Our autistic daughter is unlikely to benefit from a pension we invested in for her - what should we do about it? Steve Webb replies

In the early life of our youngest daughter, we invested several thousand pounds in a stakeholder pension for her.

In subsequent years, it's transpired that she's on the autistic spectrum - this is likely to mean a life on benefits, where a pension later down the line will conflict with her benefits and be more disruptive than beneficial.

Is there any way this money can be accessed now to avoid these issues later in her life? 


Parents' dilemma: Our autistic daughter is unlikely to benefit from a pension we invested in for her


Steve Webb replies: I was sorry to read your concerns that financial plans you made for your daughter when she was small might turn out to be to her disadvantage.

The way that money in a pension affects benefits depends on which benefits you are receiving and how old you are, so I will run through the rules.

I will also explain the position with regard to accessing a pension early.

Broadly speaking, there are three main types of benefit, and the rules are slightly different for each.

The first main group of benefits helps to meet the additional costs of disability and includes things like Personal Independence Payments, Attendance Allowance, and Disability Living Allowance.

The good news is that these are completely unaffected by having money in a pension or by your income.

The second group are the National Insurance benefits. This includes things like Employment Support Allowance and Jobseekers Allowance.



For as long as you are receiving one of these benefits purely on the basis of your own contributions (known as 'contributions-based' ESA or JSA), then money in a pension would have no impact.

The third group are the income-related (or 'means-tested') benefits such as Universal Credit and also the income-related versions of ESA and JSA. Broadly speaking, any income is taken into account when you are assessed.

The rules on capital (that is, the money still sitting in the pension pot) depend on your age.

Under the age of 55, you generally cannot access your pension (though I explain one exception to this rule later). On that basis, money in your pension would be ignored when your benefit is worked out.

If you are aged 55 or over, but under pension age, your pension pot is ignored as long as you don't access it. However, if you do take money from your pension it will be taken into account when your means-tested benefits are worked out.

Once you are over pension age these income-related benefits would start to take account of her pension. They would not force her to take money out of her pension, but they would 'deem' her to be getting an income from it.

So, at this point, it is possible that even untouched money in a pension could reduce or eliminate income-related benefits your daughter was receiving.

You can read more detail about the rules here. 

On your second question about accessing the pot, there are very limited circumstances in which it is permissible to access a stakeholder pension pot before the age of 55.

This would usually only be where someone was terminally ill and expected not to live more than a year.

Apart from this, I'm afraid it would not normally be possible to access these funds before your daughter was 55.

But the good news is that, precisely because the funds cannot be accessed until she is 55, they should not adversely affect her benefits in the meantime, and the pension would only fully be taken into account once she reached pension age.


Former Pensions Minister Steve Webb is This Is Money's Agony Uncle.










What should we do about a pension invested for our autistic daughter?

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