Will taking lump sum pension payment be capital or income?

DerekDR
DerekDR Community Member Posts: 4 Listener
edited September 2024 in Benefits and income

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  • DerekDR
    DerekDR Community Member Posts: 4 Listener

    Hi

    Hope someone can help.

    I have been offered a small pot amount by a pension provider. This amounts to about £3,300 less tax. If I take it my savings would still be less than £6,000

    I currently claim housing benefit, so the question is if I take the amount, will it be classed as income by the council, thus reducing HB or will it be taken as capital and have no affect on HB

    Thanks in advance for any help
    Derek

  • Jimm_Alumni
    Jimm_Alumni Scope alumni Posts: 5,713 Championing

    Hi @DerekDR, welcome to the community 😊 I hope we can help!

    Given you are taking from the pension once and not as a continuous income this should, as far as I am aware, be treated as capital. When it comes to your council it would not hurt to double check with them perhaps?

    I'll just move this over to our benefits category so other people can offer their ideas!

  • DerekDR
    DerekDR Community Member Posts: 4 Listener

    Many thanks for your help

  • poppy123456
    poppy123456 Community Member Posts: 64,456 Championing

    Yes, it's treated as capital, not income. As it doesn't take your total capital to more than £6,000 it will not affect it.

    As it's a pension drawdown, you will still need to report it to your local Authority just so they know about it because they will highly likely receive information about it.

  • DerekDR
    DerekDR Community Member Posts: 4 Listener

    Manny thanks for your help @poppy123456

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