Pension draw down

[Winniewoof]

I’m over 55 and can take a 25% lump sum out of my pension and put the rest in draw down. I’m currently working but receiving UC as I’m low wage. I know if I have more than than 6k it will affect my payment but if the rest is in draw down for a later date do UC take this into consideration and stop my benefit?

Why would you want to take 25% lump sum out straight away?

They will only take it into consideration once you actually draw it down (take it out).

That’s none of your business

Knowing might help suggest other ways to achieve your financial goals, plus it makes a difference if you draw it down and spend it or keep it in an account, or give it away.

My understanding is the drawdowns will be considered savings for UC purposes so your UC will be reduced, to zero if over £16k.

(Edited to correct typos)

Wow did you not read the question ? If you don’t know the answer then why comment?

I was going to share my knowledge with you. But, well, I can see is not welcomed.

How rude .

It is recommended you take an advice from an independent financial advisor but from what I read if you defer income for retirement it is not treated as actual income by UC because you are not receiving it.

Depends if this is a private pension or public sector. In the public sector whilst still working you would be deemed partially retired and would have access to lump sum plus retirement income and this would definitely affect UC as a current income stream.

Private sector is more generous in that you don’t need to partially retire to access lump sum so savings can increase losing you benefit but income is not affected as you can defer pension income.

don’t take my word for it though!

That’s a rude question.
You can take it tax free-many people do.

If you analyse data about investment and performance of pension funds over time, and tax implications of doing so, there's little advantage in taking it out of your DC pension. So no, this isn't rude question. In any case this forum is anonymous.

You can take the 25% tax free bit of a DC pension both upfront and over time - you don’t ‘lose’ the opportunity if you don’t take upfront like some DB pensions. So the question of why was very pertinent, not nosy or rude. For many people it won’t be the best way to maximise their income, irrespective of universal credit