Seaman's Pensions part II

Stolt_2

Back in January I sought some information about UK tax regs regarding a US$ “lump Sum”. The fine wise words from this site assisted no-end.
Today I have another issue and probable not such a bad dilemma to have.
I have an occupational pension (merchant navy officer pension fund) due end this year, 61st birthday. I contributed to this fund from 1973 until 1996.
I recently asked the fund for a retirement statement, the following figs received:-
Pension per year £27,200
Dependants pension (my dear wife of 39 years) on death receives £13500’ish
Or
Cash lump sum £115,000 with reduced pension £17,250
No change to the dependant’s pension on death £13500 ‘ish.
I have alternative options available if required, such as a lower lump sum higher pension.
So here is the dilemma:-
I’m still in full time employment and don’t particularly want to stop working come the end of the year as it’s a shore based position i have help for 10 years and closely related to the shipping industry which I have been association with for over 44 years, issue here is I’m in a 40% tax bracket with my current salary, add my pension on top and it sounds pretty serious out goings to the Tax Man.
I am just a simple Yorkshire lad who drove ships around the globe for a living, there’s now’t flash in it, and that why I’m stumped with what action to take in 9 months time.
Question is what to do come December,

Take the pension

Take a lump sum and lower pension

Defer the Pension

Pack in work
Go to pub and forget it till Monday :beer:

Lokolo

Honestly - it's your life, you know whats best. Not us mongrels

Personally, if I could afford to live off that amount, I would retire now, and life the rest of my life to the fullest.

kidmugsy

You could, if it suited you, draw the pension and avoid some/all higher rate tax by contributing to (say) a personal pension - you'd be allowed to contribute up to £50k per annum (or less, if pension contributions are being made for your present job). The idea would be to draw down pension income when you finally retire, when it would be exposed (presumably) to standard rate tax . Or you might choose to leave it invested so that your wife can use it for extra pension after your death: if she's otherwise going to be short of pension, it might be neat for you to avoid 40% tax and for her eventually to pay whatever the standard rate then is. (20%? 25%? 30%?)