Take enhanced OA pension or Lump sum?

usignuolo

My sister, who is 63 this week is still employed, but on a self employed basis and the work is drying up. So far she has not applied for her old age pension but thinks she may now have to. As she has waited three years she can choose a lump sum (taxable) in respect of the three years so far plus the standard pension, or take an enhanced pension.

With interest rates at an all time low, would she be better off with the enhanced state pension - given the lump sum is taxable and she will not be able to get any decent return if she cashes it in? (She was contracted into SERPs on the state scheme for about ten years, so can expect an enhanced state OA pension).

Similarly she has a couple of personal schemes from previous years self employed, one has a fund of around £9,000 and the other £24,000. Again should she cash in or wait to see if the market picks up, given her age?

yelf

now is the worst time to cash in defined contribution schemes if you can avoid it based on fund values and annuity rates.