Where this fits
This has to be checked before a release is arranged, and you should be given the answer in writing.
Mike Chan
Mortgage Adviser
It can. Releasing money and holding it as savings can create deemed income for means-tested benefits and reduce or end an award.
For Pension Credit, savings and investments of £10,000 or less are ignored. Above that, every £500 counts as £1 a week of income, whether or not the money earns anything.
So releasing a lump sum and leaving it in the bank can reduce or end an award. Council tax support and other means-tested help apply their own rules and can be affected as well.
For Pension Credit, every £500 of savings above £10,000 counts as £1 a week of income, whether or not the money earns anything.
It can. Savings of £10,000 or less do not affect Pension Credit. Above that, every £500 counts as £1 a week of income, so released money held as savings can reduce or end the award.
It can. To claim Universal Credit you must have £16,000 or less in money, savings and investments, so a release held as savings can take you over the limit. Savings below it can also reduce the payment, so ask the Department for Work and Pensions how a release would change your award before you go ahead.
No. The basic and new State Pension are not means-tested, so releasing equity does not affect them.
A local authority financial assessment looks at capital and income, so released money held as savings counts.
It can. A drawdown facility lets you take money as you need it, which keeps your savings lower and means interest only runs on what you have taken.
Not always, and spending or giving money away to stay under a threshold can be looked at closely by the authority assessing you. Take advice before acting on that basis.
This has to be checked before a release is arranged, and you should be given the answer in writing.
Mortgage Adviser
Your first call is with an Account Manager and is at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.