Would taking a pension lump sum affect ESA payments? — Scope | Disability forum
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Would taking a pension lump sum affect ESA payments?

Foofighter
Foofighter Community member Posts: 6 Listener
Hi,
Just wondering if anyone can help with a question on ESA and accessing pension funds.... or point me in the right direction.
I am receiving 'new style' ESA with Support Group enhancement.
If I decide to take a lump sum from a pension will this affect my ESA payments?
Thanks v much
«1

Comments

  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    Hi,

    New style ESA is not means tested so any lump sums taken from your pension will not affect the amount of ESA you're entitled to. If you receive a weekly/monthly income from that pension then anything up to ÂŁ85 per week is also ignored. Over ÂŁ85 per week and there will be a reduction of 50p for your ESA for every ÂŁ1 of pension over ÂŁ85.

    If you're claiming any other means tested benefit like Universal Credit and Council tax reduction then any lump sum from your pension is classed as savngs.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • littleacorn
    littleacorn Community member Posts: 367 Pioneering
    Just wondering the same with old style ESA support group and taking a lump sum from a pension. I dont get any other benefits other than PIP
  • Foofighter
    Foofighter Community member Posts: 6 Listener
    Hi Poppy123456
    That advise is really helpful. Thank you so much !
  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    Just wondering the same with old style ESA support group and taking a lump sum from a pension. I dont get any other benefits other than PIP

    That will depend whether your ESA is Contrutions based or part Income Related top up. Contributions based ESA is the same as New style ESA. If part of your ESA is Income Related then any pension will affect the amount you're entitled to if you have a weekly amount from pension. If you have a 1 off payment then it's classed as savings.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    Hi Poppy123456
    That advise is really helpful. Thank you so much !

    You're welcome.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • littleacorn
    littleacorn Community member Posts: 367 Pioneering
    Thanks @poppy123456. My ESA is contribution based with no income related top up so good news for me. 
  • woodbine
    woodbine Community member Posts: 11,519 Disability Gamechanger
    Do remember that only the first 25% is tax free anything above that is taxed at your notional rate of income tax. I'm assuming that you are over 55? Have you got some free advice from penionwise via the CAB it can be done over the phone.
    2024 The year of the general election...the time for change is coming đź’ˇ

  • littleacorn
    littleacorn Community member Posts: 367 Pioneering
    Yes have got advice and it will only be the 25%. Have thought aboit taking all as it is not a great amount but that decision is still to be made. Just wish I could look into the future and see what financial position I will be in when I reach state pension age.
  • woodbine
    woodbine Community member Posts: 11,519 Disability Gamechanger
    The level of SRP ATM if you have 35 years N.I cont would be ÂŁ175.20 which currently increases by a min of 2.5% a year, you can get a SRP forecast on the .gov website, roughly if you have 11 years still before you reach 66 then the SRP will have increased by 30% (thats a rough calculation).
    If when you retire you have less than 35 years cont. then the SRP will be reduced.
    2024 The year of the general election...the time for change is coming đź’ˇ

  • leeCal
    leeCal Community member Posts: 7,550 Disability Gamechanger
    edited January 2021
    If you were to buy a stamp every week in order to build up your srp which one would it be and how much would it cost per week does anyone know?

    “This is my simple religion. No need for temples. No need for complicated philosophy. Your own mind, your own heart is the temple. Your philosophy is simple kindness.” 
    ― Dalai Lama XIV

  • littleacorn
    littleacorn Community member Posts: 367 Pioneering
    It wasnt about my SRP forcast I was thinking about it was would I be living as  a couple or a single person on benefits I was thinking about possibly claiming ESA UC HB etc but als I dont have a cystal ball.
  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    It wasnt about my SRP forcast I was thinking about it was would I be living as  a couple or a single person on benefits I was thinking about possibly claiming ESA UC HB etc but als I dont have a cystal ball.

    At the moment you live with your husband who works. Claiming UC now will depend on both of your circumstances because you'll need to claim as a couple because it's means tested. Your ESA will never be part of UC because it's contributions based.

    You can of course use a benefits calculator to check entitlement to UC with your husband. Help with any rent in the future will be through UC and not through housing benefit, unless you're already claiming housing benefit.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • woodbine
    woodbine Community member Posts: 11,519 Disability Gamechanger
    leeCal said:
    If you were to buy a stamp every week in order to build up your srp which one would it be and how much would it cost per week does anyone know?
    https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

    But remember some benefits also give you N.I credits towards your SRP and you only need 35 years of cont. for a full SRP (in most cases)
    2024 The year of the general election...the time for change is coming đź’ˇ

  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    woodbine said:
    leeCal said:
    If you were to buy a stamp every week in order to build up your srp which one would it be and how much would it cost per week does anyone know?

    But remember some benefits also give you N.I credits towards your SRP and you only need 35 years of cont. for a full SRP (in most cases)

    Yes indeed. Universal Credit does, also ESA/JSA and Income Support. However, if you're claiming ESA with a partner and you're not the main claimant then you won't have your NI credits paid towards your state pension. Carers allowance also pays NI credits. Child benefit pays NI credits up until the child is 12 years old.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • woodbine
    woodbine Community member Posts: 11,519 Disability Gamechanger
    Forgot that you can also claim N.i credits for what's called "carers credit" details below;

    https://www.gov.uk/carers-credit
    2024 The year of the general election...the time for change is coming đź’ˇ

  • Lisatho11987777
    Lisatho11987777 Scope Member Posts: 5,911 Disability Gamechanger
    edited August 2021
    <message removed at request of OP>
  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    @poppy123456 I just wanted to say when I was on esa before I went on universal credit I had was asked for details of my lump sum payment frim my pension 

    I also had to prove what I had done with it and had to send my bankstatements in 

    Thats what happend me 

    That sounds like you were claiming Income Related ESA, which is means tested. The thread is about New style ESA which isn't means tested, so savings and pensions of up to ÂŁ85 per week are all disregarded for this type of ESA.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • Lisatho11987777
    Lisatho11987777 Scope Member Posts: 5,911 Disability Gamechanger
    edited August 2021
    <message removed at request of OP>
  • poppy123456
    poppy123456 Community member Posts: 53,333 Disability Gamechanger
    edited January 2021
    @poppy123456 was on new  style esa on the support group when that happend 

    Are you 100% sure of that? May i ask when this was because New style ESA isn't means tested, it's a contributions based only ESA. May i also ask the reason why you moved to UC when you were claiming New style ESA? Do you still claim this as well as UC?

    This link here confirms my advice is correct. This was copied from this link.

    Your (or your partner’s) savings will not affect how much New Style ESA you’re paid. If your partner works, it does not affect your claim.

    Most income is not taken into account (but a personal pension can affect the amount you may receive).

    https://www.gov.uk/guidance/new-style-employment-and-support-allowance



    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • Lisatho11987777
    Lisatho11987777 Scope Member Posts: 5,911 Disability Gamechanger
    edited August 2021
    <message removed at request of OP>

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