NRA 60 Section B

[Fairland Evesham]

Hello, I have a question about the Lump Sum element of this pension.

For ease I'll use round figures, let's say I am due £10,000 per annum and then a Lump Sum of £30,000.

I believe the Lump Sum is tax-free. But would that £30,000 count towards Income, i.e. would it be added to my wage income and increase the income in that financial year therefore increasing my Income Tax?

Thanks.

[RobertT]

Section A/B members get a lump sum as standard attached to both their Age60 and Age65 benefits, which is worked out as 3x pension.
It's possible to reduce the pension for more lump sum, or vice versa.

The lump sum is tax free and therefore doesn't count as income.
It won't have any bearing on how much income tax you pay.
The pension itself will be classed as income and taxed accordingly.

You may also have some Cash Balance, which was accrued 2018-2024.
That is also a lump sum to be taken with RMPP Age65 benefits(but can also be transferred out to a SIPP). You may have to pay tax on that.

[Fairland Evesham]

Many thanks for the swift reply Robert and for the clarity, it's good to know that the Lump Sum will be truly tax-free.

I knew the NRA 60 Lump Sum was 3 times the Annual Pension but I hadn't realised that this also applies to the NRA 65.
A quick calculation proves you right