(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
[PN8.17]
The second situation in which the whole of a member’s
pension (other than GMP or Protected Rights (see
PSI6.1.10 -11))may be
commuted without regard to normal limits is where at the time the
pension becomes payable the member is in “exceptional
circumstances of serious ill health”. To restrict such a
person to a monthly pension would probably be unfair. Both the
member and the employer may have contributed to the scheme for many
years and the pension instalments prospectively payable may
represent poor value for those contributions, even allowing for
normal commutation and for the usual pension guarantees. A member
in this context can include an ex- spouse (see
PSI3.1.1).
