Lump sums cannot be returned to pension scheme

Savers who withdrew a pension lump sum because of speculation about changes that might affect their pensions in the 2024 October Budget will not be able to return them.

HMRC confirms in Pensions Schemes Newsletter 165 that schemes may not take back payments of pension commencement lump sums (PCLS) or uncrystallised funds pension lump sums (UFPLS).

The cooling-off period that applies to some pension contracts and policies under Financial Conduct Authority (FCA) rules does not apply in this circumstance HMRC says.

The newsletter warns that if the conditions for making a payment of a PCLS or UFPLS are not met it is unauthorised and the unauthorised payments charges will apply.

The payment of a tax-free lump sum cannot be undone and the member’s lump sum allowance will not be restored. The payment must be tested against their...