Does anyone have info on cashing in private pensions? — Scope | Disability forum
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Does anyone have info on cashing in private pensions?

Sandy_123
Sandy_123 Member Posts: 2,192 Pioneering
edited November 20 in Benefits and financial support
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
    poppy123456 Member Posts: 24,723 Disability Gamechanger
    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.
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  • Sandy_123
    Sandy_123 Member Posts: 2,192 Pioneering
    Its a lump sum not sure of what amount and so much each month I'm on lwcra uc
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  • poppy123456
    poppy123456 Member Posts: 24,723 Disability Gamechanger
    edited November 20
    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.

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  • Sandy_123
    Sandy_123 Member Posts: 2,192 Pioneering
    edited November 20
    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?
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  • calcotti
    calcotti Member Posts: 3,348 Disability Gamechanger
    edited November 20
    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.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
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  • Sandy_123
    Sandy_123 Member Posts: 2,192 Pioneering
    Yeah it would be foolish I guess it's best to leave it until state pension age 
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  • woodbine
    woodbine Community Co-Production Group Posts: 5,632 Disability Gamechanger
    Pension wise are great for advice and it's free:

    https://www.citizensadvice.org.uk/debt-and-money/pensions/get-ready-for-your-pension-wise-appointment/
    I am a person with epilepsy not an epileptic, my illness doesn't define me.
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  • poppy123456
    poppy123456 Member Posts: 24,723 Disability Gamechanger
    I'm not sure what else Pension Wise can advise with, other than what's already been advised.
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