Will my pension affect my benefit entitlement?
I am almost 65. My monthly income is currently supported by a £294.40 Disability Living Allowance (DLA) and £452.92 Incapacity Benefit.
I also have a car supplied by Motability, which is replaced every three years with no cost to myself.
What will happen to these benefits when I reach 65 and start receiving the state pension?
Will I be worse off financially? And what will happen to my Motability car?
When you turn 65 your Incapacity Benefit will stop, as you then become entitled to claim your state pension. The basic state pension is £107.45 per week as long you have paid or been credited with sufficient NI contributions.
You may also be entitled to an amount of additional state pension, based on extra NI contributions you may have paid under the State Earnings-Related Pension Scheme (SERPS) or State Second Pension Scheme.
You can claim your pension up to four months before your 65th birthday, but you can ask The Pension Service for a pension forecast (0845 300 01680) at any time before then, which can tell you how much your weekly pension will eventually be.
When you are 65 you will become entitled to a larger personal income allowance before you have to start paying income tax. This means you will pay less tax on income such as your pension.
You should have received a P161 form from HM Revenue & Customs (HMRC) so it can confirm your entitlement to the age-related allowance. If you have not received this form, call HMRC to request one on 0845 300 0627.
DLA can only be claimed by people under 65, but as you have already been awarded it you can continue to receive it after your 65th birthday. So your DLA won’t change just because you turn 65.
When your current agreement with Motability runs out, you can make an application for another three years, as long as you are entitled to the DLA mobility component at the highest rate.