Lump Sum Conversion rates

Miiade · 7 September 2018 at 5:24PM

Is the lump sum commutation rate for converting pension to lump sum affected by a persons age?

I have seen a conversion rate of 23 to 1 in my deferred pension scheme for a person taking their pension early at 55 and was wondering whether the rate would change if they took their pension at their normal retirement age of 60. (up/down/stay the same)

I realise that pension schemes may change their rates over time, but am curious if a persons age affects the rate and if so in what way.

Many thanks.

Brynsam · 7 September 2018 at 5:41PM

Varies from scheme to scheme. Some change the factors according to age, others don't. You would need to check with your own scheme to be sure.

drumtochty · 7 September 2018 at 5:45PM

Pension schemes can offer what they want, when they want and to who they want re lump sum factors, there is no rules at all and it is for the person being offered the deal to accpet or not accept what you have been offered.

There are people on this forum that think they would be due a certain factor because other peole they know from different employers have got a specific dactor. Not so, it can change from day to day and employer and in certain cases between people employed by the same employer.

Miiade · 7 September 2018 at 5:55PM

Brynsam wrote: »

Varies from scheme to scheme. Some change the factors according to age, others don't. You would need to check with your own scheme to be sure.

Thanks. My deferred pension is with royal mail section c and I understand I can give up 25% of my yearly pension for a tax free lump sum, just looking at options.