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