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Cash Lump Sum request

Use this form if you'd like to take a cash lump sum from your Royal London pension plan. You can take up to 25% of your lump sum tax free and any remaining amount will be taxed as income.

You should only use this form if you've discussed your options with Royal London.

This form should take about five minutes to complete. All fields are mandatory unless marked as (optional).

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Before you start

It's important you understand your retirement options and tax implications. If you're not sure if you can take a cash lump sum from your plan, speak to a financial adviser, or contact us on 0345 602 1028 or PP.Claims@Royallondon.com.

You won't be able to take a cash lump sum if you're:

  • under age 55, unless you are eligible for early retirement due to ill health
  • entitled to either primary or enhanced protection and you had a right to a tax-free lump sum of more than £375,000 on 5 April 2006
  • entitled to a lifetime allowance enhancement factor and the available portion of your lump sum allowance is less than 25% of the of the payment.

What to consider

If you’re only taking part of your savings

You can only take a cash lump sum if the minimum amount you ask to take is £1,000. The amount remaining in your plan must be no less than £2,500 (or £200 if you're still making regular contributions to your plan).

Exit charges

The value of your policy will not be affected by an early exit charge as this has been waived.

How tax will be deducted

We normally deduct income tax from the taxable part of your cash lump sum using an emergency tax code. Because this may not reflect your personal circumstances, we may deduct too much or too little tax.

If this happens, you'll need to reclaim or pay the difference directly to HM Revenue & Customs (HMRC).


The effect on future contributions

If you’re not already subject to the Money Purchase Annual Allowance (MPAA), taking all or part of your pension savings as a cash lump sum will trigger it.

Once triggered, the total contributions you can make to all of your pension plans within any tax year, without being subject to a tax charge, will be limited to the MPAA.


Lump sum allowance

There's limits on the total amount of tax-free cash you can take from your pension plan. This is known as the lump sum allowance (LSA).

The LSA £268,275, and any payments above this amount are taxed at your marginal rate of income tax.

It's important to check how much of your LSA you may have used with Royal London or other pension providers. If you provide incorrect or incomplete information, you could be liable for additional tax charges.

Find out more about pension allowances in our guide.


Can I change my mind?

Once this money has been paid, you cannot change your mind and return it to Royal London. In accordance with HM Revenue & Customs rules, cancellation rights do not apply to any pension withdrawals taken from a registered pension scheme.

 

Completing this form

Please complete all required fields to send your request.

We'll check the information you provide against our customer records to verify your identity and process your cash lump sum request.

1. Your details

Personal information collected on this form will be used to administer your request. To understand the detail of how we use your information you can read the privacy policy (opens in new window).

Personal information

Title
Email is the quickest and simplest way for us to communicate with you, it also helps us support the environment by reducing paper. We will use the email address you provide here to update our records and to send confirmation of the request.
Address

Policy information

You will find this on your statement or policy documents.
Please use the format AB123456C.

2. Pension savings risk warnings

Please read the information carefully. You should only continue if you understand and accept the risks involved.

Making sure your money lasts

You should think carefully before taking money from your pension savings and consider how it may affect your future income.

The money you've saved will need to last throughout your retirement. Taking too much too early could mean you, or your dependants, may run out of money later on.

Inflation can reduce your spending power

You may notice that your shopping today costs a little more than it did a year ago, and probably a lot more that it did 10 years ago. This is down to inflation.

As prices rise, the value of your retirement income may reduce. This means your money may not go as far in the future as it does today, and you may need to take more income to maintain your standard of living. This increases the risk of running out of money.

Your income could be taxed

You can earn up to a certain amount each year before paying tax. This is known as your personal allowance.

Any income you take above this allowance is usually taxed at your normal rate. However, if HMRC does not have the correct tax code for you, you could pay more tax. You may be able to reclaim this by visiting the HMRC website and completing the relevant online form.

You should also be aware that taking a large amount from your plan could also push you into a higher tax band, meaning you may pay more tax overall.

Tax rules depend on individual circumstances and may change in the future.


Investing the money elsewhere

If you’re planning to re-invest the money you take from your pension, you should be clear on whether you'll be charged for doing so. You should look at any charges closely and see how they compare with what you'd be paying to keep your money where it is.

It's also a good idea to weigh up the potential returns you could get on your new investment against the risks you'd need to take to achieve them.

Remember, the value of investments can fall as well as rise - meaning you could get back less than you started with.

Your state benefits could be affected

The amount of income you take from your savings could affect your entitlement to means-tested state benefits.

This means if your income or any money you have in the bank rises above a certain level, it could affect your eligibility to certain things like housing benefits and council tax reductions.

Beware of pension scams

Once you’re able to access your pension savings, you may be targeted by criminals trying to get hold of your money.

If you’re planning to take cash from your pension to give to someone else or to invest elsewhere, it’s important to be cautious. Pension scams can be convincing, and you could lose your money if something turns out to be fraudulent.

If you’ve been advised on what to do with your pension savings, always check that the person or firm is authorised by the Financial Conduct Authority (FCA). You can do this by visiting the FCA website.

Cold calls

Many people who have lost their pension savings to a scam were first contacted by a cold caller. A cold call is when someone you haven’t agreed to hear from contacts you about transferring or taking money from your pension.

Unsolicited calls about pension transfers or cashing in your plan are illegal. If you act on this type of contact, you could lose some or all of your pension savings.

For more information on how to spot and avoid pension scams, visit the FCA’s ScamSmart website.

Debt collection

If you’re in debt, either now or in the future, the individuals or companies you owe money to can make a claim for your pension savings when you take a payment.

While the money remains in the protective environment of your plan, it can’t be touched by anyone else.

 

Review and continue

Do you understand and accept the risks involved with taking a cash lump sum from your Royal London pension plan?

It’s important that you understand the implications of the decision you’re making. If you’re not sure you understand the risks involved, have another read through our risk warnings, or please contact us on 0345 602 1028 to discuss further.

3. Cash lump sum

Please provide us with the details of how you'd like to take your retirement savings.

Would you like to receive:
Please ensure you enter the gross amount.

Payment details

Please fill in this section with your bank details. The account must be a UK current account in your name or jointly in your name.

Must be 6 digits long
Must be between 6 and 8 digits long.

4. Identity verification and declaration


Verifying your identity

In order to satisfy the UK Money Laundering Regulations, we need to verify your identity before we can process your application.

We'll do this electronically, using your name, address and date of birth. We may run several electronic checks depending on the request, including checking your details against the electoral register and records held by fraud prevention parties. 

We may need to request additional information from you if we aren’t able to verify your identity this way.

Please confirm that you’re happy for us to carry out this check

Declaration

I confirm that I wish to take all or part of my retirement savings as a cash lump sum from my plan as detailed above.

Royal London has not provided me with financial advice in respect of taking all or part of my retirement savings from my plan. If I need financial advice, I am aware that I should speak to my financial adviser;

I declare that the answers I’ve given are correct and complete to the best of my knowledge. If further tax becomes payable because the information I’ve provided above is proven to be incorrect then I understand that I’ll be wholly and personally liable for the tax charge due and any resultant penalty as may be imposed by HM Revenue & Customs.