Parents retirement questions - benefits / pensions

[Rachell1]

Hi all

It is a stressful time for my parents who are retiring in very soon.

They have worked and paid their rent and bills their whole life but unfortunately have lived pay check to pay check and so will be falling on benefits once retirement comes.

I think they will be entitled to housing benefit and universal credit?

However, their question is this..

My mum lived in the US for a while and receives a US working pension, my dad will receive a lump sum workplace pension once he retires and they will also start receiving state pensions each.

With this combined pension income in mind, they want to know roughly how much (in percentage) the government will take from their pension incomes towards the rent, council tax etc, as I assume they won’t cover the rent and council tax as well as allowing them their pensions in full!

Any advice would be greatly appreciated, they have already tried pension wise, CAB etc.. no help so far unfortunately.

Many thanks

I’m sure once you reach state pension age you can’t claim universal credit… you can claim housing benefit if income is low enough I think. You need to use a benefit calculator to work it all out.

Age uk might be able to help with benefits entitlement and applications advice.

Are you sure they get full state pension, if they have worked abroad for a number of years. Have they properly checked on the www.Gov.U.K. Site.

you need to read it carefully as it gives the amount you could get if you have all the years in big letters and then underneath it gives your actual payment.

I may be wrong with this bit, but is there a requirement to have made enough NI contributions over enough years to be able to claim pension credits too. They need to check very carefully if they have paid in enough.

Suggest they approach CAB for advice

Has your Mother worked enough years to get full state pension, you can check this out online or by filling in a form and sending off to see how much she will be entitled to. I think pensioners get pension credit, maybe you can search online to see what they will be entitled to. Unfortunately for a lot of pensioners they have to continue working to pay rent, bills and council tax.

Hi all

Yes she has indeed, she actually received a letter not that long ago with an expected breakdown of what she will be receiving from the state pension over here and it is indeed the full amount.

We did also try Age UK but they just seem to be afraid to commit to any advice in case they get it wrong! What they are all saying is basically that they won’t know until they submit the forms…

Have you tried using the entitled to website?

You have to have at least 10 yrs NI contributions
35 yrs is a full new state pension

do both your parents have 35 yrs NI contributions? That’s the only way they will get full state pension, otherwise they will get %

If your dad is getting a lump sum over 16k the household won’t get Any Benefits

For claimants who are in a couple the capital of their partner is also taken into account.
first £6,000 of capital is not counted

capital between £6,000 and £16,000 is taken into account at a tariff income of £1 per week for each £250 (or part of £250) of capital over £6,000

capital over £16,000 is not eligible for benefit

Unless they were born in 2000, the "35 years" requirement doesn't apply.

The 35 years rule now only applies for people with NI contributions starting in 2016. As they're older, they'll be on a mixture of the old and new state pension schemes.

For example, people who contracted out may have to make more than 35 years' contributions just to get back to ordinary 'full' state pension, others who didn't may be able to get more than 'full' state pension even though they contributed for less than 35.

So they need to check their own actual record.

For the reciord, nothing will be taken from their pensions, but they may get less housing benefit and no council tax benefit. As has been said above, the lump sum your dad gets is likely to prevent any benefits at all.

Pension credits is the top up benefit for low income pensioners. There is an eligibility checker on the gov.uk website.

Thank you so much. This is helpful.

I think they are worrying that they will be left with nothing to live on for car insurance, phone bill, heating etc. I can’t imagine they will take every penny of their pension but then again they’ve heard from their friends who are in similar situations that they can barely afford to get by!

Is this true?

@Rachell1 i think you misunderstand how it works. The only % that is taken from pensions and income is the tax everyone pays if they have income over the threshold.

Your parents may be eligible for pension credit, housing benefit and if in the future they become disabled other help may be available. However, this help is limited by any savings they have.

if they are retiring shortly they need to claim their state pensions asap www.gov.uk/get-state-pension.
At the same time they need to do a budget showing all their out going’s plus a list all savings.
They also need figures from their employer/private pensions to know how much they will receive.

Once you have all the figures then you need to apply for pension credit www.gov.uk/pension-credit which can include housing benefit www.gov.uk/housing-benefit/how-to-claim
The worst they can say is no, or too much in savings. If it’s the latter then they need to supplement with their savings and reapply once below the savings threshold.

Sorry my links aren’t working - it’s a glitch I get just google gov.uk pension credit.

If their income is more than £278.70 between them per week then it's unlikely they'll be eligible for pension credit unless they have disability benefits or housing costs. For every £500 of savings above £10000 it's classed as £2 per week income.

My mum was until recently on on pension credit, she got full housing benefit etc. Housing benefit was not enough to cover her rent, so she had to top it up from her pension.

She had just about enough, but no luxuries & no way could she afford to run a car I’m afraid, so your parents may have to seriously look at their lifestyle.

Thanks all.

Last question! My younger sister lives them with her child, but she doesn’t work as she is a single parent (pretty sure she is on universal credit?), they are also worried that having her living with them may affect their benefits?

Your parents could go on
entitled2, it’s a benefit calculator
They ask literally every question regarding
who lives in the house
what money comes into the house
his much is rent & council tax
any benefit
many savings
any private pensions

if there not tech savvy perhaps they could give you figures and you could do it online
you don’t have to summit it, anyone can do it just to see if there’s any help there not sure they can receive

does your dad have an idea how much lump sum he’s due and monthly private pension

personal allowance at the moment is £12570
before any tax is paid, so anything over that amount per year is taxable @ 20%

This could complicate things. I think housing benefit is assessed on household income so the income of all 3 people is taken into account. I'm sure there are more knowledgeable people on here though that might know for sure. Do you have a welfare benefits advice service in your area? They'll be able to do a full check if your parents give them household income details.

There is what is called a non dependant deduction from housing benefit when a relative or friend lives with you. It's on the basis that they ought to be paying you something for rent.
Details are here
england.shelter.org.uk/housing_advice/benefits/housing_benefit_deductions_when_living_with_non_dependants

Your sister is a non-dependant, and this may affect a Pension Credit claim. I would recommend your DPs and DSis consult the CAB, who can do a full benefits check.

If your dad gets a lump sum pension it's very unlikely they'll get any benefits until their pot/savings goes under 16k

If they register on government gateway they'll be able to see their state pension forecasts