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19th August 2019
:: Blog | January 2009 (12 blogs) | Retirement savings penalised by DWP

 
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Retirement savings penalised by DWP 
 
I came across this article today and thought it worthy of bringing to your attention. It’s about the way pensioners’ savings are treated in calculating pension credit and in particular the assumption of the amount of interest that they receive. It’s quite eye-opening. For example, the article tells us that:  
  • The DWP assumes a ‘notional’ income of £1 a week for every £500 of saving - an interest rate of about 10 per cent.
  • Under the scheme, anyone with savings over £6,000 - or £10,000 if they live in a care home - has the interest  they receive (from their savings) deducted from pension credit payments.  
  • According to the DWP’s calculations, a pensioner who has saved £16,000 would be assumed to earn £1,040 a year in interest. But in reality they would only receive £216 at today’s rates - a shortfall of £824 a year.

See:

Mike Jones, MyCompanyPension.co.uk, 21st January 2009
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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