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LGPS help please
Silverweed
Posts: 32 Forumite
Good morning, am new to the forum and know little about pensions - hoping for some help if poss regarding LGPS please.
My partner is planning to take his deferred benefits as having just reached 60 he meets the rule of 85 and the majority of his years in the scheme fall under this.
The paperwork only seems to give the option to swap some pension for lump sum and no option to swap some lump sum for an increased pension - can you definitely not do the latter please?
Paperwork says lump sum is 'usually' tax free. Confused by this - in what circumstances would it not be tax free under LGPS? Our understanding is you have to at least take the standard lump sum when claiming the pension - not looking to take more than this.
There is a clause in the paperwork about not reinvesting any tax free lump sum from the pension fund into another pension. My partner has a sipp already set up elsewhere and has been paying in £2880 a year whilst retired. This is funded from existing savings. Can this arrangement be continued after claiming the LGPS benefits? Just concerned this could not be construed in any way as recycling.
Just for info - partner has not claimed any lump sum or pension from anywhere else.
Thanks in advance for any help.
My partner is planning to take his deferred benefits as having just reached 60 he meets the rule of 85 and the majority of his years in the scheme fall under this.
The paperwork only seems to give the option to swap some pension for lump sum and no option to swap some lump sum for an increased pension - can you definitely not do the latter please?
Paperwork says lump sum is 'usually' tax free. Confused by this - in what circumstances would it not be tax free under LGPS? Our understanding is you have to at least take the standard lump sum when claiming the pension - not looking to take more than this.
There is a clause in the paperwork about not reinvesting any tax free lump sum from the pension fund into another pension. My partner has a sipp already set up elsewhere and has been paying in £2880 a year whilst retired. This is funded from existing savings. Can this arrangement be continued after claiming the LGPS benefits? Just concerned this could not be construed in any way as recycling.
Just for info - partner has not claimed any lump sum or pension from anywhere else.
Thanks in advance for any help.
1
Comments
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No, in his case he can't give up any of his automatic lump sum for more pension (inverse commutation) because the LGPS phased that out many moons ago.
The automatic lump sum - plus any extra 'bought' by commutation up to the HMRC limit - is currently tax free. I suspect that your LGPS has just slipped the 'usually' into their letter to cover themselves IF things change in the future.2 -
No problem with the £2880 ongoing pension contributions either.2
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Thank you very much for your helpful replies Silvertabby & AlanP_2.2
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