Lump sum option
You can choose to take up to 25% of your benefits as a tax-free lump sum – subject to a maximum of 25% of the Lifetime Allowance.
The lump sum you receive depends on your age at retirement as the amount converted is multiplied by a factor that varies according to age.
If you choose to surrender part of your pension for a lump sum, the pension payable to your dependant/spouse is not affected.
If you have been contributing to a Money Purchase Additional Voluntary Contribution (MPAVC), your MPAVC fund will first be used to provide all or part of your tax-free lump sum before giving up any pension.
If your lump sum is more than 25% of the Lifetime Allowance set annually by HMRC, it will be necessary to cut back the amount you convert to less than 25% of the capital value of your pension.