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Pension and Lump Sum

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  • Andy_L
    Andy_L Posts: 13,075 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    dhj wrote: »
    It's a final salary pension indexed linked (I believe to 5%)

    In that case it is likely that the amount of lump sum you get by giving up pension (called commutation) will not buy you that amount of pension "on the open market". Typically ablout 20:1 is "fairish".
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    Part of the Furniture Combo Breaker
    It is likely that inflation will increase, maybe dramatically, in the next, say, 25 years during which you will be drawing it. 5% indexation may not be enough to cover it.
    Would your pension increase if you didn't take it at 55, if so consider the future and maybe delay for a while and wiork now whilst you can.
    The only thing that is constant is change.
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