The amount of your pension savings that is taken into account when assessing your benefits depends on the type of pension you have. For defined contribution pensions, the amount in your pension pot is counted as savings. For defined benefit pensions, an estimated capital value is used, which is based on the amount of pension you are entitled to receive.
The threshold for savings varies depending on the benefit you are claiming. For example, for Universal Credit, the combined savings of you and your partner must not exceed £16,000. For Pension Credit, the upper capital limit is £10,000.
If your savings exceed the threshold, you may still be eligible for benefits, but the amount you receive may be reduced. For Universal Credit, the amount of your pension savings that exceeds £16,000 is treated as income and can affect the amount of your award. For Pension Credit, the amount of your pension savings that exceeds £10,000 reduces the amount of Pension Credit you receive pound-for-pound.
It's important to note that the rules around pension savings and benefits can be complex, so if you are not sure how your pension will affect your benefits, you should contact the DWP for advice.