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Private Pension Pot and Benefits

mindless

Hi guys - I'm completely at sea here so just looking for any advice really. It's a complicated situation so I'll try to be as brief as possible !

Ok, so two years ago I was diagnosed with a life limiting heart condition and had to give up my own business (I was a dog walker so not making millions !), and apply for benefits. Currently, my partner and I get some UC (housing benefit and CT discount), LCWWRA, Enhanced rate PIP and my partner gets the carers allowance bit of UC. Not complaining about any of that - to be honest, the DWP have been great and we are grateful for the help.

However, in 6 months I'll be 55 and I have a small private work pension from years ago and I was intending to withdraw the 25% tax free sum and then do a drawdown of £500 per month just to help things at bit (for instance, I'd love to get a cleaner as housework is way beyond me these days). The 25% was going to be spent on clearing debts (including loans from family), getting an electric bike, a couple of new beds (we have to sleep separately these days and both beds are knackered) and then if anything left over then a final holiday abroad which we haven't been able to afford for a while.

My question is, will this affect my current benefits ? I'm not sure if I take £500 per month out whether that counts as income or savings ?

We rent privately so we top up our rent each month by about £250 so that would be good to get rid of, but we can't spend money on home improvements as its not our house. I spend a LOT of time upstairs which is where the bathroom is, so last year I started a degree course with the OU as a means to give my day a bit of meaning so also not sure whether being a student affects anything ? I've just realised that I haven't informed PIP or the DWP about this either !!

Sorry for the long ramble, but I don't want to get into trouble and it's really difficult to get an answer online or from the Goverment's pension advisors.

Thanks in advance

Mindless

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Comments

Poppy_

Hi, PIP is not means tested, so it won’t be affected. UC is means tested, so
this may be affected, by taking out your pension.

I hope this helps

poppy123456

Hi,

Any lump sum you take will be classed as savings for UC and council tax reduction. For UC the lower amount is £6,000 and for every £250 over this amount will reduce your UC by £4.35 per month. The higher limit is £16,000. You can pay off debt when claiming UC and this won't be classed as deprivation of capital providing you pay that debt before the last day of your assessment period.

Savings limits for council tax reduction will depend on your local Authority, some have a maximum limit of £6,000.

If you take a monthly payment then this will reduce your UC £1 for £1 because it's classed as income. In my opinion, it wouldn't be worth taking a monthly/weekly amount because of this reason.

janer1967

Hi there

As poppy states taking a pension before state retirement age will impact your benefits and may not he the best action

Being a student won't affect pip but could affect other benefits and dwp should be notified

@poppy123456 will be able to advise regarding this

poppy123456

mindless said:

last year I started a degree course with the OU as a means to give my day a bit of meaning so also not sure whether being a student affects anything ? I've just realised that I haven't informed PIP or the DWP about this either !!

I completely missed that student part. Thanks @Janer. Is this part time? If so then yes, you can be a part time student and still claim your current benefits. Although you should still report the changes to UC. As you claim PIP you can also be a full time student and still claim UC and LCWRA. If there's a maintenance loan available to you this will affect your UC, regardless of whether you take that loan or not.

calcotti

As poppy and janer have advised, taking regular pension income is pointless because it will not benefit you in the slightest. If you take pension of £500/month your UC will go down by £500/month (assuming it's more than this in the first place).

As regards studying Advice to Decision Makers says

H6087 Open University courses are not F/T and are normally followed at times that would fit in with employment. Most of the course material is studied and undertaken in the person's home and not at an educational establishment. However they are still undertaking a course of study. The DM should have regard to whether the course is compatible with the individual’s expected hours of work and their work search requirement. Any award made as a direct result of their participation on the course should be treated as student income in the normal way.