Practical Law UK Glossary 8-204-0444 (Approx. 3 pages)
Glossary
Serious-ill-health lump sum
A member of a registered pension scheme may commute the entirety of his or her pension benefits for a serious-ill-health lump sum, provided that a registered medical practitioner has certified that the member has less than 12 months to live. All or part of the member's lifetime allowance must be available and none of their benefits must have previously crystallised. Payment of the lump sum will extinguish the member's entitlement under the scheme. There is no minimum age restriction on payment. If a serious-ill-health lump sum is paid after a member has reached the age of 75, the lump sum is taxable at the member's marginal rate of income tax.