Private pension affect on benefits - I drew tax free lump sum years ago - is it classed as "cash at hand" now?

yes that's what I think too. I've been given a number to call for the Age Uk pensions advice team who might be able to confirm it, but if anyone else comes on and wants to have a look its Age UK pensions Factsheet no. 91.

Still can't be sure of course, hence I'll make that call.

I’m no expert, but I think they mean your entitlement to benefits is reduced or removed until you reach the point where your remaining savings are below the benefits threshold, which may take several years.

That's my understanding too Casdon thank you, so I'm not going mad. I found this on Age UK's fact sheet:

"If your pension pot remains untouched and you are below State Pension age, its value is ignored as a capital asset. However, if you take a lump sum from your pension pot, as partial drawdown or the whole amount, it is treated as capital in the means-test. This may mean your entitlement is reduced or removed."

I think my only query is do they mean forever or just in that year?

My understanding is that once you have a lump sum paid into your account from a pension fund, it is no longer classed as a pension, it is your money to spend or save as you want. So yes, I think you would be expected to use it to pay your living expenses until it reduces to the permitted savings level for benefits to be paid.