new pension rules

[janela]

When the new pension rules come in april 2006 it will be possible to take as a lump sum 25% of the pension value. How do you calculate the value of a final salary pension.

[dzug]

Most final salary schemes I have come across pay a lump sum (usually 3 times the annual pension) anyway so there will be no need to calculate values.

For those that don't there will be a formula for calculating the value taking into account the annual pension, any guaranteed increases and life expectancy. The Scheme administrators will be responsible for working it out.

[Gnu]

For the purposes of checking against the maximum allowed value (currently �1.5 million), multiply the annual pension by 20 and add any lump sum. I'm not sure that you can take 25% of that as a lump sum, though, it will depend on the scheme's rules.