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Cashing in small pension. Effect on Benefits.. and Tax?
KrazyKel
Posts: 492 Forumite
Hi, Im asking on behalf of my mum!
She has a small pension of just under £10,000 from when she worked years ago, she is currently 56 and was thinking about cashing them in now due to her health/condition!
She is on Disability Living Allowence (High Care, Low Mobility)
plus Employment Support Allowence (Support group - I think)
If she was to cash these in, how much tax would she pay?
Would it effect her current benefits too taking the lump sum?
Only rang the company who she has her pension with today to update her address details and found out how much her pension was worth.
Thanks
She has a small pension of just under £10,000 from when she worked years ago, she is currently 56 and was thinking about cashing them in now due to her health/condition!
She is on Disability Living Allowence (High Care, Low Mobility)
plus Employment Support Allowence (Support group - I think)
If she was to cash these in, how much tax would she pay?
Would it effect her current benefits too taking the lump sum?
Only rang the company who she has her pension with today to update her address details and found out how much her pension was worth.
Thanks
Make £10 a day Challenge June - £170
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Comments
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I don't think it would affect anything to be honest, it is such a small amount in the scheme of things.
She certainly wouldn't pay any tax on it.
DLA would not be affected and really not sure about ESA but I don't think so.
Get her to ring up the DWP, they would know definitely the rules.make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
Disability would not be affected as not a means tested benefit but it would effect your esa as it's means tested and the pension would be classed as income over 6000 which is the lower limit anything between 6000 to 16000 would reduce esa0
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would not affect cont based sea,but it would income related sea if it took her savings above 6k from 6k to 16k £1 of benefit is lost for every £250
as i understand the new rules it maybe that tax would be deducted on the 75% of the pension that is taxable and have to be reclaimed at the end of the tax year0 -
Ahh thank you, will have to find out what ESA she is on... Hasn't worked in the last 3-4 years so dont think it would be cont based... have to find out
and also the savings part too how it will reduce her benefit if she takes it all and has over 6k then....She doesn't have anything really saved at the moment so she thought she could have the money in an ISA instead
(She gets full housing/council tax benefit too)
Will have to ring up this week and find out! Maybe, ifMake £10 a day Challenge June - £1700 -
It's best to get a full breakdown of what is being claimed.0
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