pension advice please

myfirstrover · 17th May 2017, 18:00

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 ?

Rooney · 17th May 2017, 18:05

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.

Fusilier · 17th May 2017, 18:07

Quote:

Originally Posted by myfirstrover

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 ?

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

MSS · 17th May 2017, 18:10

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.

Saga Lout · 17th May 2017, 18:18

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.

myfirstrover · 17th May 2017, 18:25

Quote:

Originally Posted by Saga Lout

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.

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 !

steveo · 17th May 2017, 18:47

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

hinged_bap · 18th May 2017, 15:09

Quote:

Originally Posted by myfirstrover

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 !

that reminds me of a comment made by a retired colleague I recently met at the checkout in a local supermarket, he'd retired circa 2 years ago.

I asked him (sic) "are you enjoying your retirement". His reply was: "I was - until she retired 6 months ago" ( pointing at his wife ).

Darcydog · 18th May 2017, 15:56

Quote:

Originally Posted by hinged_bap

that reminds me of a comment made by a retired colleague I recently met at the checkout in a local supermarket, he'd retired circa 2 years ago.

I asked him (sic) "are you enjoying your retirement". His reply was: "I was - until she retired 6 months ago" ( pointing at his wife ).

I am not so sure a total stopping of work is a good thing - too many good friends did that and developed health problems within a year or two. Those that got a little job seemed to thrive.

I am now doing something totally different to what I did as my career and loving every minute of it!

Whereas it used to be 40 to 45 hour weeks I now do no more than 20 - Tue Wed Thur so I have lovely long weekends and I haven't had to start taking benefits from my pension yet - and I get my OAP later this year!

I think I will just save that.

It's amazing how little you need when the kids have left home and it's just the two of you both working part time - SWMBO works Wed Thur Fri.

Wish I had done this years ago.

steve-45 · 17th May 2017, 18:31

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 .......

17th May 2017, 18:00	#1
myfirstrover Posted a thing or two Rover 75 2.0 cdi Join Date: Mar 2011 Location: Newcastle upon Tyne Posts: 1,896 Thanks: 401 Thanked 448 Times in 303 Posts	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 ?

17th May 2017, 18:18	#5
Saga Lout This is my second home MG ZT and Rover 75, Join Date: Jul 2013 Location: Wigan Posts: 3,276 Thanks: 2,556 Thanked 2,685 Times in 1,037 Posts	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.

17th May 2017, 18:47	#7
steveo I really should get out more....... None Join Date: Sep 2010 Location: N/a Posts: 2,108 Thanks: 1,369 Thanked 551 Times in 386 Posts	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 Last edited by steveo; 18th May 2017 at 04:27..

17th May 2017, 18:05	#2
Rooney Suspended MG ZT 135+ Rover 75 CDTi Tourer, 75 2.5 V6 Saloon Join Date: Oct 2014 Location: County Antrim Posts: 2,027 Thanks: 835 Thanked 882 Times in 557 Posts	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.

17th May 2017, 18:10	#4
MSS This is my second home Rover 75CDT, Jaguar XF-S 3.0V6, V'xhall Omega V6 Estate, Twintop 1.8VVT, Astra Estate and Corsa 1.2 Join Date: Dec 2007 Location: Suffolk Posts: 7,085 Thanks: 283 Thanked 624 Times in 440 Posts	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.

17th May 2017, 18:31	#10
steve-45 This is my second home Rover 75 Saloon CDTi Join Date: Oct 2015 Location: Belvedere Posts: 4,076 Thanks: 108 Thanked 1,089 Times in 774 Posts	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 .......