Pension advice for my Mum please

[jenniferlawrence]

My Mum is 58 and has recently had to sell her house and move into rented accommodation as she got into massive debt and could no longer afford her mortgage. After selling her house she will hopefully have £35,000 and she works 40 house a week to pay her rent, bills, general living expenses. She is single and doesn't have a pension. She is planning on working for as long as possible, depending on her health.

We are worried about her future. What happens when she is too old or ill to work and can no longer pay her rent? What is the best thing for her to do with her £35,000 so that it can provide her with an income when she can no longer work? Is it worth her paying it into a private pension?

Your advice would be appreciated.

Can she afford to join her company scheme and get employer contributions and the tax break?

With the 35000 - I'd fill up her isas each yr (put it in a
high interest account in the mean time).

Does/Will she have enough yrs national insurance contributions for full state pension? If not pay in some extra yrs to make it up.

She's actually a temp for the local council so I'm not sure she qualifies for the pension. She'll try to find a permanent position after the house sale stress is over but she's been struggling because of her age and poor health.

She's been working full time and paying tax and NI for over 10 years so I assume she'd qualify for a state pension??

I'd look into that. I think you're meant to pay NI for all of your working life to qualify for a full state pension. Wasn't there something about women that took a few years out to raise the family being offered the chance to buy back lost years, or something?

She worked for my Dad's business for 22 years and didn't pay NI so maybe she won't qualify then.

If she gets to the point where she is too ill to work (she has Crohn's Disease) will she get incapacity benefit and housing benefit? I assume she'd have to live off her savings first?

Jennifer under the Automatic Enrolment legislation she is entitled to join the lock authority pension. As it would most likely be a final salary scheme she really should join.

For full state pension you need 30 qualifying years.

As I understand it savings over 16000 means you don't get benefits so it may be better for her give some money to you to hold for her (assuming it wouldn't affect your own benefits).

Purple that's benefit fraud.

Savings mean that you do not qualify for means tested benefits.

Not sure if buying extra pension credit would be useful.

First I would get a pension statement from DWP. State Pension Statement - gov.uk

I just went on the DWP website and did the pension qualifying calculator and it said that she qualifies based on 15 years of paying NI and 21 years if claiming child benefit. Is that right?

If she fills in a BR19 form then she will get a Basic State Pension forecast.

Thanks for your replies. We think that she will qualify for a state pension. I think her main issue will be housing. Maybe we'll have to use her £35k to build a granny annexe when the time comes.

In addition to the great advice above, have you addressed what caused the massive debt in the first place? If it is not dealt with then the savings may not last long in any case, and with poor health, rented accommodation, and a temp job, it sounds like she really needs a good buffer in the short term as well as a long term pension plan.