CB ESA and private pension

Hi everyone, hoping someone can help, just to bounce ideas:

I have a client who is looking to cash in his private pension pot.  He is on CB ESA
he asks: If he were to cash a pension pot where 25% is tax free but the remainder would be a taxable lump, how would this affect his ESA.

It is my belief that CB ESA is not affected by a pension if amounts are less than £85 per week.  If they are over £85 then CB ESA is reduced by half the pension payments above £85.

However – capital amounts, which is what a lump sum from anywhere would be classed as, are not taken into consideration for Contribution based ESA as income/capital is not assessed

Am I right?!

Thank you for any help/advice in advance

Hi Rachel,

In my opinion you are right and I don’t think there is anything in this ADM to contradict you.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/890802/admv1.pdf

UB40 - 07 December 2022 04:38 PM

Hi Rachel,

In my opinion you are right and I don’t think there is anything in this ADM to contradict you.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/890802/admv1.pdf

Thanks!