pensions

Retirees missing out on £1,500 pensions top-up

Pensioner homeowners are missing out on thousands of pounds of extra income by failing to claim the full entitlement to state benefits, according to the latest Just Group annual state benefits survey.

Nearly half (46%) of retired homeowners are failing to claim any state benefits at all causing them to miss out on an average of £1,423 in 2019, up from £1,139 the previous year.

The three key state benefits that can be claimed by pensioners are guarantee pension credit, savings pension credit and a council tax reduction.

Retirees at risk of £3,500 state pension loss

The benefit is typically paid on behalf of spouses who are below state pension age but are financially dependent on a basic state pension recipient.

It was scrapped for new claimants from 2010, as a result of legislation in the 2007 Pensions Act, but transition arrangements enabled existing claimants to carry on receiving the benefit for a further 10 years.

The total loss of its removal will be around £33m and see individuals losing as much as £70 a week.

Ask Money: could you enlighten me on the lifetime allowance?

January 6, 2020

I am a regular subscriber to Money Observer and have been for a number of years. I find your information and factual data extremely helpful.

I have a Sipp, and I supplement the state pension and some other income with annual small uncrystallised lump-sum payments (UFPLS), typically of 3-4% a year, usually with the aim of using up my full basic-rate tax allowance. I think I understand the situation regarding the lifetime allowance for such withdrawals.

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How to trim tax on pension pot withdrawals

The ushering in of an era of pension freedom by George Osborne four years ago was a revolutionary change. Retirees were no longer compelled to use their pension pot to buy an annuity that would provide them with an income for life; instead, they could leave their money invested and dip into it at will.

This freedom is now taken for granted and widely used. The latest figures from HMRC show that in any given quarter hundreds of thousands of people are taking advantage of the pension freedoms. The average quarterly withdrawal now stands at just over £7,000.