Early Retirement and income

Linton

If you have no over-riding desire for the £70K to be passed on after your demise and especially if your ill-health is life-shortening perhaps an annuity arranged through an IFA would best meet your needs. This would give you and optionally your wife a completely secure guaranteed income for the rest of your lives and a much higher one than for example by your living off bank interest. Also, the tax take would be significantly lower.

Off course the downside would be that you lose the lump sum.

Rodders53

Where is this lump sum coming from? Does it reduce the pension being paid to you? Are you compelled to take it (all)?

When I retired early (aged 53) I aimed to maximise my income from the pension scheme and used some of my redundancy money to buy as much as I could.

Certainly take a big enough lump to pay off debts such as mortgage and car, but - unless your life-expectancy is short (and a partner's pension is not reduced by the lump sum) - don't take more than you need as a 'rainy day' reserve rather than take it as income.

My pension in payment increases in line with RPI so that helps, but even CPI is better than most cash savings accounts can manage.

atush

Also having twin daughters who have both been through University has left the savings as really pennies in the bottom of the pot.

I know the feeling, I have twins starting this September. Unfortunately tuition has risen with little time to plan for me- in the case of my son's Law degree at Warwick, they just raised the tuition another 5K.

But I do agree with Rodder that if you dont' have to take all that lump sum (but enough for house car plus an emergency pot) you might be better off having less LS and more pension.

If not, you might consider DD for your 70K. That way you can draw an income but your wife can inherit 100% of the pot for her pension.

kidmugsy

Could it be worthwhile to make a maximum permitted contribution to a private pension in this tax year, and then use it to buy an ill-health pension annuity when you turn 55?

xylophone

The OP has secure income of £20000 per annum - I wonder would it be worth his while to consider a SIPP?