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    • iwblue
    • By iwblue 10th Mar 18, 7:20 AM
    • 81Posts
    • 15Thanks
    Classic CSP
    • #1
    • 10th Mar 18, 7:20 AM
    Classic CSP 10th Mar 18 at 7:20 AM
    I'm looking at potentially leaving the Civil Service at age 55 and taking my Classic pension. I have read that the Widows Pension payments will be refunded to me when I take my pension as I never married. I think i also read something about if these payments are refunded they're taken into account when calculating the lump sum. However I can't find this information when I went looking for it recently. So am not sure if I dreamt it up.

    Does anyone know if this is the case? If it is, does this have any effect on the annual pension I would receive?

    Thanks in advance.
Page 1
    • GunJack
    • By GunJack 10th Mar 18, 9:54 AM
    • 10,021 Posts
    • 7,519 Thanks
    • #2
    • 10th Mar 18, 9:54 AM
    • #2
    • 10th Mar 18, 9:54 AM
    In theory, the refund should be paid with the lump sum, not as part of the lump sum..i.e. the LS is calculated based on your pension, and then the value of the refund is added for payment..just bear in mind there may be an element of tax taken off the refund as the contributions were made before tax.
    ......Gettin' There, Wherever There is......
    • hugheskevi
    • By hugheskevi 10th Mar 18, 12:18 PM
    • 1,962 Posts
    • 2,443 Thanks
    • #3
    • 10th Mar 18, 12:18 PM
    • #3
    • 10th Mar 18, 12:18 PM
    My understanding for classic benefits is that the maximum Pension Commencement Lump Sum allowed under HMRC rules (which applies to all Defined Benefit pensions) is somewhat higher than the automatic lump sum of 3x annual income which you receive from classic. Note, if you commence the pension early you may well not get exactly 3x annual income as lump sum due to the way the actuarial reduction is applied. The Widows Pension is separate to the automatic lump sum paid under classic rules, but is paid as part of the Pension Commencement Lump Sum permitted under HMRC rules, and so is not taxable. It does not affect either the annual pension or the automatic lump sum to which you are entitled under classic rules.

    Note that for the Widows Pensions refund to be part of the Pension Commencement Lump Sum it must be paid within a year of you taking your pension, and there have been cases on this board where due to various administrative reasons this has not happened.
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