What are your pension surrender options?

Pension Surrender

If you are not currently paying into or receiving your personal or old company pensions, you can release 100% as a cash lump sum – up to 25% Tax Free.

Pension Surrender
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What is pension surrender?

Pension Surrender is often used when people want to receive a cash lump sum of money from their pension early. Obtaining cash from your pension via pension surrender is for the most part not advisable. Pension fund proceeds, regardless of whether they are occupational scheme or personal pension scheme funds, are intended to provide plan members with an income after they have retired, so to surrender pension benefits early would usually reduce the eventual retirement income.

Pension Surrender normally gives you the option to release part or all of your pension as a cash sum, 25% of which is tax free, and the rest of it would be taxed at your marginal rate of tax or, alternatively, provide you with an income for life, which is also taxed as earned income. Please note that the tax treatment would depend upon your personal circumstances and may be subject to change in the future.

Whether people cash in pensions via pension surrender from an occupational pension scheme or personal pension scheme, you can still usually take a cash sum as well as income. This tax free cash sum is known as the Pension Commencement Lump Sum or PCLS.

The income you receive will depend on several factors including where the money comes from – a personal pension or occupational scheme. To a certain extent you have much more choice about how the income can be paid from a personal pension compared with an occupational scheme. You have the option to surrender pension benefits or unlock pension cash sums without the need to take immediate income.

Even so, to release pension benefits through pension surrender, from any type of scheme, you need to consider your options thoroughly, which is where firms such as Grove can help.

Pension surrender resources

If you are considering surrendering your pension you will find some of these guides useful:

Pension Surrender Advice

Grove Pension Solutions Ltd is regulated by the Financial Conduct Authority.

We specialise solely in Defined Benefit Pension Transfer and Pension Release.

We were established in 2007 so have many years of experience successfully helping 1000’s of individuals. Some of them we advised to transfer their pensions and some of them we advised to leave their pensions where they are and not transfer them.

So why not Get Started Today and receive your free Information Pack.

Pension Transfer Consultation

Get Started Today

Free Pension Transfer Guide & Consultation
If you would like to find out if transferring your pension or taking a cash lump sum is suitable for you, we can provide a free initial Pension Transfer Consultation known as abridged advice.

Simply complete your details below, and we will send you our Pension Transfer Consultation Pack and Enquiry Form.

As part of the consultation we will look at:

  • What existing pension plans you have in place.
  • What your plans are for retirement.
  • Your needs for flexibility and control.
  • The likely cost of more in-depth advice.

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Defined Benefit Pension Transfer Warning

Transferring away from a defined benefit pension scheme means you will lose valuable guarantees.

Taking benefits early will almost certainly reduce your pension income in retirement and is only suitable for a limited number of people and circumstances. This should not be seen as an easy option for raising cash.

If you release all your money from your pension early you will not have anything left to provide you with income in retirement.

When releasing cash from your pension, usually up to 25% is tax free, the balance is taxed at your marginal rate at the time and could change in the future.

Watch the FCA video explaining the expectations of financial advisers when advising you on defined benefit pension transfers.

Grove Pension Solutions Ltd is authorised and regulated by the Financial Conduct Authority (Reference number 465051).

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