Is this feasible?

Just to reassure GNetters........My original post was certainly NOT about me or my partner. Nor was it a dig at anyone in genuine receipt of pension credit, PIP, WFP or any other benefit for that matter.

I had already formed the opinion that it was probably fraudulent and most certainly morally wrong anyway and I am well aware that financial institutions, businesses and employers submit an annual return to HMRC.

The part I was not sure about was with regard to the private pension not being drawn on.........personally, I couldn't wait to give back my uniform, and get my lump sum and pension. Doing that sort of 'went with the territory' where I worked to be honest.

The whole situation defined in my OP came up in conversation with a third party and, being both curious and morally concerned, I simply wanted to investigate further.

The 'third party' involved in all this will submit their findings so if it is happening it will be investigated and action will be taken, such is the establishment that myself and third party volunteer for.

Reading all your comments has been both interesting and enlightening; you can all rest assured that there is no fraudulent activity happening chez Mr&MrsA.

Yes, but by the time the investigation is complete, there will be a considerable amount of overpayment to be repaid and potentially action against the person making a fraudulent claim. Even prison.

The DWP will ask about the pension if you don't declare it. They have this information.

I don’t think that would be allowed, would you not have to declare it?

David49

So historic accounts before the age of joined up computers get picked up too.

Active accounts started before computerisation will be online.

Not to be online an historic account would have to have been opened over 30 or 40 years ago and not been accessed for 30 years or more. Whomesoever it belongs too must undoubtedly have forgotten about it by now and the institute it was invested it with will long ago have written ot off as a dormant account.

I have filled in a couple of forms for people who are entitled to pension credit.
I could be wrong but I seem to recall there were questions about assets and investments etc.

I agree it’s very difficult to evade disclosure now, it’s very difficult to hide assets now and would come to light in probate. Until then I’m pretty sure there are quite a lot of hidden assets aquired years ago

My understanding is that if someone is already receiving PIP before reaching SP age they continue to receive it. It is not means tested. people over SP age cannot apply for a new PIP award. Pension credit is means tested and not available if there are savings over a certain amount. Surely a pension pot should count as savings?

NonGrannyMoll

Beware - the laws around fraud are very strict and it's doubtful whether anyone would get away with this one - not least because the bodies which control pensions and other entitlements are not stupid (if you asked anyone in the relevant government department, they'd laugh you out of the room -- "Oh, THAT old chestnut!").

It’s all the more likely that a hidden private pension pot would come to light after death following Labour’s decision to bring such assets within the scope of IHT, with which I don’t disagree. The executors may then face a substantial bill for fraudulently claimed pension credit and any other means-tested benefits.

So historic accounts before the age of joined up computers get picked up too.

David49

I’m not certain but I think a private pension has to be taken at 75yrs old and changed to an annuity or other investment, it can’t keep accumulating as a pension.

When it comes to claiming benefits it is possible to not declare an investment or bank account, historic accounts might not get revealed in any checks. In the same way a cache of diamonds or gold sovereigns could be hidden, those who do that are not concerned about morality.

All banks, building societies, public companies and othe rfinancial organisations have to make a return to the HMRC each year listing dteails of their depositers, their balances and any interest added.

The only way to hide money from the tax authorities, is cash under a mattrass or valuable goods - jewellry, watches, etc etc.

I had several clients who had to repay Pension Credit, when the next annual check up showed they owned accounts they had forgotten about. One might have been deliberate fraud, but the rest were all small somes of money that people had forgotten they had. The most anyone had to pay back was a couple of £100s.

Beware - the laws around fraud are very strict and it's doubtful whether anyone would get away with this one - not least because the bodies which control pensions and other entitlements are not stupid (if you asked anyone in the relevant government department, they'd laugh you out of the room -- "Oh, THAT old chestnut!").

Cabbie21

If you asked because you know someone doing this, OP, please report them. It is fraud, and morally wrong to claim from public funds at the taxpayers’ expense when they have their own means.

Indeed, because if someone is doing this then they have withheld information and made a false declaration to the DWP. When caught, they would not only lose the benefits but could face prosecution and sanctions for three years.

If in the meantime their pension fund went bust - as sometimes happens through corporate mismanagement and fraud - or a reckless government action causes funds to fail as the Truss/Kwarteng budget almost did and Reform’s “Contract” (now abandoned) would have done - where would they be? Sanctioned and unable to claim any help.

The ruse wouldn’t work anyway, as M0nica and I have already explained above but why would anyone with a substantial private pension want to defer it to receive what would probably be a lesser amount in benefits?

It's been said that Pension Credit could be worth £3,800 p.a. or £75 p.w. although how that sum has been arrived at has been questioned by some. In 2024, the DWP itself said unclaimed PC was an average of £2,100 p.a. per household based on 2022 numbers. On top of Pension Credit, a claimant would receive WFP £200, WHD £150 and help with eye and dental care. Say the whole package was worth a maximum of £5,000 a year tax free.

For a basic rate taxpayer, that would equate to £6,250 in private pension income. I would not consider that a substantial pension after a lifetime of work.

Deferring a pension is taking a gamble that you are going to live long enough to enjoy it or even claim it. Typically a widow(er) or civil partner would receive 50%.

The main reason a deferred pension is paid at a higher rate (becuse growth cannot be guaranteed) is because with average life expectancy, the person won’t be receiving it for as long. The reverse is true if you take a pension early. It’s paid at a lower rate as you will, with luck, be receiving it for longer.

If all of this is some ruse because someone feel disgruntled at losing the WFP then it’s extremely petty but it’s what I have long said about means-testing and residual welfare. It causes division.

It is perfectly possible not to claim your private pension.
Not sure it would always grow. Probably depends what type of pension it is, and when it was taken out.

I dont know about the rest of your questions.

No.

Though I believe one can allow their private pension to accumulate and then leave it on to others after one passes.

If you asked because you know someone doing this, OP, please report them. It is fraud, and morally wrong to claim from public funds at the taxpayers’ expense when they have their own means.

Whether this is possible would depend on the nature of the private pension. However, not declaring an asset when claiming pension credit is fraud, as Cossy says. If this were someone I knew I would feel morally obliged to report them. It can be done anonymously.

I don’t believe this is feasible or possible, unless the person doing this has lied and is then committing fraud.

I've never heard of anyone doing this.

As for leaving it to let it grow, that could prove to be poor advice as growth could stagnate.

A bird in the hand is worth two in the bush, as the saying goes.

I’m not certain but I think a private pension has to be taken at 75yrs old and changed to an annuity or other investment, it can’t keep accumulating as a pension.

When it comes to claiming benefits it is possible to not declare an investment or bank account, historic accounts might not get revealed in any checks. In the same way a cache of diamonds or gold sovereigns could be hidden, those who do that are not concerned about morality.

The simple answer is no.

www.gov.uk/pension-credit/eligibility

If you’ve deferred your pension

If you’re entitled to a personal or workplace pension and you have not claimed it yet, the amount you’d expect to get still counts as income.

I don’t know how it worked, but someone I know who left well over £1m cash and 2 houses paid off when he died, had managed a few years previously (after IIRC a financial assessment) to get 50% of a few modifications to his house, paid for by the council.

As far as I can tell, he’d kept a lot of that cash well away from prying eyes, inc. those of his wife. We who had known him very well for a long time, had thought he was comfortable, if very tight! - but had no idea that he had anything like as much.

No it isn't.

This is because when assessing your entitlement for Pension Credit you must reveal ALL your investments and savings and ALL your sources of income, whether you draw that income or not. Any capital over £10,000 and you are assessed as getting a nominal income of £2 a week from it and that is added on to your income. An entitlement to a pension, even though you choose not to draw it will be included.

The capital value of a SIPP will be included, unless you buy an annuity, in which case the income from the annuity will be added to your income.

If your income is then too high to receive Pension Credit, you will not get the WFA.

PIP is not a means tested benefit and anyone who quaalifies for a PIP or AA will get the payment regardless of income.

“ In my own case - one of DH’s pensions is from a final salary scheme and I receive 100% of that and it will pass to the DDs on my death - if there’s anything left.”

This is not quite right - there can’t be anything “left” in a final salary pension. It’s not a pot but a continuous payment based on a percentage of the worker’s final salary. It certainly won’t pass to grandchildren. If it’s a pension fund “pot” then of course that’s feasible.

Probably, if you are the sort of person who likes to lie and cheat.

Of which there are many.