Pension savings and Universal Credit

mrsteve47

Hello all,

I'm looking for an answer as to what is regarded as savings when claiming Universal Credit. I'm not claiming at present, but may need to in the future.

I've taken my tax-free cash from a personal pension. This is going to be used for a house purchase so will bespent in the next few months.

I'm trying to find out if any more money taken from my pension wil count as savings. I'm getting conflicting answers from different sources.

Citizens advice website states that if you're under State Pension age: "Only the money you actually take out of your pension is counted as income or capital, not the full amount that you're entitled to take."

moneyhelper.org says savings include: "Your pension pot if you’re currently taking your pension."

So one source says your pension pot in not counted as savings, another source says it is.

This is all hypothetical at the moment, but I'd like to know what the rules are in case I need to claim UC in the future.

Many thanks,

Steve

Spoonie_Turtle

CAB is correct.  The value held in official pension schemes is disregarded.  Money received from them - i.e. no longer in the pension 'pot' and now in your possession - is taken into account.

A one-off lump sum is capital.

If you're receiving regular payments from a pension scheme then those are income and deducted in full from your UC payment - you don't specifically mention this in your post but just so you're aware in case you do have to claim UC in the future.

Northern_Wanderer

Any monies you withdraw from your pension as a lump sum will be regarded as capital for UC purposes. You are allowed to pay off debts, a mortgage and make "reasonable" purchases" for your circumstances. All capital over 6k is taken into account while you have it and maybe afterwards. Should maybe familiarise yourself with "Deprivation of Capital" rules before withdrawing/ spending if you intend to claim UC.

mrsteve47

Spoonie_Turtle said:

CAB is correct.  The value held in official pension schemes is disregarded.  Money received from them - i.e. no longer in the pension 'pot' and now in your possession - is taken into account.

A one-off lump sum is capital.

If you're receiving regular payments from a pension scheme then those are income and deducted in full from your UC payment - you don't specifically mention this in your post but just so you're aware in case you do have to claim UC in the future.

Thanks for the reply. I don't receive a regular income from the pension. So far I've taken just the tax-free cash, but may take another small lump sum if needed for a property purchase.

If I do have to claim UC, I'm hoping this is a year or two down the road and the capital will have long been spent.

Thanks again.

mrsteve47

Northern_Wanderer said:

Any monies you withdraw from your pension as a lump sum will be regarded as capital for UC purposes. You are allowed to pay off debts, a mortgage and make "reasonable" purchases" for your circumstances. All capital over 6k is taken into account while you have it and maybe afterwards. Should maybe familiarise yourself with "Deprivation of Capital" rules before withdrawing/ spending if you intend to claim UC.

Thanks for the reply. I've taken a look at the Deprivation rules, and it seems they shouldn't apply. I don't have any plans to claim UC at the moment, and will only do so if absolutely needed. The capital will have been spent on a house purchase, so not spent purposely to get rid of savings.