Pension lump sum v monthly pension

Bigmoney2

Also remember that they quote the max lump sum you can take tax free.
You can take a lump sum below this max (with the appropriate commutation of pension) such as 10k.

YorkshirePudding6

Thanks for all your answers - will be making the decision over the weekend and will probably go for the bigger weekly pensions.

property.advert

In theory you could also take out a short term life assurance product to cover the period of time where the extra income still falls short of the lump sum payment available.

Frozen_up_north

Don't forget to factor in savings for future purchases such as replacement cars, financial help for your son etc. Other factors to consider are the impact of savings on future benefit payments, the boost from receiving a state pension later in life and your share of any inheritance that may come your way.

I opted for maximum pension on retirement but still had a decent lump sum too, as not all of it could be taken as pension.

jackyann

Have I missed something? 2 factors to consider:
Inflation: Is pension index-linked?
What will you do with lump sum? Can you afford to put some of it away in tax-free savings like ISAs / NS&I ?

YorkshirePudding6

The pension will increase with the Retail Price index. We were thinking of taking the higher pension and trying to put some of it away so hopefully in 10 years we would have saved the lump sum we could of orginally taken and then use thismoney for new car/finacial help for our son. We do currently have £25,000 in savings so no real need for any lump sum and really can't be bothered with trying to find the best isa/savings accounts for a lump sum. Considering my husband could live for another 30 years it does seem sensible for us to the take the higher pension amount over the period of time instead of a lump sum that we have to keep moving around to gain interest!

Thanks again for all responses

jackyann

can I point out a couple of thing? There are some good savings rates for "regular savers" so if you can commit to putting a certain amount away each month, you may find some good rates.
Also, you may not feel too much like trawling around for good rates now, but this site makes it very easy; so when your husband has retired and feels better, he may find it a nice little hobby (I do!!)

YorkshirePudding6

Thanks jackyann, think you've hit the nail on the head! Hopefully after the operation and when my husband is feeling better he may then want to look at good savings rates. Obviously we have to make this decision first, so going to go for higher weekly pension and then commit to saving a regular amount and then once husband is better start looking around for the best rates.