Universal Credit and Private Pension

[Seabubbles]

Can someone please help me as I have 2 conflicting responses on my UC journal. I asked them if my Private Pension payments were deducted from my salary when assessing my Award, in the same way a workplace Pension is. One person replied and said Yes, I need to send them evidence of my payments, and then someone else replied on the journal and said this is incorrect. I've asked for clarification several times and am now not receiving a response. Has anyone here ever heard of this please? Gov.uk mentions it as well. Thanks

Paying into a pension is pretty much universally seen as a good thing which is why it's encouraged by tax relief and other incentives. .

Unless you opt out nearly everybody pays into a workplace pension. UC is based on your income after pension contribution.

Why would a SIPP or other non employer option be different?

But we’re not talking about RECEIVING a pension.
Unless, I am going crazy, the OP is asking whether the money she pays into a pension, means she has less income and she should therefore get more UC?
As I said before, I actually hate benefit bashing on so many forums, but this is crazy surely.
Are we saying, I could earn £70k a year, put £60k a year into a pension and then get UC based on my remaining income of £10k being a low income?
That cannot possibly be right?

at the end of the day, my salary is low enough that I qualify for assistance before I make the payments. I don’t have the luxury of a partner or a company paying 10% into my pension so I’m doing the sensible thing and paying into a private pension to try and avoid being on benefits in retirement, if I get to retire.

It’s only a certain % that is deducted from the pension that you get back - it’s not the full amount.

I’m not sure what the issue is; I own my home, work and receive government support having paid in to the system for 20+ years. the rules are there for whatever reason and I am not breaking any rules. What would you prefer? If it weren’t allowed, you’d have a two tier system whereby People get assistance and huge pensions contributed to by employers and the others who got assistance but the minimum pension contributions from employers who then need additional assistance in retirement…

The full £60k wouldn’t be used. It’s a proportion. I doubt you would get it to start with on a salary of £70k. So no, in that situation it wouldn’t be accepted.

have you thought about the circumstances in which people claim UC? It’s not done for shits and giggles. It’s because you have a genuine need such as earning a low salary, living in an expensive area or being a single parent. You can’t believe the daily mail headline that all benefits claimants are on £50k a year! The entitlement for a single person is £400 - could you live on that? Pay your mortgage, your bills? How much do you think you are going to put in a private pension with that once your bills are paid?

Yes. Hargreaves’s & Landsdowne do one that you can set up yourself.

I absolutely agree that living on benefits is nowhere near the ridiculous idea that the right wing press puts forward. I totally understand that it’s not for shits and giggles and it is not easy and certainly doesn’t give anyone such an easy life as suggested by the Daily Mail.
However, my point is, surely nobody thinks you should get more UC because you choose to “save” money by putting it into a private pension.
Get the fair amount of UC, save some if that’s how you want to struggle even more than you are on a low income but, do not suggest for one moment you should get extra money because you contribute to a private pension.

It is to encourage people to pay into their pension now and give them that opportunity so they don't require government help later in life. I don't know what the limits are to stop people taking the mick and putting their whole salary in though.

It really is the only opportunity for me to be able to save into a pension - I also work and pay tax and have done all my life. I get UC to top up my wage. I don't get anything else, I pay full council tax etc. By the time I am a pensioner who knows if there will even be such thing as a state pension or pension credit. Granted it's taxpayer's money but I'm a tax payer so getting help from a pot that I pay into and always have.

@Neededa - why should someone who doesn’t benefit from an employer’s pension not be able to contribute to a SIPP? After all they are already disadvantaged because they don’t get the employer’s matching contributions.

OK, I have thought about this more Seabubbles, and realised, you may not have a workplace pension, in which case, yes, you should be able to protect your future. In a workplace situation of course your contribution would be taken out before your net pay, which would affect your eligibility.
i guess I just assumed that everyone who is low paid and therefore receiving UC would have a workplace pension, so I read your OP as a SIPP contribution being an extra, not a necessity due to no other provision.
I therefore apologise.
I still don’t know the answer but do apologise for my assumptions

But I’m not getting ‘more’ money - I’m getting the amount I’m due. Somebody on my salary could be getting 10% or 15% employer contributions and get exactly the same amount UC as me. The whole point is to try and get people off benefits at some point.

how would saving help me? I would be expected to use my savings before claiming UC but the point is, I make sacrifices to save peanuts into the pension. If I make sacrifices to save, then go over the threshold for UC, once I have burned through the savings to pay for food and bills, I will have nothing and need to claim UC again. At least by saving into the pension, I am hopefully avoiding having to claim UC at some period in the future which is what you clearly have an issue - that people stay on UC forever.

I hope you saw my post, probably crossed with yours where I apologised for seeing a SIPP contribution as an extra to a workplace pension, I assumed that choosing to contribute to a SIPP on top of a workplace, would be a lifestyle choice paid for by the taxpayer, not a necessity for some.

Thank you, I appreciate your apology. I hope you can understand not all benefit claimants are scroungers and don’t work. You’d be very surprised by my career and may be shocked that I’m not a mumsnet high earner. Simply doing my best to avoid poverty in working life and retirement .

I both RECIEVE and PAY IN TO a pension.

Yes, there should be limits but there aren't.

No-one would mind if there were limits, but there aren't so people do take the mick, as the article in the newspaper was highlighting.

Hopefully they will put limits but I am not holding my breath because they are idiots.

Can you link the article please? It’s not like for like though? You don’t pay £1,000 in get £1,000 back. It’s a proportion.

For example, if I were a teacher and I were contributing 10% and my employer contributing 10% then I get UC top up automatically including the pension contributions deducted from my salary.

Someone who is paying into a personal pension, doesn’t get that, they put whatever they can with NO employer contributions but get a proportion back in UC. They also have to fight each month to get that top up back, sometimes having to wait 6-8 weeks for each payment resulting in the use of food banks and credit cards.

According to you, the first example is ok but the second is not? Even though in retirement, the first person will do very well and the second may not?

i can assure you, nobody on UC is getting rich from having pension contributions deducted. Especially if they live in the south east, have childcare bills, and are a single parent.

I think there may be limits, I can't be 100% sure because I can't get a straight answer anywhere but I read that a decision maker will intervene if somebody is blatantly taking the mick by paying in 3/4 of their salary or something.

Hey it's fine, it's a contentious and complicated subject, and very hard to source accurate facts.

I suspect the DWP with have internal guidance, Advice for Decision Makers (ADM), on the subject. This will include process where people are building pots outside Workplace Pensions and identifying pee taking were it to happen.

Workplace Pensions are a relatively new thing. The legislation dates from 2008 but implementation took place mostly from 2012-17. Scope was gradually extended to larger groups of employers and employees during that time.

There are a lot of people still paying into defined contribution pots started before Workplace set ups came along.

I work part time for a charity. When I took up that role I worked too few hours and was ineligible for auto enrolment. I was added later.

After around 6 years my 'pot' is about £10k. Nice money for a better car or a new kitchen but the income it'll obtain won't buy me a pot to p*ss in.