Trivial commutation

Before April 2006, small pensions worth less than £250 a year could be exchanged (or ‘commuted’) for a one-off lump sum payment.

Now, if the value of all of your pension savings from all of the pension schemes that you have contributed to (excluding your state pension) add up to less than 1% of the Lifetime Allowance then you may commute them for a one-off lump sum payment.

You must be over 60 and all of your pension savings must be commuted within one twelve-month period.

From December 2009, benefits from a single occupational pension scheme that are worth less than £2,000 (about £100 a year) may be commuted into a one-off lump sum payment.  This does not extend to Stakeholder or Personal Pensions.