits too and have to take out health insurance so it's probably not doable.

my take was you can get IS if you own and live in your own home -

How much Income Support can you get

Your capital

If you have more than £16,000 in capital, you cannot get Income Support.

Capital means things like savings, property and land. However, some capital is ignored, for example, your personal possessions and the home you own and live in. Certain other types of property are also ignored. For full details of other property which is ignored, you should get advice.

Sure, yes - your own home is not counted as capital for IS purposes if you own and live in it prior to the start of the claim.

But if you live in a rented home, come into some money and use that money to buy a home, it's not obvious how that would be considered. I mean, the sensible thing to do would be to think of how that would reduce HB payments in future and allow the expenditure, but deprivation of capital rules aren't always that sensibly obvious.

sure is not sensible hope the OP finds out and lets us know as you said whats the point in asking sumone to not buy a house and keep getting HB? and IS simultaneously rather then only iS

PS could buy loads of gold I think its disregarded as capital or am I wrong

PS could buy loads of gold I think its disregarded as capital or am I wrong

Gold purchased as an investment is a tradable commodity, and as such, should be declared in the same way as stocks & shares. Gold purchased in the form of jewellery is (generally) a very poor investment as it is only worth the scrap value on the open market.

Had some antique gold jewellery valued last year. For insurance purposes, it was valued in excess of £10,000, but the open market valuation came in at around £1,000.

Hi all

I hope someone can help me with this as I'm struggling to understand it. I'm 55 soon and want to draw down my pension pot to buy a house (lost ours in the credit crunch).

The company I'm with don't allow that but they also don't charge for me to transfer it elsewhere.

They have just sent me a statement and transfer out form.

It says Current Value available for transfer £121K

Value of GMP £88K

Which is the amount I will get

Before you decide on a draw down, you really do need to talk to an IFA with knowledge about Guaranteed Minimum Pension schemes. Aside from the probability of having to pay tax on any amount you draw down, you could find yourself in a difficult financial position when you come to retire.

From what I understand of GMP schemes, they can be quite valuable at retirement. It is also a complex area, so you must get some independent advice before doing anything else.