Will my small pension pot effect my ESA

Captianjack

I have small pension that I took out in my twenties, I can now cash this in and its around £6300.00 but after paying tax on it I will get around £5500.00 total lump sum.
I claim ESA wondered would taking this payment effect my ESA, I  did read that if it was under £6000 it want effect it, but my total figure is £6300 before tax and then pension company take the tax before they pay me and give me the lower figure. If I take this lump sum I will Notify the ESA and send them copies of the paper work and my bank statement, but just wanted to check this money effect my ESA at All.

poppy12345

The lump sum will be classed as savings for means tested benefits. If any part of your ESA is Income Related and the total amount you receive from your pension takes your total savings to more than £6,000 then you will need to report the changes. There will be a £1 deduction for every £250 over £6,000. Savings of more than £16,000 will end any means tested benefits.

If any of your ESA is contributions based/New style ESA then this won't be affected.

Captianjack

Thank you for the reply, my partenr works 10 hrs a week and is awollowed to earn first £20.00 the rest is stopped from the ESA
so I am not sure what ESA we get sorry.

poppy12345

It sounds like at least part of your ESA is Income Related but it makes no difference anyway if the lump sum doesn't take your total savings to the amount stated above. Savings of less than £6,000 are disregarded.

calcotti

Captianjack said:

Thank you for the reply, my partenr works 10 hrs a week and is awollowed to earn first £20.00 the rest is stopped from the ESA
so I am not sure what ESA we get sorry.

Some of your ESA must be Income based then but it could be a mix of contribution based and income based. You can look at your award letters to see, although these can be difficult to understand. Alternatively ring ESA and ask them.

Captianjack

So if I have PiP payments and ESA payments go into my bank account and I already have a balance of £1500.00 then the pemsion pot of £5500.00 would this then take me over the £6000.00 classed as savings.

calcotti

Captianjack said:

So if I have PiP payments and ESA payments go into my bank account and I already have a balance of £1500.00 then the pemsion pot of £5500.00 would this then take me over the £6000.00 classed as savings.

The ESA payments are ignored as capital for a fortnight after you receive them. If you already have £1500 and add £5500 then  this makes £7000 which obviously takes you over £6000. The excess £1000 means that your income based ESA entitlement would be reduced by £4/week.

Captianjack

Thank you for the comments really helpful