Pension maturing and on UC

loubylou_1971
loubylou_1971 Online Community Member Posts: 7 Listener
in Benefits and income

Hi I am 55 in June and my pension matures then. We are on UC and I get the LWCRA element and am also on PIP. I was thinking of getting a lump sum of £6,000 to keep it under the threshold. Does anyone know if I would be able to get this yearly without it affecting the benefits.

Comments

  • Adrian_Scope
    Adrian_Scope Posts: 14,387 Online Community Programme Lead

    Good afternoon @loubylou_1971.

    Pension payments like an annuity or income drawdown are treated by Universal Credit as unearned income. As you mention, lump sums are treated differently and are counted as savings/capital.

    However, if lump sums are taken regularly (for example on a yearly schedule), I believe they can be treated as income rather than capital and therefore deducted £ for £ from your UC.

    Also remember that any lump sum you withdraw is added to any savings or capital you already have, and this will start to affect your UC once your total capital goes over £6,000.

  • loubylou_1971
    loubylou_1971 Online Community Member Posts: 7 Listener

    Thanks for the reply Adrian_Scope. I was going to withdraw the £6,000 to pay off debts and use it for home improvements. I understand that any savings over £6,000 will result in a reduction of £ for £ over this threshold.

  • OverlyAnxious
    OverlyAnxious Online Community Member Posts: 5,799 Championing
    https://forum.scope.org.uk/discussion/comment/1102249#Comment_1102249

    Hi,

    That's not quite correct. The savings deduction is only £4.35 per week for every £250 you have above £6000.

    The £ for £ deduction is for Unearned Income instead, which a regular pension payment would be classed as.

    Also worth noting that for UC, the savings figure is taken on the final day of the Assessment Period. So it would be in your interest to take the payment early in the AP, and use some of it before the end of that AP, which will make sure you are below £6000 on the day that it matters.

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