Full Pension or Lump Sum

jamesd

MikeJones, That quote should at least be saying "from this pension" at the end. Nice to at least give a clue that it isn't always best to get spousal benefit from this pension.

That quick calculation has a huge number of variable factors, including but not limited to:

1. Defined benefit commutation rates and other benefits (life assurance?) that might be included and related to the pension amount.
2. Health of both partners.
3. Age at which each dies.
4. Investment performance and interest in managing investments.
5. Annuity returns at the time one is purchased.
6. Stability of pension provider.

MikeJones_2

jamesd wrote: »

That quick calculation has a huge number of variable factors, including but not limited to...

Agreed. And coming back to the original poster's situation, in taking the pension at age 50 with his wife's position as a 'concern', he needs to consider what pension increases his pension will receive if he draws it at age 50.

With 3% inflation over 15 years each £1,000 (pension or cash) today would need to have 'grown' to £1,557 to match it.

Over 20 years that increases to £1,806 and over 25 years, £2,093.

A topical article about pensioner inflation appears in The Telegraph:

- Pensioners' cost of living increasing four times official inflation rate

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

iarocu

Thanks for all the replies. Plenty food for thought.

The spouses pension is 12k index linked regardless of what lump sum I get.

Looking to build a spouse pension seems a good idea. I'll need to look in more detail.

I think my full pension is fully index linked and the link continues past 65 but I'll double check. I'm getting into guesses here but as my parents are both around 80 years old and still healthy and active I could be drawing the pension for a long time so a bigger index linked pension, 20k rather than 18k at todays prices looks attractive and the safe bet.

We could live on that plus the old age pension so can maybe adopt a more risky approach with stocks and shares ISAs and Pensions.for the remaining lump sum.

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