NHS pension...commuting lump sum..?

ipri

Hi...I will be retiring ? next spring.I estimate an annual pension of about £43K /£44k .I believe I can opt to convert some of this to my lump sum (this is tax free)...at a ratio of £12 for every £1 converted.

It "seems" a good idea to do this to reduce my exposure to higher tax bracket....but ..would I be better off keeping the annual pension since it is a lifelong guaranteed income?? any ideas.??

dunstonh

but ..would I be better off keeping the annual pension since it is a lifelong guaranteed income??

The only way to know for sure it to know the date of your death. What you can do is find out what the income difference is and see how many years it would take for the income to catch up with the lump sum. Whilst the income rises every year, the lump sum would pay a return as well so for simplicity ignore interest/income and rises in pension and treat them as cancelling each other out.