Ill Death Lump Sum (pensions) - has anyone else heard about this?

I am not sure how many of you out there with terminal cancer are aware that you may be able to cash in your pension early?  I believe it is referred to as an ill health lump sum.


A friend of mine who has terminal brain cancer found he was able to do this due to the fact he has a stage IV cancer like myself, mine being breast cancer.  I have to admit it was a shock to the system to find this may be possible.


A lot depends on what your firms scheme’s definition of what ill-health (sickness) means, but usually you will be considered for an ill-health pension if you’re unable to carry out your normal job because you’re physically or mentally ill and have a life expectancy of less than a year. That is the important proviso - your life expectancy which for many of us is hard to deal with on a daily basis let alone for this purpose.


I myself, am now in the process of seeing whether I can do this myself in light of my condition.  I am terminally ill with a Stage IV breast tumour and metastases with secondary cancers of the spine and liver.  I have to discuss with my Oncologist to discover what my possible prognosis is in light of the terms of my insurance people.


Every year thousands of people in the UK are diagnosed with conditions that prevent them from continuing to work. Many of them it seems take the option of early retirement due to ill health which I had not even contemplated. One consolation is that many are able to take their pension benefits early too, to help them support themselves financially. This again is an important point if I die what happens to my husband Paul.


Provided you meet the criteria of your scheme, you may be able to take your benefits early – and your scheme may even pay you an ill health lump sum due to your condition. But this depends on the scheme you are a member of.


Since we have been looking into this, my husband and I wondered how many people out there in a similar situation, knew this sum was possibly available to them.  It may not be straight forward as you might think, but it may help with financial matters going forward and how able you are to enjoy the life you have whilst you still have it. 


No one can really predict how long a cancer patient has to live, they can only guess, like how long is a piece of string? I don’t know how long I have, I know my condition is slowly deteriorating and I accept that, and I will fight until they have tried what they can and let my body do the rest.


Please if you are in a similar position, then please take a look and see what your company can do for you. I apologise if this has gone into the wrong place as it is a while since I have been on the boards.


Hi Cookie17, Sorry to hear you are having to think about this and your friend too. I did know about this and whilst I am not there just yet, I have checked out the rules of my current pension scheme. I haven’t yet gotten around to checking those for other pension schemes from different employers but I know I need to (another job on a long list!). The reason you have to be terminally ill with less than 12 months to live is that HMRC have some specific guidelines about releasing your pension fund tax free. They call it “serious ill health” and it is their definition that includes the 12 months. I have tried to paste the link to the Govt website. It is worth googling it as there are loads of sites out there giving I for,action which can be quite helpful about how you do it.

Cookie and Rachel, thank you so much for this info. I have skin mets but according to my onc am not terminal…yet. I have been considering this as i know i am not up to returning to work but didnt really know where to start. If only people knew how awful it is to think of your life ending in such cold and clinical terms I also think that we need to bear in mind that receiving a pension may affect any benefits rights we may have???  As if we dont have enough to deal with, eh!! Please keep us upadated with any decisions you make or any outcomes. xx