What rights do I have to a lump sum?

In general, you will be able to take 25% of the value of your pension pot as a tax-free lump sum. However, there are special rules for salary-related and money purchase pension pots that are below a certain value.

If you are at least 55, you may be able to take a small pension as a cash lump sum. If you are in a defined benefit pension scheme and the value of all your pension benefits when added together does not exceed £30,000 in total, you may be able to take the whole of your pension as cash. This is known as a ‘trivial commutation lump sum’.

If you are in a defined contribution scheme you may be able to take the whole of your pension as a small pot if the value of your pension arrangement does not exceed £10,000 (with the option of taking up to three small pots of £10,000 or less). The Pensions Advisory Service looks at these choices in more detail.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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