Ruling to free up billions in GPP and stakeholder

HM Revenue & Customs announced the trivial commutation option currently open to occupational scheme members will be opened to all from next April.

There are currently around £6bn in dormant pots this size, of which 70% are parts of GPP or stakeholder schemes.

These savers can now take this money in one or two lump sums, rather than being forced to annuitise.

B&CE customer solutions director Jamie Fiveash welcomed the government’s decision and called for further concessions allowing pension pots to be taken as lump sums.

“We have been campaigning for a level playing field across DC schemes for a number of years,” he said.

“However, being able to commute just twice is too restrictive, why not offer an unlimited amount, providing the total does not exceed the overall trivial limit and there is no more than one done at any one provider?

“Or perhaps increase from £2,000 to £5,000 and offer up to three or four commutations – as £5,000 still only represents an annuity of around £250 a year.”