I am terminally ill. Can I take a lump sum from my pension?

19 June 2020


I have been in receipt of my teacher’s pension for three years. In August 2019, I was diagnosed with terminal cancer. I applied to take my pension out as a lump sum but was told I could not as I was already receiving it.

I have been given a prognosis of months and would like to make the most of the time I have left. Is there any way I can get hold of a lump sum from my pension?



First of all, I am sorry to hear about your prognosis.

Unfortunately, because you have been in receipt of your teachers’ pension for more than 12 months, it is not possible to convert any of the income you receive into a lump sum payment.

However, if you were to die within five years of drawing your teachers’ pension, a discretionary death grant should be payable [to your dependants] of five times your annual pension less any pension income you had already received.

If you are married, have a civil partner or a qualifying adult dependent on your death, a short-term pension will continue to be paid, in full, for the first three months. Once that period has elapsed a long-term pension is available. However, the amount payable is dependent entirely on your own pensionable service within the scheme.

If you have children under the age of 17 (or up to the age of 23 if in full-time education), they may also receive a pension income, although it would stop when they reach the age of 23.

If you have a disabled or incapacitated child who is dependent on you at the time of your death, a teachers’ pension may pay that child a pension for a longer period.

Ray Black is an independent financial adviser at Money Minder.

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