Deferring State Pension - does it pay higher interest than ISA's

GillyFlower

I need to work out what are the next steps I should take. I find it rather confusing when I read the options and then I think of a 'bird in the hand is worth two in the bush'. I have deferred since 2005 and if I wait until July 2007 that is 2 years worth. I deferred because I was still paying a lot of tax - now it has come to an end and I have no other pension fund only savings.

Let us say I have a possibility of seasonal work which will bring in 4 k income this year.

So if I do start drawing my pension does anyone have any advice on options that seems open to me -

For example -

1. Take Cash Lump Sum and then draw my pension (I only have 29 qualifying years)

2. To keep a Cash Lump Sum attracting interest - pension deferred from July 2005 and still is being held.

3.Maybe even using an ISA for cash because is it possible the ISA may not pay as much interest as Pension Deferral- has anyone done this calculation?

4. When I decide to draw pension, say for example in July 2007, I could have funds accumulated over two years converted into additional payments spread out over the weeky pension.

I hope this makes sense - any thoughts would be welcome.