pension advice please
 

I have the chance of taking early retirement , I have 2 options with the pension settlement , do I take the maximum lump sum available and a smaller monthly pay out or a reduced lump sum and a larger monthly pay out ? , part of me thinks take it all as it's better in my pocket than theirs , but a larger monthly pay out gives me long term stability , what to do ?

Don't take advice on the internet over something as important as this.

Honestly, I once took advice from an online lawyer, turned out he was only a lawyer in his coffee breaks from his job as a Parcelforce driver.

Jon

depends on a number of things, some pension lump sums are taxed when the payment is over £30k, and some are tax free. When I got my Military pension, I took a lump sum and did not pay any tax on that amount, and am currently checking my other pension from Durham, to see if I have to pay tax

Have a look here it might be helpful for you

https://www.pensionwise.gov.uk/en/tax

and also if your future tax exceeds the £11500 a year then you will also have to pay tax on amounts over your annual personal allowance

Stu

An excellent question and one that is very difficult to answer for another. I have been considering the same for myself.

One important thing to consider is that the dependent's perion which is paid out after you will be significantly lower than the amount that you will receive yourself. With cash, on the other hand, it could all be left to your survivor.

I would say, think carefully and pethaps take professional advice.

If it was me.
 

I'd take the smaller lump sum and keep the larger payments coming in. It's certain that prices and costs of living will rise, for that you'll need the best income. It's also possible you might take on another job and not need a big lump sum. The only advice you need is on the stability of the fund, is it backed up and safe? If so, I'd go for long term gain over short term pound signs on the Brain.

With all due respect only you can answer your question and it will depend on your financial position and your long term plans and forcast. I took early retirement two years ago and in my case I went for a large lump sum because that worked best for me.

I would probably have to get a part time job just as a "top up" (and to get me away from the wife ) plus there is only so much decorating , d.i.y , car cleaning etc that i could do !

I was in the same position about 4 years ago. You need to get the figures from your pension provider to see where the break-even point is.

I hope to live for a long while (only the good die young) and as the mortgage was already paid off, I opted for no lump sum and maximum pension.

The maximum state pension - when you reach 65 or 66 in my case - is only about £150 per week so that was another factor that made my decision of maximum private pension available.

Are they going to make you "redundant"? If so remember you will get SRP (Statutory Redundancy Pay) + a in lieu of notice payment (if your employer was kind like mine was) + any special severance deals that my have been negotiated for your site.

If not may be worth asking if they can make you redundant.....

Also, you will need to check up where you stand re. state pension as your private pension may have been contracted out, if so your years of NI may be less than you think. there is an on-line program that uses your NI number so you can check this out.

Looking back - "early retirement" for me was the right move at the right time .......

No chance of being made redundant , but they are looking at our terms and conditions and trying to cut our overtime allowances down to single time, which will have a big effect on my pension in the future , the danger is if i don't go now i may miss the bus and be left in a lot worse position pension wise

Pensions
 

Hi
As above ! You need to make the decision yourself but if I were considering retirement I would look at the benefits one against the other
If you earn over £11500 per year you will still be a tax payer
If your maximum lump sum is tax free you have to weigh up one against the other, is the higher lump sum tax free against lower lump sum higher monthly payment (possibility of paying tax)
With my pension I can take a lump sum between two figures say £19000 minimum or £40000 (at 60 years of age) maximum or anything in between which then alters the monthly payment.
You also have to look at your family history because in my case my father died at 65 years of age two months after his official retirement so in his case if he had taken the lower amount and the higher payment he would have received two months payment for 40 years service

You need to consider your retirement age due to your state pension being added to your private pension

Regards
Steve