Lump sum advice.

jamesd

The talk of savings makes it clear that it's likely that taking the lump sum is likely to be better even for an extremely cautious investor. Investing instead of saving makes it likely that the lump sum will do significantly better than the pension, so taking and investing the lump sum looks like the better of the two options.

agent_orange_2

Thanks to all for the interesting and informative help given.

Looking at the balance of discussion, I feel inclined towards taking the lump sum.
I must say, when I saw the pension paperwork, I was pretty amazed at my 'pension pot' figures. I have never really been one for studying annual pension reports.

A few details on my personal situation , financially speaking.
I received a medical serverance payment which my wife and I have earmarked for a few home improvements and a Holiday. Our mortgage was paid off on May 1st (I had been overpaying on a flexible mortage) and we have ended up with 30K from the endowment, which we intend to invest as well. We have about 6k sitting in the icici bank (savings). My wife has a new job and when we take the mortgage and a loan repayment figure out of our monthly expenditure - we should be ok not having to use investment income.
I am currently not working and will have 'medical limitations' in the world of work but hopefully will have some scope for work in a lighter duties type environment.
I have 3 children in full time education - the two eldest, 17 and 15, look university bound and the third is only 5.

I also have an avc fund of £13,236 and the provisional figures for this are

Full fund = £680 p.a. - single life, non increasing
75% fund = £500 p.a. - single life, non increasing

So a lump sum available of £3.309 at a cost of £180 pounds p.a.

Does the fact that the avc pension doesn't increase annually make the lump sum option more attractive.

Sorry for the long winded message and thanks in advance for any help.