Taxing a tax free lump sum from a private pension

Benefits, finances and funding
1

Hello everyone - I get carers allowance - I don’t work anymore apart from caring for my disabled husband. We need to move house, and to help fund this I am entitled to take 25% tax free lump sum from my private pension. I am 5 years belwo pension age. Will the DWP take my carers allowance off me if I take the money from my pension pot. It would be approx £19,000.
If anyone has experience of this please let me know cheers Jean

2

Hi Jean,
I suggest you contact the email helpline:

advice@carersuk.org

or the Citizen’s Advice Bureau for advice on this.

3

Have a look at the regulations. I think “income” is earned income from regular work, it a lump sum.

1 Like
4

Thanks for your reply/ Everything I’ve looked at suggests you can take a lump sum but I’ll have to get some advice before i do anything

5

Hi Melly - good suggestion, I’ve emailed the carers helpline - thanks

1 Like
6

Occupational pensions are ignored by Carers Allowance, whether it’s income or lump sum.

7

thanks for your reply Charles, is this something you have already done? Thanks Jean

8

That’s right. Your occupational pension is ignored in the same way as savings, where Carers Allowance is concerned.

9

Yes I took my lump sum out when I was 55 and it did not affect my Carers Allowance - I checked with my Financial Advisor and guy who did my Tax Return. That said, regulations are always changing so well worth getting professional advice.

10

Thanks so much for your reply – I will of course check but good to know it might be possible

1 Like
11

Hi. I took a small lump sum from one of my pension pots and still get Carer’s Allowance. Good luck.

1 Like