explanation

thebullsback · 19 November 2017 at 3:19PM

I received this option to take retirement early from Aviva
I am employed male 58 and to be honest could do with a cash injection.

Assuming retirement on 11 nov 2017
full pension
£174.72 p/a yearly increase 5% guarantee 5 year spouse £87.48
No tax free sum

option two
£2,667.51 tax free lump £113.16 p/a yearly 5% increase 5year Guarantee £87.48 spouse

option three
£2667.51 tax free £6.811.36 another insurance company

option four
£9,478.87 buy income from another insurance company

option five--Triviality option

£5,122.74 tax free then £12,294 paid with the tax already paid.

Then there is this offer also
Pension from state age ---I am 58 now
option one

£287.64 3% 5 years £144.04 for spouse

option two
no tax free sum £11,012.08 purchase benefits from another provider

option three
tax free £5,122.74 + £12,294.57 lump sum with the tax already off.

This pension was due to a previous employer going bust and my pot was then put into a Norwich union fund later to be Aviva and I have not contributed into it since about 1992.

As I say I could do with a cash injection now.
I have other pensions that will see me OK in retirement
So can I take lump sum?
Would I be mad to do that?
Can anyone think of a better way of getting after the lump sum?
Many thanks for reading.

Sarastro · 19 November 2017 at 3:39PM

It's relative to how badly you need a 'cash injection' now and what other pension you have to cater for retirement. If you have sufficient pension for your needs in retirement, then you can take a cash lump now. It's only mad to do so if you don't have sufficient pension income for your needs later on. Generally, I'd say keep the money invested in pension. What do you need the 'cash' for? If it's to pay off debt, then I'd say find another way to manage it. But if you want to do something more meaningful with it, then you're not wrong to consider it.

xylophone · 19 November 2017 at 5:25PM

Have you checked with Aviva that you are eligible for "Trivial Commutation"?

You have a number of other pension arrangements including your current NHS Scheme.

https://www.litrg.org.uk/tax-guides/pensioners-and-tax/how-do-i-cash-my-small-pension-trivial-commutation

LHW99 · 19 November 2017 at 6:18PM

I think if you take more than the 25% tax free lump sum from a DC pension you are restricted to a maximum contribution of £4000 p.a. going forward.

Would this cause problems?

thebullsback · 19 November 2017 at 6:22PM

I have other pensions but I am not in receipt of anything from them and my understanding is that if your are in receipt of a pension payment you need to have a 12 month gap before you can take another.

xylophone · 19 November 2017 at 9:42PM

See link in post above under

Can you explain the £30,000 limit?

explanation

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