Workplace Pensions: Universal Credit
The question
To ask the Secretary of State for Work and Pensions, whether entitlement to a defined benefit occupational pension affects entitlement to Universal Credit if that pension is not drawn.
Answered by Sir Stephen Timms
It has been a long-standing policy of successive governments to encourage people to save for their retirement. Universal Credit is a means-tested benefit and takes occupational and personal pensions into account when the customer receives that income under the scheme rules.
Where someone reaches the age where Pension Credit is payable, the pension may be treated as available under the long-standing notional income rules. This means that a notional income is taken into account which has the effect of reducing the award of Universal Credit.
Means-tested benefits are paid for out of general taxation, and it is only right that a customer avails themselves of their own financial resources before relying on benefits. These rules provide a fair balance between the needs of the customer and the taxpayer who pays for the cost of means-tested benefits.
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