What will happen if I spend my savings?

When the OP says ‘no other money’ , I think she is referring to her capital., except her pension pot.
You are still young and can probably work a few more years, save some money to build a capital.
I am also divorced. I guess I had a fairly good lawyer.

Sometimes people can get the Savings element of Pension Credit. Savings of up to £10,000 do not count in the decision to award Pension Credit. On the Savings element of Pension Credit a weekly payment is made and maybe entitlement to other benefits, although not sure which apply, other than Winter Fuel Payment and Free TV License. It only takes a 'phone call to the DWP to check eligibility.

Greciangirl

I wouldn’t rely on Pension Credit.
It’s very little amount. Approx £29 p.w.

Pension credit varies with the income you actually have and is whatever is necessary to bring your weekly income up to £218.15 if you’re single and £332.95 if you have a partner.

It can be in well in excess of £29. If you receive a disability benefit then it can be higher still, another £40 or £80 a week on top of Pension Credit.

Have not read the whole thread, but I would suggest you ask for advice from Citizens Advice or Age UK. They could do a benefits check for you and advise you properly on how your pension pot (and spending it) would affect your entitlement. Generally if you spend it on necessary things such as replacing your car ,and keep the receipts that shouldn’t be a problem. But if you give away money to your children or spend it on expensive holidays, that will be counted as deprivation of capital. Some of the advice on this thread is very inaccurate. For example, pension credit can be much more than £29 per week! It varies according to what other income & savings/capital you have. The most important thing is, if you get any amount of pension credit it automatically entitles you to full housing benefit, and winter fuel payment etc. But please check all this out with a proper advice agency.

I wouldn’t rely on Pension Credit.
It’s very little amount. Approx £29 p.w.

Mrs nonsmoker You are right to thin about what to do with you lump sum. The very last one you will have. the logic is to purchase the capital goods not covered by your landlord. this is going to be your car, maybe an airfryer , new bed excellent mattress, maybe a sewing macine , a computer, etc. this is not deprivation of assets.
Eventually you will qualify for various benefits. But you will have good quality items that support your day to day living.

I would sooner rent than buy a retirement flat as they are difficult to sell, do not hold their value and your family can end up lumbered with maintenance chagres for years while they try to sell it.

Take the capital from the sale of your home, it could be hundreds of thousands, enjoy life, go on a world cruise, get a new car and replace it every 2 years, If you live to a very advanced age, you may find the money is running out, you will be able to claim Housing Benefit. At the end, you will have also spent all the children's inheritance

I don't know if this has been mentioned but why don't you use it all on improving your home and garden. You could also get a nicer car.

That depends entirely on where the flat is.

An ex council flat would be more affordable.

Just what I was thinking

If you spend your savings you will rely on those of us who didn't.

JaneJudge

and suggesting the poor lady move to Luton is just cruel

😂👏👏 cruel but so true.

I agree. The 7 year rule applies to IHT only.

Please be aware councild can investigate far further back than the 7 years people quote if they are suspicious as they would be in this case. If you dispose of your savings, they will look into how you pay your rent as you are saying you cannot pay without your savings. Spend some but be careful.

Park homes, which are popular with older retirees, also have charges as the owner of the Park home rents the ground and there are also charges upon selling.

Is the money in your pension pot still growing OP? If so, then I can't see why you wouldn't carry on living as normal. As others have said, buy yourself a new car if that's what you would like, and update all appliances, furniture, etc., then when you're down to the point where benefits cut in, which I think is generally £16,000, apply for Pension Credit.

I would also add be aware that retirement leasehold flats can have big service charges and they keep going up, although they can include heating and hot water where there are communal boilers. The main problem I found was trying to find a buyer for the flat after Mum went into a care home. Eventually she got financial help from DWP via Pension Credit as the service and care home charges were very high together, but it had to be repaid once the flat was sold. The flat eventually sold for less than my parents had paid!

Just as a quick comment. If you check with DWP for a forecast of your state pension and find that you are missing some contribution years it might be worth buying some additional years. I did this about five years ago with some money after my Mum died. It made an appreciable difference in my weekly income as I had to take early retirement so my work pension is lower and had some missing NI contribution years. Martin's Money site has more info on this.

It’s deprivation of capital , it would be decided by DWP if you claimed pension credit or any other income related benefits and local authority if you went into a home. As others have said it does depend on what you spend it on though.

Hi. Thank u for all your messages, hope it help the other Lady, has helped me

This might help you regarding rules on “deprivation of capital”
www.gov.uk/guidance/universal-credit-money-savings-and-investments#:~:text=If%20you%20knowingly%20reduce%20your,off%20or%20reduce%20a%20debt

Barleyfields

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.

I understand that but I was referring to the posters who state that it may be deprivation of assets if OP spends the lot and also the OP's own question whether it would be. I was not only thinking of care as a whole, as I also recommended she was careful with her spending, but pointed out that was the only cases where I have experience of Deprivation of Assets coming in to force. I thought I answered both questions. However Monica had already explained the facts much more clearly than I did.

I think you need to get the specific information rather than make an educated guess about this. I’m sure someone like citizens advice would be able to answer for sure as they have legal staff at hand.
I think you will certainly be able to spend your pension pot freely without being penalised but I’m not sure if there’s a time limit. Eg does there have to be a minimum number of years between spending that and receiving state pension (and qualifying for pension credit)?
I do see where you’re coming from. You’re wanting to spend that money and then be able to claim pension credit as you know that your state pension won’t cover your rent for example. I think timing is all important. I would call someone and explain your situation in detail asking for advice.
That said, I’m not sure it’s the way I would choose to do it as it leaves you vulnerable in the longer term if you have no money at all to fall back on and would therefore have to rely on the state for the rest of your life. Good luck.

M0nica

Since mrsnonsmoker has no reason to suppose she will go into care in the foreseeable future, as I said before she is entirely free to spend the money how she choses, including staking every penny she has on the favourite for the next Grand National.

Deliberate deprivation of assets only applies to people in a situation where they can reasonably be expected to know that they may have care needs in the foreseeable future and deliberately spend their savings ahead of that event, in order to get subsidised care.

Absolutely spot on Monica, sorry I only saw your post now.