Would taking a pension lump sum affect ESA payments?

Burtkatarack said:

Regarding New Style ESA and taking the 25% tax free lump sum. I live alone with no income. All I have is my ESA and £2000 in the one bank account. I am in the group and have paid my NI for 30 years. I assume I am on contributory. My 25% is over £16,000 by a couple of grand. Looking at answers here I can take the lump sum without affecting my payment in anyway. Question is I'm over the savings limit? Also do I still need to inform DWP of this lump sum if it's not affected, as the New ESA is not means tested? 

Burtkatarack said:

I know local Councils have their own rules, but do they use the rules regarding paying off debt or giving money away as a no no?
The money in my account will be taken all in a cash withdrawal to pay off a debt and buy new windows and a boiler. I own my own house. Leaving the same amount as I had previously on the last assessment. They ask for three months of statements. Any ideas?

Burtkatarack said:

I have no other income. I meant assessment for reduction of Council tax. I have done it twice this year. Once when I left my job and once when my partner left. Apart from the 25% off, I'll  have to wait. The money will go in mid April, so a third change. The money will be withdrawn regardless as I owe it to my father for paying off my house over three years. I have been waiting years to repair the house. I can take the hit this year but surely once it's  spent it's spent. Yes some of it's a debt, but if I don't have it how can I possibly pay my Council tax? I will only have about 2K left in the account. In my city I can have upto 10k savings. But what happens in the new financial year? Will that be seen as spent and clear? Surely they can't keep assessing on "ghost" money, and can they really control how I spend my own hard earned money? 

Burtkatarack said:

Example: The Council ask for 3 month's worth of statements. I will let them assess this year on the change. They will see that money going in. They will not give a discount. I will ve withdrawing the money for said meantioned purposes. Come the new financial year I will only be showing well  below the 10k mark in savings. Are you saying they will ask, what's happened to all that money last year when I ask for a reduction again?  The three months of statements will only show under 10k. 

Burtkatarack said:

I'd like to thank Poppy for the input.
I contacted DWP today and no issue with a lump sum from the pension. It will not affect my ESA payments. I asked them to make a note on record of my future action so that I didn't have to ring them again. They were not concerned about the amount. It's not means tested. You are allowed over £16000 in savings.  To reiterate, my only income is the New Style ESA.  I am in the group and have paid enough NI. The DWP will contribute to my NI while I recieve it and pay my stamp. I can take regular draw downs from my private pension and it will not affect the ESA payments unless it's over £80+ a week. Or I can take two large lump sums a year. Both options are taxable so I would be put on a high emergency tax code at first but would probably receive a refund when final calculations are made. Very helpful site. If I have missed something, please correct.