Taking a tax-free lump sum when you retire

When you take your pension, you can choose to swap some of it for a tax-free lump sum. For every £1 of annual pension, you give up you will receive £12 of tax-free lump sum. You can take up to 25% of the capital value as a tax-free lump sum. 

 

If you joined the LGPS before 1 April 2008 then you will receive a tax-free lump sum when you retire. You will also have the option to exchange part of your pension to increase your lump sum.