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Hi, my name is glenn1967! Taking a lump sum from partner's pension, how does it affect benefits?

glenn1967

hi to all,

I need to ask someone in the know regarding new style esa and withdrawal of my partners uncrystalised pension which she wishes to cash in and take a lump sum,

The amount is 11400 and 25% is tax free! Great !
We are aware that the remainder is taxable at hmrc ,

My question is that my partner is on contribution based new style esa and pip,

Also universal credit ,

My partner has upper motornerones disease, we need to confirm if she will have any benefits deducted..

I appreciate any advice please and thank you in advance ..

Glenn1967

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Kimi87

A pension lump sum won't affect NS ESA or PIP.

It will be treated as capital for UC.

Total capital under £6000: no deduction

£6000-£16000: £4.35 deducted for every £250 or part thereof over £6000

£16000+ No entitlement to UC.

glenn1967

hi kimmy87

thank you for your advise , much appreciated, just to confirm with your knowledge, she will need to report to U.C for deductions, has we have got an idea that after tax that she should be receiving around 6900 ,has she has already just recieved the tax free amount of 2700 ,

so this is 900 over the 6000 limit ,

if we are on the correct understanding this would a deduction from her benefit @ 4.35 x 9 = 37.15 total , or approximately..

thank you so much for your fast response , and hoping you are able to advise regarding above question .. thanks again !

Kimi87

The deduction is £4.35 for every £250 or part thereof.

If it was £900 over 6k, then the deduction would be 4 x £4.35= £17.40 deducted from UC award.

Yes any capital over £6000 needs to be reported.

glenn1967

hi kimmy87

Wish to thank you for the advice ..

can I ask one last question that if she should inform them firstly before receiving main funds or once received .

Thank again .

Kimi87

After she's received the money.

glenn1967

hi kimmy87

big thank you!! 😊

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