20th April 2011
Basically what this means is that where people have gathered a small amount of pension up to £2,000 on current rules they can take it all as a lump sum, hence the ‘trivial' tag though perhaps not everyone would feel this way.
Here is a summary of the current situation from website Moneyfacts.
However, at the moment, it is only if you have gathered together a £2,000 pension in an occupational i.e. employer pension scheme you can get the money back – the commutation part – but not if you have a personal pension.
The Government plans to change this as reported here on Citywire.
It is also considering whether to increase the trivial amount – to £5,000 – for both categories of pension.
On Citywire, Tony Clarkin writes: "What's this, an outbreak of common sense? If this was a Labour government, they'd set up a Department for Trivial Commutation and put John Prescott in charge."
To receive our free weekly email sign up here.