Additional Payment Due Because of the 2020 "Lloyds Judgement"

David_Watts2

Hi, would appreciate some input on this one. I transferred out of a DB scheme in 2019 and have just had a letter telling me I'm due an initial payment as a result of the "Lloyds Judgement". The payments is offered "as a one-off small lump sum" with 25% tax free and the rest taxed at 20%. I'm being given 2 months to accept the payment, after which time "the options available to you and the process of obtaining payment may change". There's a recommendation that I take advice before requesting the payment. My current ponderings are:

1. Is the letter genuine - I'm fairly confident that it is, although out of the blue and from a company that I wasn't aware were being used by the previous scheme (Aptia). It's been received by others as well but I'll check directly with the trustees to eliminate any residual doubts.
2. Should I take advice before accepting the offer? Any opinions welcome here. The amount in question is £5.5k gross so it's not huge. It feels like a gamble as to whether any paid for advice would be likely to offer value, but I guess if there's a chance the amount being offered is significantly less than fair there's a case for having it independently checked. That said, it has supposedly been calculated "in line with the methodology specified by the court"!
3. What happens if I don't accept the offer, i.e. what's the process in that case? Is there an option whereby I can avoid the tax hit on 75% of the amount? (I'm thinking 25% tax free "cash" and the rest going into my pension would be a preferable option if that's viable.) Had I been paid the correct amount in the first place I'd have had a slightly bigger lump sum (I took the full 25%) and a bit more in the pot for draw down. (I've been taking a small taxable amount each year to use any remaining allowance so have not paid any tax on the pension thus far.)

I'd appreciate any guidance from anyone who is familiar with the process, whether on the above points or anything else I should be considering. 

molerat

Another thread ongoing here https://forums.moneysavingexpert.com/discussion/6613789/gmp-equalisation

The only way to avoid a tax hit would be if they could transfer it directly into another pension.

David_Watts2

Thanks @molerat I did search but using "Lloyds judgement" so didn't find that thread. I'll ask in there if any of my questions remain unanswered.