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Annuity value of pension pots
Hi
My client is 68 year old pensioner in receipt of SP and OP £76pm. He retired in 2014. His HB has been recently terminated and he was informed that he has been overpaid £18k.
Client had earlier purchased a pension plan from Legal and General with a maturity value of c£35K. He decided not to cash it in on retirement. He does not remember the details of the annuity offer.
He cashed in the fund in Feb 2017 and received c£31K after tax, and informed the council..
HB was initially suspended- the council requested evidence of the income he could have received had he cashed in the plan. Client wrote to L&G but was informed they were unable to provide info re the annuity offer of 3 yrs previously. He informed the council of this. HB wrote to the cl on 10.7.17 informing him that a notional income of £999.99 pw had been applied to his HB assessment and that he no longer qualified for support, hence £18k overpayment.
Cl has requested reconsideration and provided letter from Legal&General; dated 30/06/17 which states that they can not provide a copy of the annuity quote. They confirmed that the fund value on 31/03/2014 was £33, 037.82
HB responded on 15/08/2017 letter. More info is requested. The council wants to know what his annuity would be worth in 2015 and 2016. Cl requested this info from Legal&General; but they responded that they re not able to provide this.
The deadline for all info to be submitted to HB is 15/8/17. Please advise.
Thanks
Justyna
That figure could be calculated using the GAD tables and the 15 year gilt rates in force at the time. So they won’t rather than can’t. There is a duty on the company to provide such figures but i’m out of the office and i’m not sure whether it applies to HB or historically. £999.99 is clearly bonkers. Ask them for the calculation they used to arrive at that.
That deadline date is also, I hope, wrong.
Yes it does apply to HB: Reg 67(6) and (7) of the HB(Persons who ...) Regs 2006. To be fair the Reg is silent about retrospectivity - it contemplates evidence being provided to support an assessment of notional income going forward under Reg 41(4) to (7), but you would think a pension provider ought to be able to provide a reasonably accurate assessment of what the income would have been around that time. Certainly more accurate than the Council’s worst case assumption. Obviously £999.99 isn’t meant to be a realistic estimate, it’s a way of saying “in the absence of evidence to the contrary we have assumed it might be just enough to extinguish your HB”.