Your pension is safe, and the law already protects this money at your age

Your State Pension comes from the years you paid National Insurance, not from how much you've got in the bank. So getting this money won't change it at all.26

The government also can't take any of the payment back to cover your pension or your other help.12

Your State Pension is based on your National Insurance record, so savings and compensation never reduce it.26 That part is settled.

There's a government office (the Compensation Recovery Unit) that can claw some benefits back out of injury payouts. State Pension, Pension Credit and Housing Benefit aren't on its list, so it can't take any of them back from yours.12 It's still worth asking the solicitor to show you the certificate, which I'd expect to read nil.

State Pension entitlement turns on the NI record only.26 The Social Security (Recovery of Benefits) Act 1997 Sch 2 lists the recoverable benefits against each head of loss; SP, PC and HB are absent, and recovery never touches damages for pain, suffering and loss of amenity.12 The CRU certificate itself was not seen. Damages are outside capital gains tax (TCGA 1992 s51(2)); interest on them is taxable income.24

Normally, if you have more than £16,000 saved, your help with rent stops. Money paid because you were hurt is different. For people your age, the rules say to ignore it, and they don't say for how long.2

Lots of websites say it's only ignored for one year. That rule is real, but it's for people who haven't reached pension age.4

Pension Credit, Housing Benefit and Council Tax Reduction look at your savings. Ordinarily the first £10,000 is ignored, every £500 above that is treated as £1 a week of income, and above £16,000 Housing Benefit and Council Tax Reduction stop altogether (unless you get the "guarantee" part of Pension Credit).78

Injury compensation doesn't go on that scale. The pension-age rules ignore an amount equal to any payment made because of a personal injury, whether it's in a trust or not, and they set no end date.12 The DWP's own guidance for its decision makers says "indefinitely".3 Council Tax Reduction for pensioners in England uses the same wording, also with no time limit, and councils can't change it.34

Ordinary capital at pension age: £10,000 disregarded, tariff income of £1 a week per £500 or part above that (SPC Regs reg 15(6)), no upper limit for PC; HB(SPC) reg 43 sets a £16,000 upper limit, lifted by the guarantee-credit passport.78 English pensioner CTR is prescribed nationally (SI 2012/2885, reg 14 making Schs 1 to 6 mandatory) on the same capital model, and Sch 6 para 17 carries the same open-ended PI disregard; paras 22A and 22B of that Schedule show a 52-week limit where one is intended.934

SPC Regs Sch V para 16(1) disregards "an amount equal to the amount of any payment made in consequence of any personal injury"; para 16(2) disregards the whole amount administered by a court or "under a trust" for the claimant. HB(SPC) Sch 6 para 17 is identical.12 DMG 84410 gives "indefinitely".3 The 52-week construction appears in IS Regs Sch 10 para 12A and its working-age siblings.4 Claimant-facing commentary routinely states it as universal.23 Not checked: the pending SI 2026/1063 and 2026/1072 amendments, which legislation.gov.uk flags against para 15 rather than para 16.

My guessFrom April 2026 the full new pension (£241.30 a week) is a little more than the amount Pension Credit tops people up to (£238.00).5 So if you get the full pension, you probably don't get Pension Credit. Your help with rent and council tax can still carry on without it. I need to see your pension letter to know for sure.

InferenceFor 2026-27 the full new State Pension is £241.30 a week and the Pension Credit minimum for a single person is £238.00.5 The other part of Pension Credit, savings credit, is closed to anyone who reached pension age after April 2016.6 So if you get the full new State Pension, you're probably not on Pension Credit, and the things worth protecting are Housing Benefit and Council Tax Reduction.

I don't know your exact pension or rent, so this is reasoned from the rates, not from your letters. A free benefits check with Age UK or Citizens Advice would settle it.

Inference2026-27 rates: nSP £241.30, SMG (single) £238.00.5 SPCA 2002 s3(1) restricts savings credit to those reaching SPA before 6 April 2016.6 A single claimant on full nSP with no housing-cost addition has no guarantee credit, so HB and CTR are assessed on their own capital rules rather than passported. Her award letter, rent and any reduced nSP (contracted-out deduction) are missing data.

If one day you need help at home or a care home, the council looks at your money again, with different rules. There, injury money in your normal account is only ignored for one year. Money in a trust is ignored for as long as it's there.10

A trust also keeps the money obviously separate, so nobody can mix it up with your savings.

My recommendation, reasoned from the rulesIf you ever need council-funded care at home or in a care home, the council does its own money check, with limits of £14,250 and £23,250 for 2026-27.11 In that check, compensation sitting in your own account is only ignored for 52 weeks. Money in a personal injury trust is ignored for as long as it's there.10

A trust also keeps the money visibly separate from your other savings, which is the thing that saves an argument if an officer applies the wrong rule.

A bare trust is the simple kind: the money stays yours for tax and you can ask for it whenever you like. The other kind (discretionary) brings inheritance tax charges you don't need.20 It's a one-off solicitor's fee; ask for a fixed quote.

InferenceCare and Support (Charging and Assessment of Resources) Regs 2014 Sch 2: para 15 imports IS Sch 10 para 12 (trust, no time limit); para 16 imports para 12A (untrusted, 52 weeks), excluding sums a court identified for care.10 2026-27 limits: lower £14,250, upper £23,250.11 Bare trust: beneficiary-transparent for income tax and IHT; discretionary falls into the relevant property regime unless a vulnerable-beneficiary election is available, which a healed fracture would not usually support.20 Set-up cost: no primary source; advertised fixed fees were reported but not verified.

The people who look after a trust are called trustees. You can be one, but not the only one.27

If I were a trustee from Australia, nobody would owe any tax over there.28 But Australia would count the whole trust as Australian, the bank would have to tell the Australian tax office about me,14 I'd probably have to send in a tax form every year,29 and some banks won't open the account at all.38

So it's better if it's you and someone you trust here. I can still help as your attorney, and step in later if I move back. The research doesn't all agree on this, but I think the fuss isn't worth it.

You can be a trustee yourself, but you can't be the only one; two or three is usual.27

I had two research runs look properly at what happens if I'm one of them from Australia. The answer has four parts:

• No Australian tax. The trust would count as an Australian "resident trust estate",13 but the tax rules leave out UK interest that belongs to a UK resident, so nobody would be assessed on it.28
• Probably a yearly Australian return anyway. The 2026 lodgement rules require the Australian-resident trustee of any trust that earned income to lodge a trust return, and I couldn't find an exception for this kind of simple trust.29 One report pointed to an Australian Tax Office statement that might excuse it; I couldn't open that statement to check.
• The bank reports me to the Australian Tax Office every year, because every trustee counts as someone who controls the account.1430
• Fewer banks will take it. Buckinghamshire Building Society won't open accounts for anyone with a foreign tax residence;38 Metro Bank needs at least half the people connected to the trust to live in the UK and says to ask about anyone outside the US and EU.37 No bank page I checked said yes to an Australian trustee.

My judgementNone of that is a legal bar, and the reports split on it (two were relaxed about an overseas co-trustee, two advised against). For a £30,000 account, though, it's a lot of paperwork for nothing. My suggestion: you plus one UK person you trust as trustees, me as your attorney under a Lasting Power of Attorney for your own affairs, and me named as a replacement trustee if I ever move back.

Personal injury trusts are excluded from HMRC's Trust Registration Service.15 The rule describes the kind of money rather than requiring a working-age benefit claim, so both follow-up reports read it as covering you,36 but HMRC hasn't said so in terms. Ask the solicitor to confirm in writing.

Trustee minimum: a sole beneficiary cannot be sole trustee; two to four is the practical range.27 ITAA 1936 s95(2)(a): a resident trust estate if "a trustee… was a resident at any time during the year of income".13 Assessment: s97(1)(a)(ii) and s98(2A)(d) reach a non-resident beneficiary's share only to the extent attributable to Australian sources; ss99(2)(c) and 99A(4A)(c) exclude presently entitled, foreign-source income of a non-resident beneficiary from the residual charge. On a deed giving her present entitlement to all income, no assessment arises.28 ITA 2007 s475 keeps the trust UK-resident too.16

Lodgement: Requirement to lodge a return for the 2026 income year (F2026L00618) s6(6), Note 3: a trustee of a trust estate that derived income lodges a Trust tax return 2026, by the Australian-resident trustee; s7 has no bare or transparent trust exception and the instrument does not reference PS LA 2000/2 (read 18 Oct 2026).29 Panel split: the Claude follow-up relied on PS LA 2000/2 paras 2 to 7 (transparent trusts exempt); the ATO page returned 403 here, so that exemption is unverified. The Codex follow-up held that no tax due is not the same as no return due.

CRS: a trust holding only a depository account is not an Investment Entity, so it defaults to a Passive NFE whose trustees are reportable controlling persons; Australia is a reportable jurisdiction.3014 Banks (own pages, 18 Oct 2026): Metro requires at least 50% of key account parties (trustees, settlors, beneficiaries) UK-resident, exceptions for some countries, enquire for parties outside the US and EU;37 Buckinghamshire BS opens no account for any individual with a foreign tax residency.38

TRS: MLR 2017 Sch 3A para 18 defines excluded PI trusts by reference to IS Regs reg 46(2) and Sch 10 para 12; both follow-ups read the cross-reference as describing the fund, so a pension-age claimant's trust qualifies. No HMRC statement addresses age.3615

The landlord will want you to sign something saying this settles everything. That's normal for the arm. It can't stop them having to fix your home in future; that part would be thrown out by the law.17

The landlord shouldn't take rent arrears out of your money, and the Housing Ombudsman says it doesn't like landlords doing that.32 Ask for the deal to say it's paid "in full, with nothing taken off".

A secret-keeping clause can't stop you complaining to the Housing Ombudsman.33 Ask for the deal to say so anyway.

Ask the solicitor how much they're keeping. There's a top limit on their extra fee.21

Expect a "full and final settlement" clause. It can fairly close the injury claim, but any term that tries to remove the landlord's duty to keep your home in repair is void by law.17 Still, ask for wording that limits the deal to the injury.

Rent arrears. Without your agreement, the landlord has no automatic right to deduct arrears, recharges or service charges from injury damages; the cases on "set-off" need the two claims to be closely tied, and an injury claim and a rent account aren't.31 No court has decided this exact situation, so it's worth closing off in writing: ask for the payment to be "in full, without deduction, set-off or counterclaim". The Housing Ombudsman's own guidance says compensation shouldn't be offset against arrears, particularly where that would be unfair.32

Confidentiality. A secrecy clause can't take away the Housing Ombudsman's power to look at a complaint about repairs or how you were treated. In one 2023 case the Ombudsman said a landlord's "full and final" wording should make clear that accepting it doesn't stop a resident going to the Ombudsman, and called the landlord's approach inappropriate.33 No court has ruled on a secrecy clause in a case like yours, so ask for that carve-out in writing.

On deductions, the solicitor's "success fee" is capped at 25% of the compensation for pain and past losses.21 Ask for a written breakdown before you sign.

Bank protection covers £120,000 per person per bank, with extra temporary cover for injury compensation, so a £30,000 payment is covered.22

LTA 1985 s12 voids covenants excluding or limiting s11 (and s9A fitness) obligations; a release of accrued claims remains effective.17 Set-off: legal set-off needs liquidated mutual debts; equitable set-off needs a close connection and manifest injustice (Geldof [2010] EWCA Civ 667 [43]), which a rent covenant and a PI claim lack; where the insurer pays, mutuality fails. No authority decides a landlord deducting arrears from PI damages.31 Housing Ombudsman offsetting guidance (Mar 2023) says Ombudsman-ordered compensation should not be offset against arrears; persuasive only for private damages.32 Confidentiality: the Scheme contains no NDA exclusion; Sanctuary HA 202217276 (15 Jun 2023) para 90 says full-and-final wording should make clear acceptance does not prevent referral. No case tests a PI-settlement confidentiality clause against the Ombudsman.33 CFA success fee cap: 25% of general damages for PSLA and past pecuniary loss, net of CRU (SI 2013/689 art 5).21 FSCS: £120,000 from 1 December 2025, with temporary high-balance cover for PI compensation.22

You still have to tell the DWP and the council you got the money, even though it's ignored. Send a letter and keep a copy.25

You can spend it on things you need. Even after it's spent, the same amount of savings stays ignored for Pension Credit. Just keep the letter and receipts.3

If anyone emails or rings to say "the bank details have changed", or offers to get money back for you, ring the solicitor on a number you already have.19

You still have to report the payment to the DWP and the council, even though it's ignored.25 InferenceDo it in writing, enclose the settlement letter, and say it's disregarded under the pension-age rules (the paragraph numbers are in the "In detail" view). That heads off the 52-week mistake before it's made.

The rules on "deliberately getting rid of money" still exist, but paying debts or ordinary sensible spending isn't caught.18 Better still, the DWP's own guidance says the protection follows the amount of your award, not the actual pounds: even after you spend the compensation, savings up to that amount stay ignored for Pension Credit.3 Taking money out of the trust as you need it counts as using your savings, not as income.35 Keep the settlement letter and receipts so the amount can always be traced.

People who've just been paid out get targeted: fake "our bank details have changed" emails, and fraudsters offering to recover money.19 Confirm any change of details by phone on a number you already know.

InferenceA bare trust is still your money, so it passes under your will when you die.20 It'd be worth making or updating your will at the same time.

Duty to notify changes: SS (Claims and Payments) Regs 1987 reg 32.25 Notional capital: SPC Regs reg 21, with reasonable purchase and debt repayment excluded; largely academic for disregarded PI money.18 DMG 84410 Note 1: "whatever capital the claimant owns (up to an amount equal to the payment amount) will be disregarded, even if the compensation is spent".3 Withdrawals of principal are capital, not income (SPCA 2002 s15 closed list); DMG 85345 says PI-trust payments are fully disregarded as income. The Codex follow-up flags that Sch IV para 11(2)-(3) limits disregards for discretionary-trust payments earmarked for food, fuel or housing costs, which matters only if the deed is discretionary.35 Recovery-room fraud per FCA.19 On death a bare trust fund forms part of the estate for succession and IHT.20 Grok stated trust capital passes under the deed outside the estate; that is wrong for a bare trust.