You get £12 of lump sum for every £1 of pension you give up.
What is the maximum lump sum I can get?
There are limits set by HM Revenue & Customs; this is currently a lump sum of 25% of the total value of your pension benefits.
Your maximum lump sum will be shown on any quotes you receive when you start the process of claiming your pension.
Can I exchange all of my pension for a lump sum?
Not usually. In most circumstances you will get the option to take the maximum lump sum and an ongoing pension. You can choose an amount of lump sum from nil to the maximum.
However, there are some very limited circumstances where this can be done. Where the total value of all of your pension benefits is very low, it may be possible to exchange all of your pension for a lump sum. This is called ‘trivial commutation’.
HM Revenue & Customs sets the limits that apply. You can request information on trivial commutation to check if it is an option when you claim your pension. Taking this one-off payment means you will not get any further pension payments.
If you have been diagnosed with a limited life expectancy you may be able to exchange your pension for a one-off payment. There is more information on this in Section 05D – Ill-health retirement.
Exchanging pension for a lump sum and the Principal Civil Service Pension Scheme (PCSPS)
This section only applies to members who were in the PCSPS (classic, classic plus, premium, or nuvos) before 01 April 2015, and then moved from that scheme into alpha.
It does not cover every aspect of the scheme; full details are set out in the scheme rules, which are the legal basis of the scheme. You can find copies of the PCSPS scheme rules on the Civil Service Pensions website.
Nothing in this guide can override the scheme rules. Every effort has been made to make this guide as accurate as possible, but in the event of any difference, the rules will apply. This guide is based on the rules current at the time of publication and there is no guarantee that any part of the rules will not change in the future. You should be aware that tax rates and limits are subject to change.
If this section applies to you, please read it carefully to understand your lump sum options from both parts of your pension.
My PCSPS pension was classic / classic plus. Do I still get my automatic lump sum?
Yes. If your PCSPS pension included an automatic lump sum, usually of three times the classic part of your pension, this will be paid when you claim your pension.
If your pension was classic plus, the automatic lump sum will only be based on the service you built up while you were in classic (up to 30 September 2002).
My PCSPS pension was premium / nuvos. Do I get an automatic lump sum?
No. nuvos and premium pensions do not have an automatic lump sum.
Can I exchange some of my pension for an amount or additional amount of lump sum?
Yes. You may be able to exchange your pension for an amount or additional amount of lump sum up to the limits set by HM Revenue & Customs. You will get the details of the maximum you can exchange when you claim your pension. Your pension will be lower if you select this option.