Frequently Asked Questions

In most cases you should complete one of the two forms provided to you;

  • If you want to take the lump sum you should complete a cash lump sum form or
  • If you want to keep your pension you should complete a pension continuation form.

You will need to complete the requested details on the form of your chosen option and if you are not currently in regular receipt of a pension you may be asked to provide a current bank account (in your name or as part of a joint account)  to pay the cash lump sum into. 

We may well have received your option form and it is with our claims processing team. If you have not had a response within 8 weeks please contact us.

As long as the option period has not ended, then yes. Please contact us and we will talk you through the process.

If the option period has ended we will be unable to change your option. If you are now interested in exchanging your pension for a cash lump sum, you will need to contact the pension administration team who will be able to provide you with more information. Please note that the cash lump sum is likely to be recalculated and may go up or down. 

If you take the lump sum and then change your mind, you can’t get your pension back.

There can be multiple payment dates for schemes we are working on. The information should be held in your letter.

Can you help me with Tax issues?

We are not authorised to provide any tax advice regarding your lump sum. Tax is based on each individual’s circumstances depending on your tax code, your annual income and other earnings factors; therefore we cannot accurately calculate tax.

How much tax I have to pay?

If you are already in receipt of your pension, the entire cash lump sum is taxable. For many people, the amount of tax deducted by the pension scheme will be the correct amount and there will be no more tax to pay.

If you are a deferred member, having not yet taken your pension, 25% of the cash lump sum available to you will be tax free. The remaining 75% of the lump sum will be taxed at the basic rate of 20%. However, depending on your current tax code, your annual income and other earnings factors, receiving the lump sum may push you into a higher tax bracket.

Can I split the payment or get it paid later?

For all members the payment must be made in full as a single payment and therefore cannot be split over more than one tax year or paid on an alternative date other than that quoted in the letter.

Additional tax help

For additional information on how much tax you may be paying, you may wish to contact Tax Help for Older People, a charity set up to provide tax advice for lower incomes. Their number is 01308 488 066.

I think I have paid too much tax?

If, after payment, you think you have paid too much tax you can ask HM Revenue & Customs for a tax refund now; you do not have to wait until the end of the tax year. You can call the HM Revenue & Customs Helpline on 0300 200 3300 and ask for a P53 Form. This is also available online. You will require your P45 to complete the P53, which the payroll department for the scheme should supply to you after payment of the cash lump sum has been made. This can take up to 4 weeks to receive.

Unfortunately, our calculations for your pension benefits have come to over £30,000 and the Trustees are therefore unable to offer you the cash lump sum.

As your pension benefits within the Scheme have been valued to between £10,000 and £30,000, we are required by government legislation to take into account all other benefits of which you are in receipt of, excluding state benefits or dependants pensions received on behalf of a deceased spouse. We issued an “Other Benefits” form to you to provide us with this information and on receiving this form back; we have used the information provided to calculate your eligibility. This involves reviewing any cash lump sums received and valuing any defined benefit pensions provided. To value your pensions, we must apply factors provided by the government to all annual pensions provided. We must then add together the values of these pensions, including the scheme pension (which we initially write to you about), and it is the combined total value which must come to under £30,000 in order for you to be eligible to take the cash lump sum. As you have been calculated as ineligible, the Trustees of the Scheme are unable by law to offer you this cash lump sum.

A frequently asked questions fact sheet will have been supplied with your correspondence answering all questions on Retained Benefits. If you have not received one or, if you have read it and still have further queries, please do not hesitate to contact us.