Flat rate or RPI???

N1AK

RPI linked pensions are a way to protect against high inflation or living well beyond the average life expectancy. If you are already comfortably off then generally a fixed income would make more sense (or drawdown) because your other assets are likely to be relatively inflation proof and your 'worst case' if you live longer is that you have to use more of the assets you were expecting to leave as inheritance.

I honestly don't know what makes sense for people with less savings. In some ways a higher initial income may make more sense, knowing you will have to fall back on the state if you get lucky and live longer (mainly because they probably couldn't support themselves properly on an RPI pension forever regardless).

cyclonebri1

And that is what has to be factored in in this case. Without going into detail the person in question has a tough number of years before state retirement age, isn't in the peak of health/condition.
It is a short term view that is being taken, he may just be ok later.


As total aside to this, I retired 5 years ago at 55 after an accident that meant I could no longer work. My saving were ok, my debt absolutely non existent.

Great you may say, but 5 years on my ability to fulfil my plans in retirement are scuppered, not financially but by my physical ability. I need little income, even at 60.

Compromise rules as always