SIPP on benefits

the_mixer

Can you start a SIPP while on ESA long term and would it go towards your £6 to £16k capital which affects benefits? For example, could you have £5000 in savings then another £5000 in a SIPP which wouldn't affect how much you get paid weekly?

sevenhills

Fifty percent of contributions made to a personal or occupational pension are disregarded when calculating income for: 

• Housing Benefit
• Job Seekers Allowance
• Employment Support Allowance
• Income Support

kuratowski

I think a SIPP is disregarded as capital if you are of working age, but you would be better off asking on the Benefits board.

NedS

the_mixer said:

Can you start a SIPP while on ESA long term and would it go towards your £6 to £16k capital which affects benefits? For example, could you have £5000 in savings then another £5000 in a SIPP which wouldn't affect how much you get paid weekly?

Funds held in any UK registered pension scheme (including SIPPs) are disregarded in full for means tested benefits, so they do not count towards your capital limits. So yes, you could have £5000 in savings and an unlimited amount held in a SIPP and it would not affect your entitlement to means tested benefits such as your ESA.

sevenhills

NedS said:

Funds held in any UK registered pension scheme (including SIPPs) are disregarded in full for means tested benefits, so they do not count towards your capital limits. So yes, you could have £5000 in savings and an unlimited amount held in a SIPP and it would not affect your entitlement to means tested benefits such as your ESA.

The OP is not asking what gets disregarded, they are asking what can be paid into a SIPP whilst claiming ESA

kuratowski

No they were asking about the capital disregard.

the_mixer said:

would it go towards your £6 to £16k capital which affects benefits?

Forgot to say earlier, OP you need to be aware of the tax relief limits on payments into a SIPP.  With no earnings, the most you can pay into a SIPP is £2880 per year, which will have tax relief added on from HMRC.