Taking pension pot in one lump sum

6CSP7
6CSP7 Online Community Member Posts: 1 Listener
in Benefits and income
Can I have some advice? Tried to ask CAB but they had no idea. I am on contribution based ESA. I am now 55 years and was notified that I can withdraw my pension fund (I had no idea that I had this - this was from when I worked 20 years ago!) The amount is about £5000. If I take this as one lump sum now - how will my ESA be affected?

Comments

  • calcotti
    calcotti Online Community Member Posts: 10,000 Championing
    It will have no impact on your ESA. Depending on what other taxable income you have be aware that tax may be payable on sum of the pension withdrawal - and remember atet contribution based ESA itself is taxable so uses up some of your tax free allowance.
  • markfred67
    markfred67 Online Community Member Posts: 3 Listener
    Hi I am in the same dilemma as  can have a lump sum that just comes under £20,00it from a pension that my parents set up when I was 16 and don't know  how this is going to effect  my  benefits as on industrial injury  and esa does any know how this will affect my  benefits 
  • markfred67
    markfred67 Online Community Member Posts: 3 Listener
    Yes industrial injuries is contributing based and is counted as taxable 
  • markfred67
    markfred67 Online Community Member Posts: 3 Listener
    Email is contribution based
  • happyfella
    happyfella Online Community Member Posts: 519 Empowering
    my wife works for a supermarket and she took a lump sum and was told she would receive £900 back in tax. This year there was no tax rebabte from her work as she earns under the tax threashold and no tax back from her pension so she is confused. If you are gong to do a lump sum then i would suggest you speak to a professional as after my wife done it we found out there are lots of great options available
  • poppy123456
    poppy123456 Online Community Member Posts: 64,456 Championing
    markfred67 said:
    Hi I am in the same dilemma as  can have a lump sum that just comes under £20,00it from a pension that my parents set up when I was 16 and don't know  how this is going to effect  my  benefits as on industrial injury  and esa does any know how this will affect my  benefits 

    Contributions based ESA is not affected by any savings and neither is Industrial Injuries Benefit. If you take a lump sum from a pension pot then this would be savings.
    If you drawdown a weekly/Monthly amount then anything up to £85 per week will not affect your ESA. For every £1 over this amount your ESA will be reduced by 50p.

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