A company I used to work for is closing its pension scheme and has given me the option of either taking the money as a lump sum or transferring to another scheme. If I take the lump sum (not much, <£7000), it says the first 25% is tax free and the rest is taxed on an emergency code and I have to negotiate any refund from the tax office. I think it would work out about £1K in tax, at 20% on 75% of the lump sum. At the moment I'm self-employed and not earning very much and was expecting to be well below the personal allowance tax threshold this year. Therefore even if I take the lump sum, I might be able to reclaim most of the tax back. Is that right? Anyway - I'm not sure what to do. The lump sum is very tempting, but I don't have any other pension savings at the moment (am in my 30s). Mumsnet please help!