If you don’t take an income, they’ll check how much you’d get if you bought a guaranteed income for life (an annuity). They would then use this amount when they work out your income.
Getting a flexible retirement income
Are you using your pension flexibly by keeping it invested and taking an income from it? Then your local council would look at how much you’d get if you bought a guaranteed income for life (an annuity).
Depending on how much you withdraw from your pot, they might class it as capital or income in the assessment of how much you need to pay towards care costs.
Taking your pension as a number of lump sums
If you take lump sums or your whole pot in one go and put it into savings or invest it, your local council will treat it as an asset and include it when they work out what you can afford to pay.
If you deliberately spend or give away money (including tax-free cash) from your pension pot to get or increase help with care costs, your local council might assess your finances again. They might treat you as still having that money.
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This article is provided by the MoneyHelper.