Best way to draw down 30k pension pot

facetious

What, in the opinion of the experts, would be the best way of obtaining my full pension pot?

I am an Irish citizen, 66 years old and single, no family and resident in the Republic of Ireland. My pension pot is made up of some 9,000 pounds in one fund and 21,000 pounds in another fund.

I was diagnosed with Multiple Myeloma (Cancer of the bone marrow) just over 2 years ago. I have had medication, chemo and finally a bone marrow transplant just over a year ago and I am now in full remission. The estimated life span after a bone marrow transplant is about 6 years (these transplants are not normally performed after the age of 66 years).

I have a total pension pot of about 30,000 sterling. If I cash it in, that will give me a lump sum of some 7,500 pounds plus a yearly annuity payment of about 1,250 pounds. Thus, if I survive the 6 years, I will have received around 15,000 pounds (lump sum + 6 years @ 1,259 pounds) and the remainder, about another 15,000 pounds I will never receive. What a waste of something that I have paid into and cannot make use of - who gets the remainder when I die?

Even if I keep the full fund until I can be classed as "terminally ill" - i.e. I have less than 6 months to live, I will probably be in such a state that I will not be able to use it for anything that I would like to do - e.g. world cruise (as with such a medical condition, I would not be accepted on any kind of cruise).

I also have an Irish state pension which covers all my day to day living expenses as I have my own small house and no mortgage. To be honest, if I had my life again, I would never invest in a private pension plan as it seems so difficult to get what is mine.

atush

The problem is, that pensions aren't made with one person in mind, but thousands/millions. And possibly you could have taken your entire pension when you were first diagnosed as your LE was probably not great. Now in remission you can't.

But there are a few things you could look at. Enhanced annuity as you had cancer might give you a better rate and you could buy a guaranteed payment period. Or you can try to find a company that does smaller pots into Drawdown.

Or you can take your 25% tax free, then leave the rest invested and not buy an annuity. If your cancer returns (god forbid) you could see about gaining access to the whole thing.

Or, as you are not resident in the UK for tax purposes you could look into QROPS.

Lewey_78

Is this a UK pension arrangement? Assuming it is then you can nominate beneficiaries to receive the value of the scheme should you die before drawing the benefits.

If you purchase the annuity you can opt for a Guaranteed period (5 or 10 years) or opt for Value Protection., and this potentially provide some value to your beneficiaries.

You should also look to arrange the annuity with a specialist provider on enhanced terms, but in my experience this can prove difficult if you not living in the UK at the time you apply for the annuity.