Over 55s warned of 3 ‘hidden risks’ of tapping into pension to help with cost of living

If a person leaves a balance in their bank or savings account, they could see a deduction in the benefits they receive.

In some more extreme cases, they could find themselves barred from receiving the benefit altogether. 

For example, Universal Credit takes account of savings above £6,000, applying a cut off at £16,000 – meaning anyone who has above this level is disqualified. 

As the same may apply to support such as council tax reduction, it is vital to think carefully about pension access and whether it is the best decision in the long run. 

Sir Steve Webb, partner at LCP, said: “It is entirely understandable that people under severe financial pressure may consider tapping into their pension savings to help pay the bills.