Small lump sum definition

What does Small lump sum mean?

The expression ‘small lump sum’, when used as a defined term in this glossary, refers to a specific type of authorised payment made after 30 November 2009 under Part 2 of the Registered Pension Schemes (Authorised Payments) Regulations 2009 (SI 2009/209).

Typically, ‘small lump sums’ will be payments of less than £2,000 derived either from member's uncrystallised benefit rights, or from member's/ dependant's crystallised pension rights. ‘Small lump sum’ payments were developed to help solve a problem popularly known as having a ‘stranded pot’, where the sum in question is too small to arrange a pension with. In order to qualify as a ‘small lump sum’ the payment must meet certain conditions laid down in the regulations.

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