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Thread: Personal Pension and ESA

  1. #1
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    Personal Pension and ESA

    Does paying into a personal pension affect ESA?

    I am CB ESA with some IR ESA.

    Regards

  2. #2
    Senior Member nukecad's Avatar
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    Paying in no. (Unless you are buying a 'paid up' policy using a lump sum in order to reduce your savings to claim or increase IR benefits).

    Are you already paying into one or intending to start a new one?

    Drawing out of a pension as a lump sum or a regular amount may do.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

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  3. #3
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    Quote Originally Posted by nukecad View Post
    Paying in no. (Unless you are buying a 'paid up' policy using a lump sum in order to reduce your savings to claim or increase IR benefits).

    Are you already paying into one or intending to start a new one?

    Drawing out of a pension as a lump sum or a regular amount may do.
    I have an existing one that has not had anything paid into for many a year.

    I am looking to start paying back into it.

  4. #4
    Senior Member nukecad's Avatar
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    As long as you don't pay a lump sum in order to get any savings above £6k down so that you then get more IR benefits then it's not a problem how you spend your money; as long as it's what someone would 'reasonably' spend.

    It's deliberately spending money that you don't reasonably need to spend now, in order to reduce savings and increase your IR benefits that it becomes a problem.

    As an example:
    We had a post the other week from another member, Caley, getting an inheritance who was proposing to use a lump of it to buy 'paid-up' pensions for the two of them, amongst other things like a new car each etc., so that their IR benefits would not be affected too much by the inheritance.
    Whilst the other things looked reasonable in their circumstances, using a lump sum to buy the pensions would not be 'reasonable' because it's not needed now, so they would be treated as if they still had that money they used to buy the pensions.

    Paying a 'normal' amount into a private pension weekly/monthly would be reasonable in those, or in any, circumstances.

    But if you were regularly paying say double or triple what a person would 'normally' pay into the pension pot then the DWP may see that as unreasonable and want to take a closer look at your motives for paying above what is normal.
    It's the intent to unreasonably reduce savings in order to increase, or not reduce, IR benefits that counts.
    Last edited by nukecad; 14-05-21 at 09:20.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

    Migration from ESA to Universal Credit- Click here for information.

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