AVC payout for early retirement

dwileflunker

I wonder if anyone can tell me if this is a good deal. My initial thought is that it is a good deal, but I don't have any experience. I am taking early retirement at 59 (pension scheme retirement is 60), and the company have an in house AVC type scheme. For the money in this scheme they have offered me £1 pa of pension for every £16.30 in the scheme, guaranteed for 5 years with a 60% spouses pension on death and inflation increases up to 5%, although this increase will drop to 3% in line with government guidelines (whatever they are). I have the choice of accepting this or taking the pot of money elsewhere, but my initial enquiries don't seem to be able to match this. Should I accept the company offer?

Any help would be appreciated.

dunstonh

The annuity rate is 6.12% which is good for age 59 and spouses option. Unless you are a smoker or have a health condition, it is unlikey you would beat that on an open market option. If you do, then your best bet is to see an IFA as that is the easiest way to get info on enhanced rates from the companies that offer them (the FSA tables do not give any accurate data on enhanced rates).

dwileflunker

Thank you for that. Like I first thought it seems to be a good offer.

glenbois

Just a thought but at age 59 you are going to live for a long time ask them if it possible to take the pension in a different form i.e. no guarantee period, a 100% widows/ers pension, no escalation etc...

Get them to quote you the different ways in which you can take the pension and make a decision it might give you the pension that you prefer rather than the one they want to give you and still get the good annuity rates they are offering you.

dwileflunker

I'll try. Nothing ventured and all that. Thanks.