RPSM08100080 - Technical Pages: Pension age: Serious ill-health

Serious ill-health

Pension benefits may be fully commuted to a lump sum and taken on the grounds of serious ill-health at any age, except that before 6 April 2011 payment had to be made before the member’s 75th birthday, providing that at the time the benefits are taken the scheme administrator has received evidence from a registered medical practitioner that the life expectancy of the member is less than a year. However, where the member is married or a civil partner at the point of crystallisation, 50% of the benefits derived from any contracting-out rights must be retained by the scheme to provide for a survivor’s pension.

Only uncrystallised pension benefits may be commuted on these grounds.

For further details including the tax treatment applicable to these lump sum payments see RPSM09104600.