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Blow Your Pension Pot And You'll Lose Your Benefits


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HOLA441
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HOLA442
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HOLA443

I genuinely hope those 55 and over fight hard to hang onto the wealth they have accrued.

I don't. Let them lose it all, maybe then they will have some sympathy with younger people who have no realistic chance of gaining that kind of wealth in the first place.

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HOLA444
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HOLA445
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HOLA446
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HOLA447

I expect that the only way to handle pension is for the state to hand out a set amount per person.

No means test, no bus pass, no winter fuel, no widows payment.

Any extra you get from a personal or company (any?) you get.

Sounds so simple + doable esp. after Gordon Browns 'vote for me' payouts.

isn't that what already happens.

there is the basic state pension (£113 PW) which is not means tested but is available to all those who have paid enough |NI years

how much is a bus pass worth unless you live in London and get a 'freedom pass'

the winter fuel payment as I have stated repeatedly is £200 per annum per household (£4 p.w. per couple then)

any extra like a personal/company pension is not affected but is taxable (unless you have chosen to cash in said pension at 55 - of your own volition) IN WHICH CASE YOU WILL NOT HAVE ANY EXTRA INCOME TO PLAY WITH - tough you should have realised that money spent is not there any more - mis-selling anyone?)

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HOLA448

Why are they making all the medical advances to prolong life when nobody will be able to afford being old? The government should be encouraging people to smoke and drink so that they have a good life, die young and don't have to worry about how they afford old age.

We should have all learnt that most things now are designed to be short-term and expensive.....medical advances mean to prolong life three to six months?

Individual responsibility.....want to live well, and for longer no good depending on others to do it for you, unless you are rich. ;)

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HOLA449

So your hoping that charlatans and shysters succeed in ripping others off? Nice.

"Ripping off" is a loaded term. Younger people learn every day that they have to be hard and smart with their resources if they want any semblance of economic comfort. If older people can't be bothered to be just as hard and smart let them suffer the consequences.

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HOLA4410

"Ripping off" is a loaded term. Younger people learn every day that they have to be hard and smart with their resources if they want any semblance of economic comfort. If older people can't be bothered to be just as hard and smart let them suffer the consequences.

Fair enough we're all different. Personally I think excessive fees, charges and taxes on one's investments are wrong no matter whether you're 25 or 75 years of age.

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HOLA4411

Sure, the professional scammers are already circling, but...the biggest raid on pensioner's newly-released wealth will be from inside the family...

"Mum - now you've got all this cash will you help me with house deposit/pay off credit cards/university fees/boob job/decent car to get to new job/move up to a three-bedder now your new grandchild is arriving/old student debt/ help us fund this brilliant new business idea we've got etc...

After all, you said you'd leave it to me when you died anyway..."

Those pressures are going to be very hard to resist....

Infinately more sensible than handin it over to a care home landlord/City insurance company

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HOLA4412
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HOLA4413

That's exactly why people saved up in pensions and were encouraged to do so - before it became evident it they were just pools of money for the pension fund crooks and government to help themselves to.

Now they're going to penalise them for spending the money that the government is releasing to enable them to do that. What do they expect people to do take it out of the pension fund and lock it away in an instant access account buy a BTL

Crazy people crazy policies.

Thats more like it

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HOLA4414

I'd like to see the specific rules they are talking about using to prevent exercising the freedoms they've just been granted.

I don't think there is a rule. Unless there is something extremely vague which leads to the unsatisfactory position of the state exercising pure subjectivity in whether to grant benefits or not. I would guess if so, that would probably contravene some human right to be able to predict the use of laws.

These rules already exist they are called depletion of assets and yes they are based on pure subjectivity

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HOLA4415

at what point do they consider the capital as if it was there?..current year?, last year, 10 years before?

I think the quote was what they would like to do, not what the regulations say.

Of course, if you have a pension and spend the capital current year, you are going to lose some benefits.

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HOLA4416

These rules already exist they are called depletion of assets and yes they are based on pure subjectivity

Repaying of debt such as mortgage debt should not be counted as depletion of assets.......although I don't see much call for people doing that.

Most will end up drawing down their homes as a pension income I would have thought. ;)

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HOLA4417

Thats more like it

Valid point (perhaps as an addition rather than a sustitution but not quibbling) and I understand/appreciate the acid humour but it's also fair to say that isn't always a preference for everyone with a pension fund.

For sure it seems to be the government's preference. They should make it law and that would please the DWP as well.

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HOLA4418

This is a vague statement with little real law to back it up, certainly nothing objective.

The way I would have done it is to require the pension manager to produce a certificate with any pension lump sum withdrawal which would show a "notional annuity value" of the cash sum withdrawn. This would be sent to DWP who would treat the notional annuity value as income for benefits purposes.

Draw down £250k in cash, and that would be treated as having a £10k cash income each year for life for the purposes of calculating benefit entitlement.

Some care would be needed for the computing the notional value, as obviously you don't want to double count money which is invested for income outside of an annuity.

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HOLA4419

That's exactly why people saved up in pensions and were encouraged to do so - before it became evident it they were just pools of money for the pension fund crooks and government to help themselves to.

Now they're going to penalise them for spending the money that the government is releasing to enable them to do that. What do they expect people to do take it out of the pension fund and lock it away in an instant access account to be further thieved away by the government through inflation - or put it in say equities to invest in a company/companies (give it to the directors) that dilute it overnight, go bust etc etc etc.

Crazy people crazy policies.

I'd like to see the specific rules they are talking about using to prevent exercising the freedoms they've just been granted.

I don't think there is a rule. Unless there is something extremely vague which leads to the unsatisfactory position of the state exercising pure subjectivity in whether to grant benefits or not. I would guess if so, that would probably contravene some human right to be able to predict the use of laws.

I think what's going on is that the DWP will effectively have access to your pension pot if you haven't bought an annuity. So if you become unwell or incapacitated, when the 12 month contributions phase of Employment and Support Allowance is up you'll get no benefit at all if you have over (I think) £16k. You will have to use your pension pot to support yourself.

This may also come into play if you are made redundant/lose your job (I don't know but I suspect it will)

This is why they would be able to look at deprivation of capital in deciding if you were eligible for benefits.

Even if you have an annuity they will deduct £ for £ if you apply for income based benefits and you're only allowed to keep £85pw (I think) of the annuity if you're on contribution based.

Something like that anyway, it's very confusing. If you might be affected DYOR as I've only superficially looked into it for a friend and it's a lot more detailed than what I've said.

Edited by Solitaire
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HOLA4420
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HOLA4421

Ahh right. This statement refers almost specifically to care home provision. Do you mean 'deprivation of assets'? Is it the same thing or something different?

http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

Probably

I was refused benefits in the late 90s early 20s due to means testing,i thought bollock$ to this and went out and bought a jet ski thinking i was clever, went to sign on clutching my depleted bank balance /statement ,they said no can do due to the above depletion/deprivation rules (can`t remember wich)

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HOLA4422

I think what's going on is that the DWP will effectively have access to your pension pot if you haven't bought an annuity. So if you become unwell or incapacitated, when the 12 month contributions phase of Employment and Support Allowance is up you'll get no benefit at all if you have over (I think) £16k. You will have to use your pension pot to support yourself.

This may also come into play if you are made redundant/lose your job (I don't know but I suspect it will)

This is why they would be able to look at deprivation of capital in deciding if you were eligible for benefits.

Even if you have an annuity they will deduct £ for £ if you apply for income based benefits and you're only allowed to keep £85pw (I think) of the annuity if you're on contribution based.

Something like that anyway, it's very confusing. If you might be affected DYOR as I've only superficially looked into it for a friend and it's a lot more detailed than what I've said.

This would be my guess as it is now ,if you are 55 and made redundant and have a large pension pot it`s ring fenced when it comes to means testing

Now with this rule i think it will open the door to include 25% of the pot into the means testing calculations, as there will be no penalty for withdrawing the first

25%

This is just a guess

Edited by long time lurking
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HOLA4423

Valid point (perhaps as an addition rather than a sustitution but not quibbling) and I understand/appreciate the acid humour but it's also fair to say that isn't always a preference for everyone with a pension fund.

For sure it seems to be the government's preference. They should make it law and that would please the DWP as well.

Would not argue with any of that ,but i fear there may be an even more cynical motive for this statement and the change in the rules concerning pensions

£12 bn of welfare savings might have something to do with it but who knows only time will tell

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HOLA4424

Would not argue with any of that ,but i fear there may be an even more cynical motive for this statement and the change in the rules concerning pensions

£12 bn of welfare savings might have something to do with it but who knows only time will tell

+1

Another possibility (which doesn't contradict the welfare savings/BTLs points) is that it's emptying/freeing up pension funds in advance of some sort of eu harmonisation of pension savings in due course.

If so they would of course be assuming that the UK will be remaining in the eu - but if the UK leaves they still get the welfare/BTL "advantages" (advantages for them).

Edited by billybong
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HOLA4425

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