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    • Hydrobam
    • By Hydrobam 1st Dec 17, 5:53 PM
    • 1Posts
    • 0Thanks
    Inverse commutation
    • #1
    • 1st Dec 17, 5:53 PM
    Inverse commutation 1st Dec 17 at 5:53 PM
    I am considering retiring in the next year and would receive a pension and a lump sum. One option available is to buy additional pension with some or all of the lump sum, which is called inverse commutation. Does anyone know if inverse commutation is restricted to the £40,000 annual maximum set by the government for paying into a pension or can you pay more without a penalty? If there is that restriction, will the £40,000 need to include the money paid in by my employer that year?
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    • Economic
    • By Economic 1st Dec 17, 6:17 PM
    • 187 Posts
    • 158 Thanks
    • #2
    • 1st Dec 17, 6:17 PM
    • #2
    • 1st Dec 17, 6:17 PM
    Irrelevant! You are not paying into the pension, you are choosing how to take the money out of the pension.
    • dunroving
    • By dunroving 1st Dec 17, 6:30 PM
    • 673 Posts
    • 365 Thanks
    • #3
    • 1st Dec 17, 6:30 PM
    • #3
    • 1st Dec 17, 6:30 PM
    Check your scheme rules, but you should be able to reverse-commute as much as you want. I reverse-commuted all the TFLS for my defined-benefits pension.
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