FAQs

Currently, if you are aged over 65 and are in receipt of Pension Credit, your entitlement is assessed at the start of an Assessed Income Period (AIP) which may run for a period of up to 5 years.  During your AIP, you do not need to report any changes in income, savings or pensions which might impact on your entitlement to receive Pension Credit.  If you are aged over 75, your AIP will remain in place until your household circumstances change, for example, if you move into a care home.

The Pensions Act 2014 introduced changes to abolish AIPs from April 2016. This means that, after your current AIP finishes, you will need to report changes to income or capital as soon as they take place.  If you take out an equity release plan, this could affect your entitlement to Pension Credit, unless equity release is taken out for an approved purpose such as essential home repairs.

The exact circumstances in which it would be considered acceptable to take equity release without impacting your entitlement to benefits, would ultimately be a matter for the Department for Work & Pensions (DWP) to decide.

AIPS after 2016 – in a Nutshell

• From 6 April 2016, no new AIPs will be set.
• If you already have an AIP that is due to end between 6 April 2016 and 31 March 2019, it will end – either on the original date on your Pension Credit Award letter, or earlier if your household circumstances change.
• If you already have an AIP that is due to end on or after 1 April 2019, it will end early and will not be renewed.
• If you currently receive Pension Credit, the DWP will write to you telling you the new end date 6 months in advance.  You can also find the new end date on the DWP website.

The Council is keen to ensure that if you are proposing to enter into an equity release plan, you fully understand that this may have an impact on any Pension Credit to which you are entitled and that you avoid taking a decision which may result in your losing out financially. All equity release plans are sold with full financial advice, and your adviser will take this issue into account.  The Council also requires your equity release provider to make sure that you receive independent legal advice on the implications and potential consequences of taking out an equity release plan, to help you make a fully informed decision.