Want to increase your lump sum?
Although there is no automatic lump sum for benefits accrued after 1 April 2008, you can give up part of your annual pension in exchange for a tax free lump sum (when your benefits come into payment). However, it is not possible to reduce your annual pension below your guaranteed minimum pension.
The lump sum modeller on the LGPS member website, allows you to work out how much pension you can convert to a lump sum at retirement.
You will receive £12 of lump sum for every £1 of annual pension you give up. You can take up to 25% of the capital value of your pension benefits as a lump sum, or if lower 25% of the lifetime allowance.
A members annual pension is: £3,000
If they decide to give up £500 pension for a cash lump sum
The reduced annual pension would be: £2,500
The tax free lump sum would be: £6,000 (£500 x 12)