Lump sum pension withdrawal
Options
berry61
Community member Posts: 60 Connected
Hi everyone,
I asked a week ago about withdrawal of a lump sum from my private pension pot instead of taking a weekly/monthly amount.
I read the reply from poppy123456 about a lump could be taken that would be considered savings.
Am I correct from the reply given that a lump sum upto £6000 would be considered as savings ?
When I have made a withdrawal in the past before we were claiming U.C the pension company has to automatically Inform HMRC about this amount and they take it into account regarding whether tax will be deducted from the lump sum depending on current earnings for that tax year.
So can I assume that if I take a lump sum of £6000 and have no other savings at all in bank accounts etc then this wouldn't affect our U.C
Also are there any special circumstances that U.C allows regards the use of a lump sum pension withdrawal.....say if I took a lump sum from my pension pot and immediately used that full amount to pay off my debt such as credit cards and i could provide the proof the money was used for that.
Myself and my wife are in receipt of U.C as a couple over 25, receiving the carers element and Transistional protection from WTC.
We both receive the standard daily living and standard mobility of PIP.
I am currently on week 2 of long term ssp after surgery and my wife works 16 hours per week.
Any advice would be appreciated
Thanks
I asked a week ago about withdrawal of a lump sum from my private pension pot instead of taking a weekly/monthly amount.
I read the reply from poppy123456 about a lump could be taken that would be considered savings.
Am I correct from the reply given that a lump sum upto £6000 would be considered as savings ?
When I have made a withdrawal in the past before we were claiming U.C the pension company has to automatically Inform HMRC about this amount and they take it into account regarding whether tax will be deducted from the lump sum depending on current earnings for that tax year.
So can I assume that if I take a lump sum of £6000 and have no other savings at all in bank accounts etc then this wouldn't affect our U.C
Also are there any special circumstances that U.C allows regards the use of a lump sum pension withdrawal.....say if I took a lump sum from my pension pot and immediately used that full amount to pay off my debt such as credit cards and i could provide the proof the money was used for that.
Myself and my wife are in receipt of U.C as a couple over 25, receiving the carers element and Transistional protection from WTC.
We both receive the standard daily living and standard mobility of PIP.
I am currently on week 2 of long term ssp after surgery and my wife works 16 hours per week.
Any advice would be appreciated
Thanks
Comments
-
berry61 said:
So can I assume that if I take a lump sum of £6000 and have no other savings at all in bank accounts etc then this wouldn't affect our U.Cberry61 said:
Also are there any special circumstances that U.C allows regards the use of a lump sum pension withdrawal.....say if I took a lump sum from my pension pot and immediately used that full amount to pay off my debt such as credit cards and i could provide the proof the money was used for that.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. -
Thank you for your reply Poppy, your a god send on this forum ..
So could I withdraw more than the £6000 then if i told and proved to UC that i have used it to paid debts off ?
Also how would I actually inform UC about it, either before i was going to do it or when the mo ey has actually landed in my bank account, and how would i word it say on my journal, or would they automatically be notified via HMRC or maybe via PAYE whilst I'm still receiving ssp.
I just want to do it correctly without getting into trouble with triggering overpayments etc
Thanks -
Have you considered getting an appt with "pension wise" via CAB they give excellent advice on pensions including their affect on benefits.2024 The year of the general election...the time for change is coming 💡
-
Hello woodbine, thanks for the reply. I did see pension wise when I had options with my pension once I was 55 but not since. I wasn't sure they would have the knowledge regards how pension would affect benefits
-
berry61 said:Hello woodbine, thanks for the reply. I did see pension wise when I had options with my pension once I was 55 but not since. I wasn't sure they would have the knowledge regards how pension would affect benefits2024 The year of the general election...the time for change is coming 💡
-
Ok thanks for that help
-
Yes, you can withdraw more than £6,000. You will need to report it once the money goes into your bank. UC can't action something before it happens. Report a change of circumstances and then click, money, savings and investments.
Your UC entitlement is based on your circumstances on the last day of each assessment period. If the money goes into and out of your bank before the last day of your assessment period then there will be no affect on your UC. Paying off debt is allowed so just tell them what you did with the money, if they ask, which they may if it's more than £6,000.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. -
That's great poppy thanks again
-
Poppy would a withdrawal as above affect any council tax reduction. As we are now on UC and I am get ssp we have applied for a council tax reduction to see if we are entitled to any, not had the result yet.
Thank you -
All local Authorities have their own rules and some have a maximum savings limit of £6,000 before entitlement to Council Tax reduction ends. You will need to check their website to see what the rules are in your LA.
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. -
Thanks for the advice poppy I will look into that.
-
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.
-
I have just downloaded a pdf of the council tax reduction scheme from my LA website. Its very complex to understand to be honest, written in legal jargon so I will contact the help line after the Easter break and ask the relevant question.
Thanks -
Hi Poppy123456,
Just to update you on the council tax reduction we applied for at our Local council. After completing and providing all the information requested we are not entitled to any discount.
They take into account my wife's 16 hours work per week, my ssp, and the amount of universal credit entitlement and we are above the earnings threshold.
They don't take into account our PIP amounts we receive.
Thanks -
This is one thing I can't advise on because all local Authorities have their own rules for CTR.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.
-
Thanks i understand poppy
Brightness
Categories
- All Categories
- 13.1K Start here and say hello!
- 6.7K Coffee lounge
- 69 Games lounge
- 387 Cost of living
- 4.3K Disability rights and campaigning
- 1.9K Research and opportunities
- 200 Community updates
- 9.3K Talk about your situation
- 2.1K Children, parents, and families
- 1.6K Work and employment
- 773 Education
- 1.7K Housing and independent living
- 1.4K Aids, adaptations, and equipment
- 590 Dating, sex, and relationships
- 363 Exercise and accessible facilities
- 740 Transport and travel
- 31.9K Talk about money
- 4.4K Benefits and financial support
- 5.2K Employment and Support Allowance (ESA)
- 17.2K PIP, DLA, and AA
- 5K Universal Credit (UC)
- 6.2K Talk about your impairment
- 1.8K Cerebral palsy
- 872 Chronic pain and pain management
- 181 Physical and neurological impairments
- 1.1K Autism and neurodiversity
- 1.2K Mental health and wellbeing
- 317 Sensory impairments
- 820 Rare, invisible, and undiagnosed conditions
Do you need advice on your energy costs?
Scope’s Disability Energy Support service is open to any disabled household in England or Wales in which one or more disabled people live. You can get free advice from an expert adviser on managing energy debt, switching tariffs, contacting your supplier and more. Find out more information by visiting our
Disability Energy Support webpage.