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Forum Home  →  Discussion  →  Housing costs  →  Thread

Annuity value of pension pots

Nan
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Generalist team - Hammersmith & Fulham CAB

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Total Posts: 155

Joined: 8 July 2010

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

Gareth Morgan
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CEO, Ferret, Cardiff

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Joined: 16 June 2010

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.

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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Joined: 12 March 2013

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”.