Guaranteed Pension Credit and Savings Allowance?

[jazztheman]

My mother who is 92 is currently receiving guaranteed pension credits and is also receiving housing benefit. She is worried that her savings may affect these benefits, she has only got some small savings but wants to know the savings limit before it affects her benefits.

 

Any idea of the savings amount that are allowed before it affects her benefits?

[count orlok]

£10000 lower limit no upper limit, but every £100 over K costs (and I not sure of these) 50p off PC and £1 off HB. At some point I think Guaranteed Credit may turn to Saving Credit.

Edited June 10, 2012 by count orlok

[Kevin Bolt]

There is no upper limit for capital, however for every £500 you have over £10,000 they assume you get £1.00 per week income. As your mother is over 75 she probably has what is called an Assessed Income Period and this is likely to be indefinite and any increase in capital only needs to be notified to the Pension Service if the AIP ends.

 

So if she's in an AIP then she could win millions on the lottery and still not have to notify the Pension Service and still get the guaranteed credit, housing benefit & council tax benefit. I assumed that she's getting full HB & CTax Benefit as she's on guaranteed credit.

[jazztheman]

Thank you. She is getting full HB & CTax Benefit although she does pay a small amount of housing benefit because she rents privately and is slightly above the Councils rent upper limit.

 

How would she get clarification that she is receiving an Assessed Income Period?

[Kevin Bolt]

It will say on her notification letter, if you haven't got it just call the Pension Service and ask them to send a copy.

[jazztheman]

So if she is on an Assessed Income Period which I suspect she is. When the current Assessed Income Period ends and is due for a review what happens if her savings are over £10K? does the £1 per week income for every £500 over £10K then apply?

[Kevin Bolt]

Yes, but it's more likely that the AIP will not end. It would only end if:

 

She marries or gets a new partner

Move into a care home permanently

The AIP is not indefinite

 

If her AIP isn't indefinite then there are things that you can reasonably do to bring the level of savings down without being seen to be disposing of income to claim benefits. these include purchasing a pre-paid funeral plan, which you'd have to pay from your mothers estate, so if the AIP is going to end then it's worth purchasing as it lowers the savings by whatever the cost is, and hence the income deemed to be earnt.

[MARTIN3030]

Welcome to the site Kevin,and some very good advice there.

 

Edited June 11, 2012 by caro