State pensioners with certain amount in savings face being 'cut off' by DWP

James Rodger
·2-min read
State pensioners with certain amount in savings face being 'cut off' by DWP
-Credit: (Image: Reach Publishing Services Limited)


State pensioners have been warned the Department for Work and Pensions ( DWP ) could "cut them off" when they hit a certain income. State pensioners have been reminded of the savings cut-off point for benefits from the DWP including things like Pension Credit.

Age UK points out that for Pension Credit there is no upper limit, meaning your benefit won't be completely removed due to accumulating a large amount of savings. But if you have £10,000 or more in capital, the payments you receive will start to gradually reduce.

For every £500 you have over £10,000, it will be calculated as an extra £1 of income each week. Capital is all forms of savings and investments, including money saved from your benefits, lump sum payments, investments, land and property. Some forms of capital (including your home if you live in it) are not counted. Capital does not affect PC unless you have more than £10,000.

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Capital counted in full includes cash and money in bank or building society accounts, including current accounts, as well as fixed-term investments like National Savings accounts and certificates, income bonds, stocks and shares, the value of any property you own (but not the property you live in) and NS&I Premium Bonds.

It also extends to your share of capital jointly owned with someone who is not your partner and any savings or capital held by another person for you. If you've saved between £10,000 and £16,000 in savings and investments, it could also trim down your Housing Benefit and Council Tax Support payments, Age UK has warned.

The charity says income NOT counted includes the value of the home where you live if you own it, the value of a property you own that is not your home in certain specificcircumstances – for example, if you are taking steps to sell it, or a closerelative who is over State Pension age or incapacitated lives there and the amount of any debt accrued on a property such as a mortgage or a Deferred Payment Agreement (DPA) used for care home fees.

Other capital not listed includes the surrender value of life insurance policies, including where lifeinsurance is not the only aspect of the policy if the policy states howpayment on death is worked out (although, if a policy is cashed in, themoney received is normally counted as part of your capital), the value of a pre-paid funeral plan, a lump sum payment received because you put off (‘deferred’) claimingyour State Pension for a period of time or personal possessions such as jewellery, furniture or a car.

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