Current employees

Tax-free lump sum

Members may opt for a tax-free lump sum at retirement up to HMRC maximum limits, normally set at 25% of the value of retirement benefits using HMRC's guidelines.

Where members have Core Funds and Non-Core Funds, members are normally permitted to use their Non-Core Funds first to withdraw any tax-free lump sum.

If members don’t have sufficient Non-Core Funds to cover their selected lump sum, the balance will be withdrawn from Core Funds but this requires some of the Pension Underpin to be given up. Members will be informed of the amounts involved in their retirement illustration pack.

Lump sum in place of all benefits

If the value of Plan benefits is below £30,000, which includes the Pension Underpin, it may be possible to receive them as a one-off taxable lump sum, known as a Trivial Commutation Lump Sum (TCLS) if all terms set out by HMRC are met. Members will be notified if this option is available in their retirement illustration pack.

DC benefits can be paid as a one-off taxable lump sum, known as an Uncrystallised Funds Pension Lump Sum (UFPLS), but only if payment extinguishes all benefits under the Plan. There is no restriction on the amount of benefits that can be paid this way.