A scheme may permit early retirement before age 55

Benefits can be calculated on service to date with no early retirement penalty or the benefit is calculated on prospective service with no early retirement penalty or somewhere in between the options.

If serious ill health and life expectancy is less than 1 year then commute whole pension for cash lump sum

• Before 75:

– Payment of ill health lump sum is benefit crystalisation event

– No tax if below lifetime allowance

• After 75:

– Payable as long as some lifetime allowance remaining at age 75,

– Payment after 75 is taxable as per recipient’s income under PAYE