Annuities

We have a client - a Pensioner aged 67 - who failed to declare 50k in savings.  She claimed that as the interest was her only source of income apart from her state pension, it did not count as savings.  Currently, she does not qualify for Pension credit. She failed to declare this sum of money anywhere on the claim form - so predictably she is being called in for interview.  She has asked my colleague that if she now buys an annuity and claims an income now with these savings, will they still count it as savings, or disregard it as the regs suggest?  And then, could she claim Pension Credit? Or is it deprivation of capital?

Are the savings currently in a form that cannot be disregarded?  The remainder of this response assumes there is no disregard applicable and that the savings do not have any life assurance aspect.

If a clmt has capital that is not disregarded and converts such capital such that a disregard would apply, it will definitely be deprivation IF there is a significant operative purpose to obtain / increase benefit.  It doesn’t have to be the main purpose and it doesn’t matter if there are other purposes.  R(IS) 7/98 may be of interest.

Thanks - very helpful.  You are correct - currently savings could not be disregarded