Pension lump sum

berry61

Hi everyone,

I have withdrawn a lump sum from my pension previously last year and paid off debt with the whole amount i received, this was reported to UC and was allowed, and i was receiving SSP as well at that time. HMRC did deduct tax from this lump sum at source which is standard policy and I'm due this tax back at the end if this financial year april 2025.

I now receive Esa support group since SSP stopped after 28 weeks, so would this tax refund be taken into consideration by either UC and DWP (esa) , would it be classed as "other Income"

If I decided to withdraw another small lump sum after April 2025 and if our savings where still under the £6K limit with or without this lump sum amount, would this withdrawal still be allowed again by UC and Esa because it's under the savings capital limit and it would still be classed as a lump sum & not savings.

Thanks

poppy123456

A tax rebate would not affect your ESA because it’s not means tested.

For UC it will be treated as earnings in the assessment period in which you receive it. If it’s less than your work allowance it will have no affect anyway.

If you withdraw another lump sum then the same rules will apply for UC.

It wouldn’t affect ESA even if it was more than £6,000 because your ESA isn’t means tested.

You will still need to report the withdrawal for both benefits.

Please be aware that if you continue with regular lump sum withdrawals UC could treat that as unearned income, which would affect your UC.

berry61

Thank you @poppy123456 , I won't be doing it on a regular basis maybe once a year.

Hope your keeping ok and happy belated new year to you and family, take care.