Pension lump sum

Selwyn65

I had Septic arthritis 4 years ago and my mother in law lent me £40000 to get both my knees replaced. It clearly shows on our bank statements when we paid the cheque in that she wrote and when we paid the private hospital from our account.
I am on Universal credit since I had Sepsis as it caused heart problems also.
I turn 65 on June 13th and can if necessary access a pension lump sum to enable me to pay my mother in law back but I have been told that I will lose my Universal Credit if I use my pension to pay her.
I have also been told that if I just leave my pension as it is I will basically lose it also to Universal Credit. Any help would be appreciated as it seems I am between a rock and a hard place.

Keep_pedalling

Who has told you this? Paying off a loan is not deprivation of assets and should not affect your benefits, although pension income will.

NedS

For UC purposes, it is OK to use your pension lump sum to reduce debt, but you will need to be able to prove you have a debt with your mother. Do you have a written agreement that the £40,000 was a loan to be repaid, and not just your mother kindly paying for your operation? Bank statements alone do not prove you have a debt, they simply show the transfer of funds.

Secondly, as @Keep_pedalling says, any regular income received from starting your pension will reduce your UC amounts pound for pound.

Selwyn65

Loans are all documented, even my solicitor who represents me in a damages claim because of the Sepsis is aware that my mother in law lent me the money and didn't gift it

Selwyn65

I am due a damages payment from a certain Health Trust and was going to use it to pay off debts but a Financial advisor has said that setting up a trust fund ring fences my damages award. All the benefits I have received over the last five years will be repaid as part of my damages claim so in reality I won't have received a penny over the last few years