SCHEDULES

C1C2 SCHEDULE 5F1PENSION INCREASE OR LUMP SUM WHERE ENTITLEMENT TO RETIREMENT PENSION IS DEFERRED

Annotations:
Amendments (Textual)
F1

Sch. 5 heading substituted (18.11.2004 for specified purposes, 6.4.2005 in so far as not already in force) by Pensions Act 2004 (c. 35), s. 322(3)(a), Sch. 11 para. 3

Modifications etc. (not altering text)
C2

Sch. 5: sums amended (coming into force in accordance with arts. 1(4)(5), 7 of the amending S.I.) by The Social Security Benefits Up-rating Order 2023 (S.I. 2023/316), arts. 1(3)(c), 4(3)

F2Calculation of lump sum

Annotations:
Amendments (Textual)
F2

Sch. 5 paras. 3A, 3B and cross-headings inserted (18.11.2004 for specified purposes, 6.4.2005 in so far as not already in force) by Pensions Act 2004 (c. 35), s. 322(3)(a), Sch. 11 para. 8

C13B

1

The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.

2

In this paragraph—

  • ‘accrued amount’ means the amount calculated in accordance with sub-paragraph (3);

  • ‘accrual period’ means any period of seven days beginning with a prescribed day of the week, where that day falls within the period of deferment.

3

The accrued amount for an accrual period for a person is—

where—

  • A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period of deferment, zero);

  • P is the amount of the Category A or Category B retirement pension to which the person would have been entitled for the accrual period if his entitlement had not been deferred;

  • R is—

    1. a

      a percentage rate two per cent. higher than the Bank of England base rate, or

    2. b

      if regulations so provide, such higher rate as may be prescribed.

4

For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—

a

at the beginning of the accrual period immediately following the accrual period during which the change took effect, or

b

if regulations so provide, at such other time as may be prescribed.

5

For the purposes of the calculation of the lump sum, the amount of Category A or Category B retirement pension to which the person would have been entitled for an accrual period—

a

includes any increase under section 47(1) and any increase under paragraph 4 of this Schedule, but

b

does not include—

i

any increase under section 83A or 85 or F3paragraphs 5 to 6A of this Schedule,

ii

any graduated retirement benefit, or

iii

in prescribed circumstances, such other amount of Category A or Category B retirement pension as may be prescribed.

6

The reference in sub-paragraph (5)(a) to any increase under subsection (1) of section 47 shall be taken as a reference to any increase that would take place under that subsection if subsection (2) of that section and section 46(5) of the Pensions Act were disregarded.