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New rules for trivial lump sum announced

The government has announced changes which will allow people to take very small benefits from occupational pension schemes (i.e. company pension schemes) as a lump sum.

In his first budget, chancellor Alistair Darling said the new rules would look at one scheme in isolation and allow benefits to be paid as a lump sum where the value of those benefits is below £2,000 - allowing people to take very small benefits in one occupational pension scheme as a lump sum under the triviality rules while receiving an income from another, larger, pension pot.

The new rules will not apply to private pensions, such as a personal pension scheme.