× Members

Private Pension and ESA, but with a difference!

More
5 years 10 months ago #212480 by Jetjockey145
Hello! :)
Please excuse me if this question has been answered before, but I cannot find the answer on-line. Its a question re private pension income and ESA, but with a twist!

Basically, some years ago, I suffered a serious accident which ended my career. I have been in receipt of CB ESA ever since and am in the support group.
During my working life I paid into several private pension schemes which I consolidated last year by moving them all to one investment company ready for official state retirement age.

However, I am now in need of funds to help my daughter with significant expenses with my grandchildren. So....... I am able to withdraw 25% of the entire pension investment fund tax free, and the rest I believe goes into a draw down fund ( a subtle but important change).
If I elect not to draw any monies from the draw down fund and only take the cash lump sum, would I fall foul of the DWP deprivation of capital rules? I'm assuming the grounds would be that I am choosing not to take advantage of funds available to me, which then results in the DWP having to continue paying me ESA benefit?

Its a bit of a puzzler, as on CB ESA I don't think it matters how much you have in the bank or what other non employment income you have, perhaps with the exception of pension income over £85?
At the moment the pension funds are locked away in a bona fide retirement investment, and i dont think that I can be forced to "cash them in" so to speak. The minute I draw the 25% tax free lump sum I suspect this will trigger a different set of legal / entitlement rules and it could cause all sorts of hassell?

Could anybody offer any advice please. Many thanks. :blush:

Please Log in or Create an account to join the conversation.

More
5 years 10 months ago #212493 by Gordon
Gerald

If you are only receiving ESA(CB) then any lump sum that you take should be disregarded and treated as capital which will not effect your ESA. If you take a regular payment then then there is an £85/week disregard followed by a £1 deduction for every £2 of pension in excess of the £85.

Gordon

Nothing on this board constitutes legal advice - always consult a professional about specific problems

Please Log in or Create an account to join the conversation.

More
5 years 10 months ago #212500 by Jetjockey145
Replied by Jetjockey145 on topic Private Pension and ESA, but with a difference!
Hello Gordon, and many thanks for the reply.

In reality its not the lump sum I'm worried about, as I intend handing that to my daughter, its the prospective pension income I'm worried / puzzled about. The remainder of my pension pot will be transferred into a draw down investment account, and then becomes accessible by me, but how much do I draw??
What I mean is this.... The 75% remainder of my pension pot will not be used to buy an annuity, as this is far too restrictive under the new pension laws. The remainder would be placed into a draw down fund which then offers total flexibility. In a nutshell I could choose to draw anything from £1 a week to £1000 a week (fat chance) but in reality might choose £84.99 per week. You can see my predicament? What would be the DWP's take on this? Unlike an annuity which pays you a pre set amount each week, I could choose to take nothing each week, or a larger amount of say £285 per week which would reduce my ESA entitlement to zero!! Suffice to say my pension pot would be exhausted in no time if I chose to draw a large weekly amount, so is it legally allowed to draw up to the £85 per week limit and still claim full ESA entitlement?

Many thanks. :unsure:

Please Log in or Create an account to join the conversation.

More
5 years 10 months ago #212502 by Jetjockey145
Replied by Jetjockey145 on topic Private Pension and ESA, but with a difference!
Bump?

Please Log in or Create an account to join the conversation.

More
5 years 10 months ago #212506 by Jetjockey145
Replied by Jetjockey145 on topic Private Pension and ESA, but with a difference!
Does anybody have any idea how much one can draw weekly from the resultant draw down pot without being accused of deprivation of capital? Its not an annuity so there is no fixed weekly amount?

Thanks?

Please Log in or Create an account to join the conversation.

More
5 years 10 months ago #212533 by Gordon
Gerald

You do not need to bump your posts they will get answered as soon as we are able, Moderators are not usually online over the weekend!

It would not be Deprivation of Capital as you are talking about income, there is something called Notional Income but this only applies to Income Related benefits.

So whilst there can be deductions from your ESA(CB) due to the regular payment of your pension they cannot set the amount of pension income you should take.

Gordon

Nothing on this board constitutes legal advice - always consult a professional about specific problems
The following user(s) said Thank You: Incognito, portland, Jetjockey145

Please Log in or Create an account to join the conversation.

Moderators: GordonGaryBISCatherineWendyKellygreekqueenpeterKatherineSuper UserjimmckChris
We use cookies

We use cookies on our website. Some of them are essential for the operation of the site, while others help us to improve this site and the user experience (tracking cookies). You can decide for yourself whether you want to allow cookies or not. Please note that if you reject them, you may not be able to use all the functionalities of the site.