Mums been offered a one of settlement instead of monthly pension.

xylophone

 I believe it’ll be first  25% Tax free and then normal tax against the rest. 

No - see 

https://www.pensionsadvisoryservice.org.uk/content/spotlights-files/uploads/Death_benefits_commutation_SPOT014_V1.3.pdf

How is a trivial commutation lump sum death benefit taxed?

The whole lump sum is taxable as if it was part of your income. The pension scheme administrator should deduct the tax from the lump sum payment before it is paid to you.

Let's say that your mother's current non savings income is £12,500 a year.

The £18000 is treated as income in the tax year of receipt.

Thus her income for the year would be £30,500.

The tax due would then be £3500.

Does your mother currently receive interest of more than £1000 a year on her savings?

If so, consider the effect that taking the commutation would have on her savings income.

https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me

garmeg

xylophone said:

 I believe it’ll be first  25% Tax free and then normal tax against the rest. 

No - see 

https://www.pensionsadvisoryservice.org.uk/content/spotlights-files/uploads/Death_benefits_commutation_SPOT014_V1.3.pdf

How is a trivial commutation lump sum death benefit taxed?

The whole lump sum is taxable as if it was part of your income. The pension scheme administrator should deduct the tax from the lump sum payment before it is paid to you.

Let's say that your mother's current non savings income is £12,500 a year.

The £18000 is treated as income in the tax year of receipt.

Thus her income for the year would be £30,500.

The tax due would then be £3500.

Does your mother currently receive interest of more than £1000 a year on her savings?

If so, consider the effect that taking the commutation would have on her savings income.

https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me

Depending on the tax code used, she may pay 20%, 40% even 45% (*) on some of this money temporarily as it may assume she gets £18,000 a month. The overpaid tax can of course be reclaimed at a later date, possibly straight away?

(*) other rates apply in Scotland

xylophone

as it may assume she gets £18,000 a month.

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

See section 7 - it looks as if a straight 20% would be deducted rather than the situation as outlined here.
 https://adviser.royallondon.com/technical-central/pensions/benefit-options/emergency-tax-and-lump-sum-withdrawals/
Easy enough to check once the payment was received.

garmeg

xylophone said:

as it may assume she gets £18,000 a month.

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

See section 7 - it looks as if a straight 20% would be deducted rather than the situation as outlined here.
 https://adviser.royallondon.com/technical-central/pensions/benefit-options/emergency-tax-and-lump-sum-withdrawals/
Easy enough to check once the payment was received.

That covers small pots (£10,000 and under) which do get taxed at basic rate post PCLS. This isn't a small pot so may not be treated as such. It is possible that it could be.

xylophone

This isn't a small pot so may not be treated as such. It is possible that it could be.

Indeed - easy enough to check once the payment is received.