Example of taking a lump sum
When Jane retires she has built up the following benefits:
Pension = £6,667 a year
If Jane wants to take a £20,000 lump sum she will need to give up £1,667 of her pension.
Lump sum ÷ 12 = amount of pension you need to give up.
Her benefits will be:
Pension = £5,000 a year
Lump sum = £20,000