Finances and extra costs
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Private pension and ESA

picchypicchy Member Posts: 3 Listener
Hi there,

I'm 45 and looking to start a private pension. I receive income related esa and housing benefit. 

When I reach the age you could drawdown a private pension, currently 55, does anyone know if it would then be treated as capital / savings? I would have no intention of actually accessing the money until I reach state retirement age.

Many thanks for any help,


  • woodbinewoodbine Member Posts: 3,730 Disability Gamechanger
    Hi you won't have to access the money until you reach SR age, currently 66 for most increasing at some point to 67, the age you can access private pension funds is currently 55 but there are plans to increase that to 57. Any money you access will be treated as savings and might be taxable BUT the first 25% is always tax free.
    my advice is given freely and is correct to the best of my knowledge.
  • poppy123456poppy123456 Member Posts: 22,218 Disability Gamechanger

    Lump sums are treated as savings. Weekly/monthly income from that pension will be classed as income and reduce your Income Related ESA £1 for £1. If any part of your ESA is Contributions based then any pension of up to £85 per week is ignored but anything over that will reduce your ESA further by 50p for every £1 over £85 per week.

    However, as you are only 45 now then things could change by the time you reach the age in which you can withdraw from it so you will need to get futher advice when the time comes.
    Community champion and proud winner of the 2019 empowering others award. This award was given for supporting disabled people and their families for the benefit advice i have given to members here on the community.
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