Taking final salary pension

ceejayblue

I'm retiring early at the end of June and am in a final salary pension. I've been offered a lump sum of £16000 and approximate £2600 pa pension. I have flicked through Martin's Annuity guide that says something about final salary pensions not being suitable for annunities. Can anyone clarify this for me as I really do want to try and get the best out of my pension.

Thanks

dunstonh

open market option is for money purchase schemes. Whilst it can theoretically be used for final salary schemes (as transfer with immediate commencement) you wouldnt do it as the terms could rarely, if ever match what you get.

Loughton_Monkey

Your £2,600 IS an annuity. A guaranteed contractual amount paid by your scheme. There is no concept of 'shopping around' for a better annuity rate. That only applies to 'money purchase' schemes.

Final Salary schemes should simply be 'taken'. The only decision, usually, is whether or not to take the tax free lump sum or to take the increased pension.

bigfreddiel

Loughton_Monkey wrote: »

Your £2,600 IS an annuity. A guaranteed contractual amount paid by your scheme. There is no concept of 'shopping around' for a better annuity rate. That only applies to 'money purchase' schemes.

Final Salary schemes should simply be 'taken'. The only decision, usually, is whether or not to take the tax free lump sum or to take the increased pension.

usually commuting a lump sum back into pension its at such an onerous rate its not worth it - take the lump sum - its tax free as well - stick it an ILSC or ISA - spend the equivalent interest from other savings earning a lower rate

ceejayblue

Thanks everyone, that's what I thought but someone at work was saying about annuities from other providers being a better deal. Now I know I've made the right decision and will be taking the lump sum.