Help with redundancy and paying a lump sum to my pension

Soozan123 · August 23

If I am being made redundant and I pay a lump sum to my pension pot while I am currently claiming universal credit what will happen I don't know what to do for the best

Albus_Scope · August 23

Hey there @Soozan123 welcome to the community. I hope you're having a nice weekend?

Paying a lump sum into your pension while claiming Universal Credit generally won't affect your Universal Credit, as pensions are treated as a form of capital, not income. However, if your existing savings (excluding the lump sum in your pension) plus the pension lump sum take your total capital over £16,000, you would lose your entitlement to Universal Credit and if it takes the capital over 6k, then you'd see a reduction to your UC payments.

Soozan123 · August 23

So does that mean that if I got say 24K and put £10K into the pension I would be over the amount

Soozan123 · August 23

What I mean is I don't have any other savingsnit would only be tge £14K that would be left frim the redundancy sorry it's all.so confusing

Kimi87 · August 23

I would recommend speaking to a trained benefits advisor, who can go through all the rules around pensions and UC with you.

https://advicefinder.turn2us.org.uk/

Deprevation of assets is something to be mindful of.

Albus_Scope · August 23

If you have over £5999.99 in savings, then your universal credit will be reduced by £4.35 for every £250 (or part of £250) If you have over £16,000 in savings, your UC would be stopped. But if all of that money is in your private pension, then it would not be affected, as it would be treated as capital, not income. I hope that makes sense?

Soozan123 · August 23

Thank you both for your replies

Help with redundancy and paying a lump sum to my pension

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