Option to access pension fund early

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    hi. I have a 55 year old client who has been unable to work through ill health for some time. He has recently discovered that there is a clause attached to his personal pension fund that means if he can demonstrate he will be unable to work until his pensionable age, he can access the fund early. There is no annuity product attached to this pot at the moment and he could also access up to 25% as a lump sum. The total fund is only worth about £20k so if he does access this 25% (in the absence of other savings) will not effect entitlement and obv any payments he received once he had arranged an annuity would be dealt with as a weekly or monthly income.  

    The problem we are having is that he would like clarification of the way this would be treated for benefits purposes if he does and if he doesn't take up this option-ie if it would be treated as notional capital/income now that we are aware he could access the fund even if he opts not to.

    Any thoughts would be much appreciated…



    The crux of the matter seems to be that the claimant needs to apply to have his pension released early on the grounds of ill-health. His application may be refused. If it was agreed that he did meet the criteria to have his pension and the lump-sum early but declined to take them up on the offer then this is a different matter.


    I didn’t think the notional income regs in relation to private pensions existed for WA claimants, only in the Pensioner regs so it only matters if he takes the pension. Otherwise it’s not a consideration until they’re old enough to fall under the Pensioner regs when the notional private pension income can then come into play.

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