Lump sum calculation

[Rapido123]

Hi, I was wondering if somebody could help me calculate my lump sum from the figures below. I am section C and the figures are based on retiring at age 60. I have already done the reduction for taking my 65 benefits early and will be using all of my Avcs and cash balance to provide my lump sum. I understand that some of this may be leftover and be taxable. Any help would be appreciated, thank you. (I have not included the collective scheme in this calculation)

Annual pension £13,000

Cash balance £36,000

Bonus plan £11,000

Flexiplan £45,000

The annual pension amount also includes the pension supplement as I have based it on leaving the company, I think that’s everything, thank you

[RobertT]

It's important to realise the Cash Balance(DBCBS) can only be used to fund the tax free lump sum associated with RMPP benefits, so that will be RMPP Age65(2012-2018) plus any RMPP Age60 that you may have(most people will probably only have a small amount or possibly none at all).

The DBCBS can't be used to fund the tax free cash with any RMSPS benefits, but AVC's can be used for both RMPP and RMSPS lump sums.

Therefore you need to work things out separately for each element of your benefits and then add them up to get total pension and lump sum amounts.

You will potentially have 4 elements to consider:
RMSPS Age60, RMPP Age60(if applicable), RMSPS Age65 and RMPP Age65.

The usual method is to multiply the pension by 20 and then divide by 3 to get how much tax free cash can be taken from your AVC's/DBCBS.

Example 1: RMSPS Age60 = £9,000 per year - you can take £60,000 in tax free cash from AVC's, with any remainder being used for RMSPS Age65:

9,000 x 20 = 180,000 / 3 = 60,000
Based on your figures, you could take all AVC's tax free.

Example 2: RMPP Age65 = £2,400 per year - £16,000 of the DBCBS can be taken tax free with those benefits, with the remainder being paid out as a UFPLS, which means 25% of that will also be tax free:

2,400 x 20 = 48,000 / 3 = 16,000
Based on your figures, £5,000 of your remaining £20,000 would also be tax free and the other £15,000 being classed as income and taxed accordingly.

*Any excess AVC's can also be paid out as a UFPLS or transferred out to a personal pension. Excess DBCBS can only be paid as a UFPLS.

[Rapido123]

Thank you RobertT, that is very helpful. I will work out the calculations. Thanks a lot for your help.

[roadrunner bill]

I've just took my 65 nra.. and got lump sum of 8k.. selecting option 2.

And I believe I'll get all my cash balance as well, but taxed..