ESA and my small pension pot

[clouty]

Hi all, this is my first post here... This question is for a friend of mine, who is on Income Related ESA and has a small occupational pension fund - about £30K - which she thought was locked up until she was 60. Well, it turns out this is not the case, because of ill health she could draw on it, the princely sum of £10 a week.

 

DWP are asking for a pension statement. Does this mean she has to draw her pension early? We know that any such payments will be deducted from her ESA. Or, can she wait till she reaches normal retirement age, because who knows, she might get well again which would be lovely.

 

Thanks for reading.

 

x clouty x

[honeybee13]

Hello and welcome to CAG.

 

I expect someone who knows the answer will be along later. Please bear with us.

 

My best, HB

[debt4get]

i dont know how the dwp can 'force' her into taking her pension early...and cannot understand why they should be asking for a pension statement if she is not already drawing on it...it would be worth ringing and asking them. if she is not drawing then they can hardly remove it from her entitlement...you could point out that the govt have now raised the pension age

[honeybee13]

i dont know how the dwp can 'force' her into taking her pension early...and cannot understand why they should be asking for a pension statement if she is not already drawing on it...it would be worth ringing and asking them. if she is not drawing then they can hardly remove it from her entitlement...you could point out that the govt have now raised the pension age

 

Hi guys.

 

debt4get, I think technically the DWP could be right about an ill health pension being available - if the scheme Trustees authorise it, much earlier than retirement age. I think this might be what the OP means about the pension.

 

But I don't know if the DWP can force someone to apply for the pension.

 

My best, HB

[debt4get]

no i agree, but they are asking for a pension statement, that would be one that showed the weekly income that is coming from the 'pot' assuming that the person has been judged ill enough to warrant early release of the pension...the op has said that she has not taken anything from the pension yet, and it would seem that dwp are looking to take this money into account against the IESA, the question remains that can they tell someone that they must apply for the pension regardless?

[Soyamocha]

I think that you can take 25% of your pot tax free and then use the remaining 75% to buy a pension. If this is the case, your friend could take £7500 tax free which no doubt the DWP will be keen to hear about.