Pensions: Lump Sum Payments
The question
To ask the Chancellor of the Exchequer, if she will bring forward legislative proposals to extend eligibility for trivial commutation.
Answered by Tulip Siddiq
My response to Parliamentary Question 11127 provides more details on the rules around trivial commutation.
The purpose of these rules is to provide individuals with flexibility, while also helping to reduce the administrative burden on pension schemes of paying small pensions. In the case of trivial commutation, the £30,000 limit applies to the aggregate value of an individual’s pensions, rather than to each pension pot. This is to prevent the commutation of much larger – non-trivial - pensions by splitting them into multiple smaller pots just before retirement.
The Government has no current plans to extend this limit.
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