Taken Pension at 55

scarletboy

I am 55 years old and have paid a company pension from 1983 to 2004, when the pension was scrapped and then frozen, with the company paying the shortfall until 2015.
I have asked for an illustration, which I received this week. The reason for asking for an illustration is there could be a possibility of losing my job after 36yrs, due to falling orders etc.
My pension value is approx. £61,000

I have been offered the following;
£3060 per year
Or
A lump sum of £15,300 and 32292 per year.

The question being do I take the early sum's above and invest in ISA'S etc., or do I sit tight and wait until I retire at 65/66?
What would the situation be, if I do become unemployed, would the above figure be classed as income, when applying for benefits?

Lokolo

I wouldn't rely on benefits, they could be stopped at any point.

If you need the lump sum, then take it, but if you don't, take the extra income.

CLAPTON

scarletboy wrote: »

I am 55 years old and have paid a company pension from 1983 to 2004, when the pension was scrapped and then frozen, with the company paying the shortfall until 2015.
I have asked for an illustration, which I received this week. The reason for asking for an illustration is there could be a possibility of losing my job after 36yrs, due to falling orders etc.
My pension value is approx. £61,000

I have been offered the following;
£3060 per year
Or
A lump sum of £15,300 and 32292 per year.

The question being do I take the early sum's above and invest in ISA'S etc., or do I sit tight and wait until I retire at 65/66?
What would the situation be, if I do become unemployed, would the above figure be classed as income, when applying for benefits?

this makes no sense what so ever

Lokolo

CLAPTON wrote: »

this makes no sense what so ever

I think the 3 is meant to be a £ (shift + 3), so taking £2292 if taking the tax free sum.

CLAPTON

why speculate when you can know?

Loughton_Monkey

I find the concept of taking your pension due to the "possibility" of losing your job rather rash. It would ensure that every penny of it is taxable, and as you imply could affect any benefits entitlement if the worst happened. So I cannot see a single reason to take it now, and every reason on this earth to leave well alone.

A pension that has not yet been taken is not counted for benefit purposes.

dunstonh

The question being do I take the early sum's above and invest in ISA'S etc., or do I sit tight and wait until I retire at 65/66?

You say the pension is frozen. That indicates an old defined benefit scheme. If it has funding issues then chances are the trustees are not too favourable on waiving penalties on early commencement. You havent mentioned cost of early commencement. Without it no-one can offer any opinion.

I am also not sure what taking it to put the money into ISAs would benefit compared to leaving it where it is. Again, no figures to compare.

What would the situation be, if I do become unemployed, would the above figure be classed as income, when applying for benefits?

Yes if you are taking the income. No if you have not.

scarletboy

Thanks for all you advice, I shall now think again and wait until at least 60 or at retirementat 65/66