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Age 50 Lump Sum now Net £1453 OR £189 per Yr at Age 60?
philng
Posts: 835 Forumite
I have just received correspondence relating to a previous pension for my wife.
Due to the small value they are able to either offer a lump sum now NET of tax at £1453 (she is aged 50) OR she can wait until age 60 & draw a guaranteed pension of £189 per year Gross.
It seems to me that the annual pension is the best option. Can anyone please offer any help with these options?
Due to the small value they are able to either offer a lump sum now NET of tax at £1453 (she is aged 50) OR she can wait until age 60 & draw a guaranteed pension of £189 per year Gross.
It seems to me that the annual pension is the best option. Can anyone please offer any help with these options?
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Comments
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It doesnt seem v.much to wait another 10 years for ? Im no way an expert but i am looking at similar situation, for me I think the lump sum (v.much smaller than your wifes) will be far more beneficial to me now, than in ten years time a comparitively small amount per year, assuming I get to 60.10.2009 startedclicking 16th 1free remotecontrolled extensionlead; Tesco freesims: DFW appliedfor 19th Saved £302.92 today by friend "mending" laptop I had rescued ; more freesimms : ;1 free eagashower smart (saves water);1 freebusinesscardholder;250nice businesscards;tbags; :cool:17thNovemberperfumesample;fatcheese£16.87; Get£sback £4.44:beer:0
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Don't forget, the lump sum will be tax free, whereas if she takes a pension at pension age it will be added to her state pension and taxed.
I would go for the lump sum if i were her
Is the lump sum just 25% of her pension pot and the rest to be left for a pension, this is what usually happens.make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
If the lump sum taken now under triviality then that will be taxable. I assume this relates to a defined benefit scheme as money purchase schemes have to wait until age 60 to exercise triviality. There has been a recent change to triviality on occupational schemes that allows different triviality rules compared to personal schemes (which effectively undoes simplification and starts the process of complication again!)I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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Yes it is an old money purchase scheme from 1985. They are able to distribute the full value as a lump sum (is this the triviality scheme?). The £1400 figure is Net of tax. we have no desperate need for the lump sum now so is the annual pension friom sage 60 the best option?0
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take or leave it will depend on your tax position more than anything else if you dont actually need the money.
How does the £1400 compare to the current transfer value?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Have not been advised of any transfer value. Tax positioin would be liklely to be basic rate tax now & on retirement.0
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