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Pension lump sum

grinchy12
grinchy12 Posts: 3 Newbie
in Benefits & tax credits
Hi , can anyone tell me if the lump sum from an Occupational pension is taken as capital and disregarded for Universal credit? It is under £6000 and I know they will take the monthly amount off my UC £ for £. Thanks

Comments

  • pmlindyloo
    pmlindyloo Posts: 13,104 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    grinchy12 wrote: »
    Hi , can anyone tell me if the lump sum from an Occupational pension is taken as capital and disregarded for Universal credit? It is under £6000 and I know they will take the monthly amount off my UC £ for £. Thanks

    A lump sum from an occupational pension is not disregarded and is treated as capital with a monthly yield (i.e treated as income) each month.

    You can have £5999 in capital but anything above that is treated as your getting a 'yield' from it and will reduce your UC accordingly.

    See Appendix 1 for the assumed yields:

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/618960/admh1.pdf

    Have you taken advice about taking this lump sum?
  • xylophone
    xylophone Posts: 45,910 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Have you taken advice about taking this lump sum?

    He might not have a choice.

    Some occupational pensions pay an automatic lump sum at retirement.
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