What will happen if I spend my savings?

You seem to be thinking only of possible future care, win. I agree that at her age and not anticipating needing care, she need not worry about deprivation of assets in order to avoid care costs. However, what is exercising her mind seems not to be care, but the need for benefits to enable her to pay her rent and whether spending and giving away money would disentitle her to benefits.

Mouseybrown60

The current weekly amount of pension credit is £218.15 per week, more if you get DLA or PIP.
The only deprivation of assets I knew of was a case where someone received a large redundancy payment and spent the lot in a few weeks in order to qualify for JSAIB.
The DWP will not come after you. That would only come into play when someone fails to declare their savings or occupational pensions. That is not the case here.
I don’t know the rules regarding housing benefit and council tax though, but I think you should certainly apply. (Nothing ventured, nothing gained).
Anyway, good luck mrs nonsmoker!

There are actually a lot of deprivation of assets cases, but usually only where people with a diagnoses have disposed of their income, usually to their children to avoid paying for care.
If Op has not had a diagnoses and is not guaranteed to need care they should not worry about deprivation of assets. The money is yours and you can spend d it how you like. People hear of these cases but get their wires mixed up. So if no diagnoses do what you like but of course plan your finances so you can live in the best possible way till the end.

Buying a property would not necessarily be a wise investment if you haven't got enough savings to get repairs or maintenance done.
Any reasonable person would want to ensure that they had a safety net for care, Barleyfields, as to spend the money on something which will put you at risk of not being able to afford to live would be foolhardy.
We have found that trying to find £9500 per month for my mother's dementia care has put a whole different complexion on how we spend her money. Whereas we would have once bought her stuff because she wanted it, we consider everything much more carefully just in case she outlives her money. It has nothing to do with trying to claim benefits, it is to make sure we can't be accused of deprivation of capital. When she lived at home, she had windows with gaps you could get a hand through but when I told the Social Worker I was replacing them, he cautioned me to be careful. You can replace stuff, you can't improve it. When I upgraded her wheelchair, it was an anxious moment because I wanted her to be able to get around more so wanted an electric one. Would that be an upgrade? Who knows but I suspect once her money has gone, I'd be able to put up a good fight on that one!

Sorry didnt take into account OP's age. Allira makes good points. I think it's just my own paranoia but the government does seem to be tightening up everywhere. Just go careful and I'd keep paperwork for any monetary gifts for tax purposes.

Don’t forget you can withdraw 25% TAX FREE from your pension pot. Then the remainder is liable to be taxed.

I wouldn't rely on getting pension credit as with only the basic state pension I can't get it .
Housing benefit don't pay all your rent . If you own your own home you can't apply for a council property.
I'd save your money until you see what happens.

As someone up thread said, buy yourself a small retirement flat. Renting is dead money.

Took my 35 years to get disability benefits. And I was born disabled. On the advice of our then GP when my health got worse he said to apply this was 1988. Turned down no diagnosis.

My husband died in 2004 aged 47 his private pensions paid out lump sum . We had an endowment mortgage which just paid off what we own . If it had reach maturity 5 years after my husband died would have had lots of money . But death pays less.

Had my diagnosis in 2022 applied for PIP given zero on everything. Brain Charity got me solicitor pro bono and went to tribunal in 2023 18 months after receiving the PIP forms and won got enhanced PIP for living and enhanced PIP for mobility indefinitely back dated to when I had my forms. PIP is not classed as income .

Had my full state pension last and because I only had £5,000 in savings get £70. 04 pension credit per week . Plus 48p per week from what had been my husband's state pension. Thanks to the CA I get the pension credit. I own my bungalow out right . But having the pension credit means I get money off my glasses which needs changing every year due to my neurological condition. I paid for the adaptions in my bungalow myself . Should say my husbands money run out as I inherited half my mom's estate .

I am grateful for getting full state pension and my bit of pension credit and because of my PIP . I went on holiday for the first time in 19 years.

So the OP who has left only wish I had that kind of money. As without the PIP I would have been penniless before getting my state pension and pension credit.

PinkCosmos

JaneJudge

could you use it to buy an over 55s retirement property? I live in a very expensive area and there are retirement properties for @60k that look like perfectly nice flats. It would at least solve the rent issue in the future?

The problem with this is, there is always a service charge.

My MIL lives in a retirement flat and the service charge is around £1200 a year, so £100 a month. Many are higher than this.

thanks PinkCosmos, others on this thread have enlightened me to this also. There is always a 'catch' isn't there? no affordable housing for anyone

Apologies, should have read the whole thread. The service charge has already been mentioned.

and suggesting the poor lady move to Luton is just cruel

There must be loads of people in the OP position though. How do we not know she doesn't already live 'up North'? Where has she said she lives in Cambs or East Anglia?

I've well and truly lost the plot on this thread

JaneJudge

could you use it to buy an over 55s retirement property? I live in a very expensive area and there are retirement properties for @60k that look like perfectly nice flats. It would at least solve the rent issue in the future?

The problem with this is, there is always a service charge.

My MIL lives in a retirement flat and the service charge is around £1200 a year, so £100 a month. Many are higher than this.

If you are 63 now, then you have another four years until you reach State Pension age. I don’t think you have said what you SP will be but Pension Credit will only top your income up to £218.15 per week at current rates. If you have 35 years of NIC which currently gives a SP of £221.20 per week then you won’t qualify for Pension Credit. The upper income limit for PC is always kept deliberately just below the rate of the new State Pension.

The question is whether you would qualify for Housing Benefit (and Council Tax Discount) which are not dependent on receiving Pension Credit.

I suggest trying an online calculator to see what you might be entitled to. Turn2Us is good and you can play with different scenarios.

benefits-calculator.turn2us.org.uk/

MoneyHelper explains deprivation of assets and notional capital:

www.moneyhelper.org.uk/en/benefits/problems-with-benefits/how-do-savings-and-lump-sum-pay-outs-affect-benefits

It says:

If, at the time, you wouldn’t have been able to predict needing benefits, it might not count as deprivation of assets.

You might be asked to provide paperwork and receipts to back up the date, and the reasons for getting rid of savings or assets. If it’s decided you have deliberately deprived yourself of savings or assets, you’ll be treated as if you still had them. This is called notional capital.

That first sentence is key. You are already predicting that you will need benefits so you might be in danger of being accused of DoA but it would very much depend on how you spent the money. Buying a modest car or making some modest home improvements as future proofing might be considered differently to taking holidays or giving money to relatives.

Use the calcultor and seek advice from CAB or Age UK. They will have experience of different scenarios and databases of similar cases they can refer to.

Yes, I think the thread went on to paying for care which probably annoyed the OP.

Anyway, I think mrsns has left the building.

My impression was not that the OP was concerned about future care, though she used the phrase ‘deliberate deprivation of assets’, but about her ability to obtain benefits to assist with paying rent. That came across (to me), very strongly though she berated me for saying so.

Homestead62

I'd hang onto it as you may need it for your care. Councils are definitely tightening up as they are so short of money and yes, it would be seen as deprivation of assets.

Not everyone needs to go into care.

If, at 62 your immediate need is to replace your car then of course you should do so. There is no need to live a life of misery, depriving yourself of any enjoyment because, at some unspecified time in the future, you just might need to go into a care home.

Less than 3% of elderly people go into a care home and less than 25% need care at home of some kind.
Deprivation of assets to me would be realising you might need care in the not-too-distant future and giving away lump sums to your family, putting your house into your children's name, deliberately disposing of your assets.

Penny-pinching to the point of not going on a holiday, driving around in a car which needs constant repair, in order to pay for care you might never need will do you no good at all.

It is difficult for people to uproot themselves in later life, and it is a shame that the OP might have to do this.

It is also a shame that people who have saved into pensions (or other savings) have this used against them when it comes to getting money that those who don't are given. Means-testing traps people in poverty, and I will never understand why more of us don't resist it.

However, that is the situation the OP is in. She has saved, and will have to use her savings to pay the rent until she has next to nothing left, and only then will it be paid, so effectively she has saved for nothing. She could move away from her support networks and start again in retirement, and then be allowed to spend her own money on herself, or she can stay put and pay it to a landlord until sh's no better off than if she hadn't saved in the first place. The flip side of that, or course that if the OP were given HB, that would be unfair to those who have saved to buy a house and not pay rent in retirement.

The only way I can think of to avoid this situation and other similar ones is to have a much higher (non-means-tested) pension payable to all who have contributed, but this would mean much higher taxation and is too late for people already in later life. We can't expect that to be funded by the young, but bringing it in now for future generations might protect them from finding themselves in similar situations.

Barleyfields

My take was that the OP lives in a shared ownership property and therefore owns a share and pays rent on the rest. She might be able to buy a further share (not always possible) and thereby reduce the amount of rent she pays.

That would certainly be the ideal solution (for me anyway) Barleyfields but I got the impression, maybe wrongly, that that wasn't possible..

My take was that the OP lives in a shared ownership property and therefore owns a share and pays rent on the rest. She might be able to buy a further share (not always possible) and thereby reduce the amount of rent she pays.

I think that the OP didn't like the truth.. she is in a flat which she part owns and with very little equity by the sound of it. She will find it difficult to pay the rent when she retires and so is hoping she'll have it paid with Housing Benefit. However she won't be entitled to that because she will have a lump sum of about £45.000..
so her question, as I understand it.. is should she dispose of that money so that she can claim Housing benefit and pension credit.. or try to survive on her pension and the lump sum..
It's risky either way and in her position I would consider moving North to a much cheaper area and buying a little house outright..

It's difficult without all the information to make really helpful comments.
Really staying where you are, part owning a property sounds like a good investment.
And getting help from Age uk and citizens advice, good move too.

mrsnonsmoker
Thank you to all who gave advice I’ll leave the thread now so that the posters who’ve taken over the discussion can chat away. I’m not sure if they understand that you normally discuss what the OP has posted but hope they enjoy my thread

I fail to see the need for heavy sarcasm. Threads can meander and develop a life of their own, particularly when OP has been unclear in their information.
But as has been said, we are not the CAB or a Financial Consultant but a discussion forum where we share experiences, yes, advice, but also opinions.
Sorry this was not what OP wanted on what she deemed HER thread.

I'd hang onto it as you may need it for your care. Councils are definitely tightening up as they are so short of money and yes, it would be seen as deprivation of assets.

As I got totally confused over whether mrsnonsmoker rents, owns, part-owns the property she lives in and why she can't buy an annuity with the remainder of her pension fund when she retires, I'll leave the thread too.

Unless more information comes to light to make the situation clearer.