25% Tax Free Pension Lump Sum and Universal Credit (LCWRA)

Spoonie_Turtle

PersianF said:

Hi, I have a small pension from a job I worked at for 5 months.  The pension pot for this job is £2900.  I want to withdraw the whole sum to help me with business startup costs.  I started claiming UC just under 2 months ago  Can anyone advise how dating the whole sum could or will affect my UC payment?  Thanks

I think it will be counted as capital (savings) - but I'm not 100% certain how they would treat it if you invest it in your business.  Business accounts can be disregarded; you'll need more knowledgeable members to advise with this specific situation.

Ordinarily, what effect it would have, if any, depends on your level of savings already:

If your total savings are under £6,000 even after receiving it, then it won't affect your UC at all.  - if this is the case for you then there's no question, it just won't affect your UC anyway and it's all simple.

If you have other savings and it brings the total up to over £6,000 you'll have to let UC know and there'll be a small deduction (£4.35 for every £250 or part thereof over 6k). 

If you already have savings over £6,000, you'll have to let them know as well so they can recalculate the savings deduction. 

If it brings your savings total up to over £16,000 your UC will end.