You may, if the Trustee agrees, choose to exchange up to 25% of the ‘value’ of your pension benefits for tax-free cash when you take your pension, providing you are over the minimum pension age of 55 or if you retire due to ill-health. This is often referred to as “commutation”.

If you have paid Additional Voluntary Contributions (AVCs), then you may also take up to 25% of the value of your accumulated AVC fund as a tax free cash sum, subject to the total cash sum from all sources not exceeding HM Revenue & Customs maximum tax free cash sum limits.

The terms for exchanging pension income for a cash lump sum may be reviewed and altered by the Trustee from time to time. Although, any cash sum taken will reduce your pension, it will not affect any spouse’s or dependant’s pension payable on your death.