I have some small pensions with Rothesay. Mainly residue left over from previous transfers. I have had a letter from them offering me one off lump sum payments. Anybody else had this offer from a pension company.

I don't understand tax codes, but the biggest pension is £960 per year. This is paid £80 month, but they stop £36 pm tax. Giving me £44.
Obviously, they are stopping tax also from the amount my state pension is over the £12,570 tax allowance.
They have offered me £8,500 final lump sum payment. What I am concerned about is how they are going to tax it.
Any suggestions