Trivial commutation lets you swap certain pensions for one lump sum when all your pensions together are worth £30,000 or less.
Pension Wise, run by MoneyHelper, is a free, impartial, government-backed service that explains how to take money from a defined contribution pot. Working out which of your pensions fall under which rule is easier with someone looking at your statements. Our enquiry form on this page arranges a no-cost ring from an FCA-authorised adviser.
What is trivial commutation of a pension?
Commuting a pension means giving it up, or the right to it, in return for a one-off payment. GOV.UK puts the idea in one sentence: "If all your private pensions are worth £30,000 or less, you may be able to take the whole amount from certain types of pensions as a lump sum." The result is called a trivial commutation lump sum.
The £30,000 is a test of your pension savings as a whole, not of the single pension being cashed in. HMRC's Pensions Tax Manual (PTM063500, updated 9 October 2026) counts the value of every type of arrangement in every registered pension scheme you belong to, even though only some of those rights can be commuted this way.
A second route exists for small pensions: a payment of £10,000 or less, which HMRC treats as a separate kind of lump sum and which is compared with trivial commutation below. Neither can normally be paid before minimum pension age; the exceptions are in the rules table.
Which pensions can be trivially commuted?
The usual answer is a defined benefit pension, such as a final salary pension. GOV.UK says "You can usually do this if the pension is a defined benefit pension." HMRC's manual is more exact, and its list is closed. The rights that can be commuted are:
- benefits under a defined benefits arrangement or a collective money purchase arrangement, whether not yet drawn or already in payment as a scheme pension; and
- an in-payment money-purchase in-house scheme pension, meaning a scheme pension the member became entitled to under a money purchase arrangement, where "it must be payable by the scheme administrator, not an insurance company".
That in-house scheme pension is the only money purchase pension on the list. Uncrystallised money purchase rights, the ordinary defined contribution pot, are not: in HMRC's worked example, £800 of them "cannot be paid as a trivial commutation lump sum", though they may be paid as an uncrystallised funds pension lump sum. A lifetime annuity bought from an insurer still counts towards the £30,000 total even though it is not on the commutable list; see cashing in an annuity.
Scheme rules decide when you can take a pension, GOV.UK says, so the scheme is the place to ask whether it pays these lump sums at all. The NHS scheme's own one-off payment rules are in cashing in an NHS pension, and the wider picture for final salary schemes is in cashing in a final salary pension. Wondering whether one of your own schemes could qualify? Mention it when the adviser rings after you use the form here.
The trivial commutation rules and the £30,000 limit
HMRC's manual sets conditions that all have to be met for a payment to qualify:
| Condition | What the rule says |
|---|---|
| Total value | Your rights across all registered pension schemes must be worth no more than £30,000 on the nominated date. |
| Minimum age | Normal minimum pension age: 55 now, 57 from 6 April 2028 under section 10 of the Finance Act 2022, with uniformed services schemes staying at 55. Earlier only if the ill-health condition is met, or if you have a protected pension age under the paying scheme, have reached it and meet its conditions. See taking a pension at 55. |
| Lump sum allowance | You must have some available when the lump sum is paid. |
| Valuation date | You nominate it: the first day of your 12-month period, or a day in the 3 months before it. If you do not choose, the first day is used. |
| 12-month window | It starts on the day the first trivial commutation lump sum is paid. Anything paid after the 12 months have passed does not qualify. |
| Whole scheme | The payment must extinguish all your entitlement to the commutable benefits under the paying scheme, along with any identifiable contingent beneficiary's benefits. You can commute one scheme and leave another. |
| Pension added later | Contributions made, or pension earned, after the nominated date cannot be commuted. Growth in rights that were already commutable can be included. |
In GOV.UK's plainer version, several pensions paid out this way share one valuation day, at most 3 months ahead of the first payment, and every payment lands within 12 months of it.
How the £30,000 is counted
The scheme paying out puts a capital value on what is being commuted. For the £30,000 test itself, HMRC's manual prescribes the valuation:
- A pension in payment on 5 April 2006 is valued as 25 times its annual rate on that date, not its rate today.
- A defined benefit or collective money purchase scheme pension that started later is valued as 20 times the first 12 months' pension paid.
- A lifetime annuity is valued using the sums and market value of the assets used to buy it.
- Uncrystallised rights in any registered scheme are included, including ones you do not plan to commute.
HMRC's worked example, set in 2024 with the same £30,000 limit as today, shows how the pieces add up. Catherine, 63, has three schemes. A scheme pension of £600 a year that began before 6 April 2006 was £510 a year on 5 April 2006, so it counts as £12,750 (£510 x 25). Scheme B holds £11,700 of uncrystallised defined benefits and £800 of uncrystallised money purchase rights, and scheme C holds £4,700. HMRC's total is £29,950, under the limit. She can commute the defined benefits, but not the £800 of money purchase rights, which have to go another way.
A total close to £30,000 is where the nominated date and the choice of schemes can matter. With your statements in hand, an FCA-authorised adviser could test both on a free call; arranging it takes a minute on the form on this page.
Small pots: the £10,000 lump sum alternative
A pension worth £10,000 or less can usually be cashed in whole as a "small pot" lump sum, GOV.UK says: usually up to 3 from different personal pensions, and unlimited from different workplace pensions. The conditions in full are in small pot pension rules. Side by side, the two routes differ in what they measure:
| Trivial commutation | Small pot lump sum | |
|---|---|---|
| The limit | £30,000 across all your registered pension rights | £10,000 or less per payment; under regulation 11A your other savings are not counted (regulation 11 also tests related schemes of the same employer) |
| What it can cover | Defined benefits, collective money purchase, in-payment in-house money purchase scheme pensions | Under regulation 11A, uncrystallised rights or a pension in payment in a scheme that is not occupational or public service; regulations 11 and 12 cover those schemes |
| How often | One 12-month window across all schemes | Under 11A, three in all (no more than two earlier payments), each clearing one arrangement rather than a whole scheme |
| Lump sum allowance | Some must be available | Not used up, HMRC says |
A small pot lump sum "can be made in addition to any trivial commutation lump sum payment the individual may receive", so one does not rule out the other. A defined contribution pot of £10,000 or less cannot be trivially commuted but may qualify as a small pot. Left invested, a pot's value can go down as well as up and you could get back less than went in.
How trivial commutation is taxed: 25% tax-free, 75% taxed
The tax depends on whether the pension has been drawn. HMRC's manual says that where part or all of the lump sum comes from uncrystallised rights, 25% of their value is not taxable and the remainder is taxable as pension income. Where all of it comes from crystallised rights, such as a pension already in payment, the whole lump sum is taxable as pension income.
Tax falls in the tax year the lump sum is paid, and the payer should operate PAYE on it. Because the taxable part is pension income, GOV.UK warns that a large amount taken from a pension might be taxed at a higher rate. How the bands work is in tax on pension income, and the 25% rule in the tax-free lump sum guide. A small pot lump sum is taxed in the same way, as how small pot pensions are taxed explains.
Does trivial commutation trigger the money purchase annual allowance?
No. HMRC's list of payments that do not trigger the money purchase annual allowance includes a trivial commutation lump sum and funds taken from a money purchase arrangement as a small lump sum. The route still matters. In HMRC's example, someone who has already had three small lump sums from non-occupational schemes takes an £8,000 pot as an uncrystallised funds pension lump sum instead, and "payment of an uncrystallised funds pension lump sum is a trigger event for the money purchase annual allowance." The effects on later saving are in the MPAA guide and flexi-access drawdown against UFPLS.
Trivial commutation: questions people ask
Can I trivially commute a pension that is already in payment?
Yes, if it is a defined benefit or collective money purchase scheme pension, or an in-payment in-house scheme pension of the kind above, and the other conditions are met. A pension from an insurer, such as a lifetime annuity, is not on the commutable list. The whole lump sum from crystallised rights is taxable.
Can a spouse's or dependant's pension be trivially commuted?
Yes, as a trivial commutation lump sum death benefit. A small dependant's pension can be commuted into a lump sum if the payment ends the dependant's entitlement to both pension and lump sum death benefits under the scheme for that member. The maximum is £30,000 per scheme, not across all schemes, and the whole payment is taxable as pension income of the person receiving it. Contingent benefits under your own pension follow the rules table instead. See what happens to a final salary pension on death.
What if my pensions add up to more than £30,000?
The payment cannot be a trivial commutation lump sum. A lump sum of £10,000 or less may still be possible under the small payment rules, and other ways of taking a pension are covered in cashing in your pension and your options at retirement.
What do I give up by commuting?
The pension stops, and so does any identifiable contingent beneficiary's benefit under the paying scheme. You then have the tax to deal with in the year of payment. Whether that suits you depends on your other income, health and family.
Putting your numbers to an adviser
The limits come from the rules; your own mix of pensions, their values and the date you want the money decide what is workable. Gather your statements and send a request via the enquiry form on this page, after which an FCA-authorised adviser calls back free to check the sums with you. If an unexpected caller or email offers to cash in a pension, read the FCA's pension scams guidance first. The wider options are in pension drawdown.