Low Value Pension Plans


You may be eligible to take all of your pension funds(s) within a 12 month period as a lump sum, subject to a tax deduction, as long as you are over the age of 60 and the total value of all your pension arrangements (excluding your state pension) is valued up to £30,000.  This is sometimes called Trivial Commutation.

If you have any individual pension pots that are valued up to £10,000, and if you are over the age of 60, you could take the funds as a lump sum regardless of any other pension funds you may have. This is referred to as Small Pension Pots.  This can be done for up to three personal pension plans that are valued up to £10,000 each.  The three pot limit does not apply to occupational pension schemes.

For any payment made as a lump sum under trivial commutation/small pension pots there is a tax deduction.  The first 25% is tax free.  The remaining 75% is liable to PAYE tax.