Commutation of small pensions up to £2,000 – LITRG comments

Published on 31 January 2012

LITRG welcomes draft regulations which, from 6 April 2012, will allow small personal pension pots of up to £2,000 in value to be cashed in as a lump sum, subject to certain restrictions. But we comment that the rules appear to be unnecessarily restrictive, limiting the number of small pots which can be cashed in this way to two per person.

In December 2011, HMRC published the following:

Comments were invited on all three. In brief, thePDF icon LITRG response:

  • welcomes the measure, which has already been available for occupational pensions for some time
  • stresses the importance of clear guidance for all concerned – pension companies, HMRC, pension-holders themselves and advisers to pensioners
  • proposes that the rules should not be restricted to two small personal pensions per person, given that there is no such restriction for occupational pensions.


Contact: Kelly Sizer (please use form at

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