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Does anyone have info on cashing in private pensions?

Sandy_123

Hi does anyone have any proper info on cashing in private pensions, I've been googling aimlessly. I can take take a private pension, but trying to weigh pros and cons.

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Comments

poppy123456

It depends whether it's a lump sum you want or a weekly/monthly income. It also depends on what benefits exactly you're claiming, whether it will affect them. I'm sure someone will advise if you can give more information.

Sandy_123

Its a lump sum not sure of what amount and so much each month I'm on lwcra uc

poppy123456

If you take a monthly amount then this will reduce your UC £1 for £1 so in my opinion, it will not be worth you doing this at all because you won't be financially better off.

The lump sum won't affect your UC if it doesn't take your total savings to more than £6,000 on the last day of your assessment period.

Sandy_123

Yeah that's not worth doing. I'm guessing a lump sum less then the cut off savings amount would be seen as unearned income?

calcotti

Sandy_123 said:

Yeah that's not worth doing. I'm guessing a lump sum less then the cut off savings amount would be seen as unearned income?

No. A lump sum is capital. If your capital remains below £6000 will have no impact on UC. Capital between £6000 and £16000 would reduce your UC by £4.35/month for every £250, or part thereof, over £6,000.

Unearned income would be what regular pension payments are classed as and, as poppy says, this is deducted in full.

Taking pension income while on UC would be very foolish because you will gain nothing by way of current income but will obviously reduce your pension pot. Effectively all you would be doing is transferring your pension savings to the government.

Sandy_123

Yeah it would be foolish I guess it's best to leave it until state pension age

poppy123456

I'm not sure what else Pension Wise can advise with, other than what's already been advised.