Pensions - Articles - What impact pension freedom may have on benefit entitlement

 “The findings in the Citizens Advice report around pension freedoms raises an important issue around the impact taking cash from your pension could have on benefit entitlements. Savings an individual has in a pension policy are not taken into account when someone is assessed for entitlement to means tested benefits, but if money is taken out and saved elsewhere, this can affect entitlements. It’s important that this is made much clearer to those considering the pension freedoms.
 
 “The report also talks about individuals receiving unexpected tax bills, The rules here are clearer. If someone takes a lump sum from their pension, part can be tax free, but the balance is subject to income tax. A large lump sum could take someone into a higher tax band and immediately leading to a cut in the amount they actually receive. Taking income gradually can avoid this happening.”