How to take capital from a pension pot and get more benefits, have a bigger income, and keep the capital! 

One of the consequences of the pension freedoms is that many people now leave all or part of their pension pot sitting unused or growing, where previously it went quickly into an annuity.

That means that it gets taken into account for Pension Credit as a resource for benefits, in a pretty special way.  It’s not treated as capital but as a notional annuity value, calculated from the Government Actuaries Department tables and the current 15 year Gilt yield.

It has some rather odd effects on benefits entitlement, for example a client could take capital out of a pension pot and
• increase their benefits
• gain access to passported benefits
• have a higher overall income
• still have the capital in the bank

Taking some income from their pot could have no effect on their benefits at all in many cases too.

I’ve put up some details and examples on my Welfare Futures blog at bit.ly/gmTkEy .