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Contribution based ESA & taking small pot pension
- jimmybob
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10 years 4 months ago #133337 by jimmybob
Contribution based ESA & taking small pot pension was created by jimmybob
I am receiving contribution based ESA of approx £6,000 pa and haven't worked for many years. I have a small pension which I am considering taking in whole as a lump sum following the recent change in pension rules. The value of the fund is approximately £5,000 and falls within the scope of what is called a "small pot" pension. I understand that 25% of the fund can be taken tax free and the remainder of the pension pot treated as income and taxed accordingly. Would you be able to confirm that in respect of ESA and income, that the DWP will also view the remaining pension sum, after deduction of the tax free lump sum (£3,750) as income & not the entire " pot" of £5,000 ?
If my assumption is correct, it will mean that my resultant income will keep me below the £85 per week threshold, thereby avoiding any reduction in benefit.
Thank you.
If my assumption is correct, it will mean that my resultant income will keep me below the £85 per week threshold, thereby avoiding any reduction in benefit.
Thank you.
- Gordon
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10 years 4 months ago #133359 by Gordon
Nothing on this board constitutes legal advice - always consult a professional about specific problems
Replied by Gordon on topic Contribution based ESA & taking small pot pension
Jimmybob
I am afraid that we cannot give detailed financial advice on the forum, if you need this then you need to get face to face advice with from a trained advisor.
ESA(CB) has an £85 per week disregard for any pension income followed by a £1 per week deduction for every £2 per week of pension in excess of the £85.
Even though a claimants pension might not exceed the threshold for a deduction does not mean that they do not have to change the DWP of the change.
Gordon
I am afraid that we cannot give detailed financial advice on the forum, if you need this then you need to get face to face advice with from a trained advisor.
ESA(CB) has an £85 per week disregard for any pension income followed by a £1 per week deduction for every £2 per week of pension in excess of the £85.
Even though a claimants pension might not exceed the threshold for a deduction does not mean that they do not have to change the DWP of the change.
Gordon
Nothing on this board constitutes legal advice - always consult a professional about specific problems
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