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Document Can I use a redundancy payment to purchase Additional Pension?

You have one month from the issue of your AP3 acceptance letter to pay the lump sum cost of your Additional Pension.

NHS Pensions cannot advise on whether or not it would be possible to purchase Additional Pension by lump sum with a redundancy / severance payment. It should be noted that HM Revenue and Customs will not allow you to withdraw a tax-free lump sum and receive further tax relief by reinvesting the money back into a registered pension scheme. This is known as "recycling lump sums" and could apply if the money is reinvested as a lump sum or in monthly payments.
It is possible that you could be affected by this rule if you retire within 2 years of making an election to buy additional benefits. If you think you could be affected discuss your plans with HM Revenue and Customs or a professional financial adviser before proceeding.
ap3, redundancy payment purchase
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