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Inherited pension
Don’t have all the details as client coming in tomorrow.
Client on MTB, her husband has died and she has inherited his occupational pension. She has the option to take lump sum now (almost £40000) or leave and wait until she reaches pension age herself. Will it be treated as notional capital if she leaves in the pension pot until she retires?
See our factsheet on Pension freedom and benefits section 5.2.
If your pension pot remains untouched and you are below pension credit age, its value is ignored as a capital asset for the benefits above
with the benefits above being:
* Income Support
* Income-based Jobseeker’s Allowance
* Income-related Employment and Support Allowance
* Housing Benefit
* Council Tax Support or Reduction
* Child Tax Credit (CTC)
* Working Tax Credit (WTC)
* Universal Credit
So she’s probably best to leave until she reaches state pension age herself, as it is taken into account if she does draw down any of the money.
Thanks Paul, I think our concern is that she has inherited the pension so it’s not something she’s paid into herself and so it may be treated differently?
Thanks Paul, I think our concern is that she has inherited the pension so it’s not something she’s paid into herself and so it may be treated differently?
i should be exceedingly surprised if that were so. it is now HER pension, not her late husband’s, and is the same as any other pension in her hand (or in the pot, in this case). might be different if the pension schemes rules insisted she take a lump sum now but from what you say that isn’t so (and would, in any event, be very unlikely).
Thats’s great Claire, thanks
Thats’s great Claire, thanks
hey, but this IS the DWP under THIS government