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Inherited pension

 

MaggieB
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Dorchester CAB

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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?

     
Paul_Treloar_AgeUK
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Information and Advice Resources, Age UK

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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.

     
MaggieB
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Dorchester CAB

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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?

     
ClairemHodgson
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MaggieB - 07 February 2019 08:11 PM

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).

     
MaggieB
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Dorchester CAB

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Thats’s great Claire, thanks

     
ClairemHodgson
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MaggieB - 08 February 2019 11:13 AM

Thats’s great Claire, thanks

hey, but this IS the DWP under THIS government