From 6/4/2015 people age 55 have more fexibility about what to do with their pension pot- perhaps buy a pension, take out a lump sum or set up 'fexible drawdowns'. How will this effect benefits? The government has produced a general factsheet and DWP guidance. Also HB guidance.
If you are under State Pension Credit age then any income and capital you get from your pension would be taken into account for means tested benefits(also the contributory forms of JSA and ESA if it is pension income above either £50 or £85 per week). If you choose to leave it in the pot then it won't affect your benefits. Once a client reaches State Pension Credit age then if a client still chooses to leave the money in the pot then a notional income figure from a presumed pension will be taken into account for means tested benefits. The deprivation of capital rules could also apply, potentially, if the client gives away, spends or transfers the capital elsewhere.
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