Storing pensions

maddens

In a few months time I will reach pension age.

I am not intending to give up work immediately, I will probably carry on working for a couple of years.
I have read that I can defer payment and receive a lump sum later, when I do give up work.

Would this be a good option or would it be better to take the pension and put it into some sort of saving scheme until I give up work.

dunstonh

What type of pension is it that you are looking to defer? Options will be different with the different types.

maddens

State pension

Lokolo

https://www.gov.uk/deferring-state-pension/what-you-may-get

This should be of use to you.

Mojisola

Also - https://www.moneysavingexpert.com/savings/state-pensions#delay

kidmugsy

The lump sum deal with state pensions isn't particularly good, though I suppose it pays the equivalent of interest that's better than most savings accounts at the mo'. On the other hand, if it means you avoid paying tax on the money then that would make it much more attractive. That'll depend on your total taxable income in the year you draw the lump sum.

If you expect to live a normal life span the extra pension will probably be a better deal. (That's assuming that future governments honour the promise.) It's equivalent to buying an inflation-linked annuity that pays 10.4% p.a., which is far higher than market rates.