Hi, my name is LucyBee! Will taking a lump sum pension affect my ESA payments?

LucyBee
LucyBee Community Member Posts: 1 Listener
edited December 2024 in Benefits and income

I receive ESA and am not yet state pension age. I now have a very small pension due which I plan to take as one lump sum which will generate a tax charge for 75% of the value. Will this impact my ESA payment?

I also work 15 hrs per week minimum wage.

Comments

  • OverlyAnxious
    OverlyAnxious Community Member Posts: 6,451 Championing
    edited December 2024

    Hi,

    Is this Income Related ESA or Contributions Based?

    If it's income related, the pension lump sum will be treated as savings. If you have overall savings between £6000 & £16000, there will be a deduction made of £1 per week for every £250 over £6000. Over £16000 and you lose the ESA altogether.

    If this is Contributions Based ESA, that is not affected by savings.

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