Lump Sum Pension Pay OUt

MarlynMiles

I am in the process of applying for my Legal & General pension to be paid on my chosen retirement date of 19/06/2018. The "trivial computation lump sum" is £11487.35. I am advised by L&G that the "small pension pot" maximum is £10,000. My "total funds value" (of previous pensions cashed in) is greater than £30,000. I am led by L&G to believe that, consequent to one or both of the aforementioned financial stipulations, I am unable to receive a lump sum and must settle for a "guaranteed minimum pension" of £285.80 per year which (again advised by L&G) equates to a full pay out of £5716.00. If so, what happens to the balance of £5771.35 (£11487.35-£5716.00)? Thank you.

dunstonh

The "trivial computation lump sum" is £11487.35.

Triviality doesnt exist on money purchase schemes any more. No reason for it to given UFPLS replaced it.

I am advised by L&G that the "small pension pot" maximum is £10,000.

That is correct.

I am led by L&G to believe that, consequent to one or both of the aforementioned financial stipulations, I am unable to receive a lump sum and must settle for a "guaranteed minimum pension" of £285.80 per year which (again advised by L&G) equates to a full pay out of £5716.00. If so, what happens to the balance of £5771.35 (£11487.35-£5716.00)?

L&G are only telling you what the plan itself has available. This does not mean they are the only options available. I'm surprised they havent offered UFPLS. However, you may not have asked the question about UFPLS and they are not allowed to offer advice or opinion. They have to respond factually to questions you ask only.

If UFPLS is not available, then transfer the pension to one that is.

xylophone

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Quick_SPOT012_V1.7.pdf

Can you transfer the pension to a SIPP, take the PCLS and then draw down the balance as best suits your tax position?

http://www.hl.co.uk/pensions/sipp

Dox

dunstonh wrote: »

Triviality doesnt exist on money purchase schemes any more. No reason for it to given UFPLS replaced it.

If a GMP is being offered, and trivial commutation is being touted around, it sounds as if this is a defined benefit arrangement (possibly an insured one) rather than money purchase??

dunstonh

Dox wrote: »

If a GMP is being offered, and trivial commutation is being touted around, it sounds as if this is a defined benefit arrangement (possibly an insured one) rather than money purchase??

Good point. I was reading that as annuity to be honest but yours makes more sense.