Pension and ESA

mazworld15

Hi all, my sister gets ESA and the savings limit is 6k allowed. She has a pension she can take of 14k, one of the options is a cash lump sum and the rest transferred to "Lifesight Spending (drawdown)" Am i right in thinking if she only takes 6k in cash the bit that goes to Lifesight Spending wont count s savings until she draws it from there? Hope that makes sense, thanks for any replies

xylophone

https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits


https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs91-pension-freedom-and-benefits.pdf

MallyGirl

I have been looking in to this for a relative. They were concerned that reaching 55 meant they had to take the pension but doing so would affect ESA. If they are under state pension age then anything that lives in the pension wrapper is ignored. If she takes a tax free lump sum it will count as savings unless she spends it on something. There maybe deprivation of capital issues if she takes more than the £6k out and fritters it away to not exceed the limit.

mazworld15

Thank you both, very helpful