Inheritance and benefits question.

[marty21]

If he's happy to lock the money away for a few years he can put the entire inheritance into a private pension for himself (or as much as he's allowed - you can use previous year's allowances if necessary).

Pensions are (I think) exempt from consideration as deprivation of assets, and he can then draw the money down as required from age 55.

That would be my suggestion , pension funds don't count as capital.

 

[StoneRoad]

Can you start more than one pension fund in any one financial year ?
or have more than one private personal pension.

Ditto trust fund(s) for offspring ?

 

[strung out]

Sure but if they earn £10k a year and starting a pension now that's relief at source, they're only going to be able to put £8k in it without getting a fucking huge tax bill on the rest.

If he is a member of any pension scheme already, then he can carry forward previous year's allowances if he wants, up to a maximum of £40k per year for three years.

As above though, too much probably would be seen as deprivation of assets, but putting a smaller amount away would both be prudent from a retirement point of view and also help bring any capital down closer to the limit at which housing benefit is affected.

 

[sheothebudworths]

I did a bit more reading up on it and think you may well be right, although it's still possible to put some into a pension, as that would be seen as a reasonable use of funds to plan for retirement.

Apparently, the test for deprivation is a subjective one, so dumping the whole inheritance into a pension would be seen as notional capital for housing benefit, but a smaller amount possibly not. It would be up to the authorities (and eventually a judge if necessary) to decide.

Sorry if I came across as a tad mansplainy

Yes, there are no set rules - so much of it is about 'intention'.

And no worries - I was only hoping you may be right!

Personally, I think somebody with no pension provision starting a pension and putting inheritance into it would have a very good argument for that inheritance not being seen as deprivation of assets.

There are so many rational and sensible reasons why the rules are nonsensical - but ultimately it's all set up to keep poor people in their place.

 

[sheothebudworths]

Unless the fact that his son is an adult dependent/has additional, life long needs, makes any difference - which defo needs checking - he 100% couldn't otherwise put it into trust for any children, not even by way of a Deed of Variation (which he is apparently too late for now anyway), where the money effectively never becomes 'yours'.