Pension Conversion

When you retire you have the option to convert some of your annual pension into lump sum.  For every £1 annual pension you give up, you gain £12 lump sum.

However, there are certain HMRC rules which limit the amount you can convert.  You are allowed to take 25% of the value of your pension pot as tax free cash.

To calculate the value of your pension pot, you can use the following formula:

(20 x basic annual LGPS pension) + basic LGPS lump sum + in-house AVC (if you have one)

Pension pot value x 25% = Tax free lump sum limit

The Clwyd Pension Fund will calculate your limits for you at retirement and supply you with your conversion options.