Taking a private pension may affect your benefits as it\u2019s usually classed as unearned income. However, having a pension pot you aren\u2019t yet taking shouldn\u2019t affect your benefits if you\u2019re under State Pension age. If you\u2019re over State Pension age, then a private pension you\u2019re not using may affect your benefits.<\/p><\/div>\n <\/div>\n<\/li>
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\n \n Is it better to take a lump sum or a monthly pension?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
Whether it is better to take a lump sum or a monthly pension depends on your financial circumstances. If you\u2019re approaching retirement, then it\u2019s a good idea to get advice from an independent financial adviser. They\u2019ll be able to advise you on your options, the tax impact of those options and if they\u2019ll affect your benefits.<\/p><\/div>\n <\/div>\n<\/li>
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\n \n What is unearned income?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
Unearned income includes any income you don\u2019t get from a job. It includes things like pension income, interest income, dividends from shares, rental income and benefits income.<\/p><\/div>\n <\/div>\n<\/li>
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\n \n How does unearned income affect my universal credit?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
Most unearned income will mean that for every \u00a31 you get, your maximum universal credit payment could reduce by \u00a31.<\/p>
Some benefits won\u2019t affect your universal credit. These include the following:<\/p>
Child benefit<\/li> Child maintenance payments<\/li> Disability living allowance<\/li> Personal independence payment<\/li> Income from lodgers<\/li><\/ul><\/div>\n <\/div>\n<\/li> \n \n
\n \n Can my universal credit be stopped if I have a private pension?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
You will need to report a change in circumstances to the government if you start taking your private pension. That\u2019s because it will increase your income and possibly your savings balance.<\/p>
Your universal credit may be stopped if your income increases or your savings balance goes over \u00a316,000.<\/p><\/div>\n <\/div>\n<\/li>
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\n \n What amount of private pension can I have before it affects my universal credit?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
If you\u2019re employed or taking a pension, it will affect how much universal credit you get. For every \u00a31 you take as unearned income from a pension, your maximum payments could reduce by \u00a31.<\/p>
You can use a benefits calculator to check what benefits you\u2019re likely to get.<\/p><\/div>\n <\/div>\n<\/li>
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\n \n What income is disregarded for universal credit?<\/span>\n \n <\/use>\n <\/use>\n <\/svg>\n <\/button>\n <\/h4>\n <\/div>\n \n
Some types of income aren\u2019t counted when you\u2019re being assessed for universal credit. These include child benefit, child maintenance payments, disability living allowance, personal independence payment and income from lodgers.<\/p><\/div>\n <\/div>\n<\/li><\/ul>Pensions are long-term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply. Keep in mind that the tax treatment of your pension and investments will depend on your individual circumstances and may change in the future. Capital at risk.<\/div><\/article>
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