Pension dilema........

sabelu

MY final salary schemehas just closed and I have received the final projection. The fund is worth around 25k after seven years contributions and will pay £62 per week at todays values according to the paperwork which I believe is very good. So to move the fund to a SIPP I believe would be wrong. However I 50 in Sept and wonder whether taking the reduced weekly income of £37 pw and investing that amount in my SIPP gain the tax relief would be a good option. Assuming I live to say 75, invest the weekly amount for 15 years and obviously take the income when I retire I believe this mght be agood option and I will gain overall plus have the investment opportunity within my SIPP.

What does anyone have to say?

yelf

when you say closed do you mean wound up and now you are being given the option of taking a transfer of £25K pa, or a £62 per week income. Does this £62 provide any spouse benefits or escalation?

sabelu

Yes but take the income @ 50 rather than 65 and yes there would be a spouse benefit full for first five years and 50% thereafter.

yelf

for one thing the income would be taxed anyway.

Who is your SIPP with - a lot of SIPs have high charges for regular contributions. The 37pw equates to an annuity rate of 7.7% from a transfer value of £25k - which is good.

sabelu

SIPP with HL