Royal London S2P 25% lump sum?

jenny_123_3

Hi I am 55 next year and decided to look at my pension illustration! reading it I understood I could get 25%of the fund when I am 55 (approx. £4,000). After I had spent it in my mind Hmm I thought sounds too good to be true. I rang the company and they told me it is 25% of the annuity which would be £125 Ha Ha Does any one know if this is the case? What about if I transferred the total fund would I get any benefits?

dunstonh

I understood I could get 25%of the fund when I am 55 (approx. £4,000).

Yes. However, it is rarely a good idea at 55.

I rang the company and they told me it is 25% of the annuity which would be £125 Ha Ha Does any one know if this is the case?

A low annuity rate is one of the consequences of not buying your pension annuity at retirement but 10-13 years earlier.

What about if I transferred the total fund would I get any benefits?

You may squeeze a fractionally higher annuity rate but you are going to hit the problem that you are right on the mark of minimum premium of many providers and any difference is likely to be small from those willing to quote.

Have you considered using your pension for retirement provision as planned rather than take it now?

jem16

jenny_123 wrote: »

After I had spent it in my mind Hmm I thought sounds too good to be true. I rang the company and they told me it is 25% of the annuity which would be £125 Ha Ha Does any one know if this is the case?

Can you clarify what you mean here?

The 25% tax free lump sum is taken from the total fund as you said earlier. If your pot is £16k then yes you would get £4k.

If I'm reading you correctly, you are saying that the company told you it would be £125 which is 25% of the annuity. I'm assuming the annuity you have been quoted is £500pa. If this is what you are saying then either the company have told you a load of rubbish or you have misunderstood.

Apart from all that, age 55 is really too early to take an annuity.

jenny_123_3

As I said it seems it is worth only around £600 a year as its the result of opting out of Serps I was a student for 3 years and probably have not paid much in. I didn't really think about what it was worth etc until I read my last statement. The thought of getting a lump sum was good, as £50 a month probably won't make much difference to my life.

jenny_123_3

Yes that is what they said do you think that it correct?

dunstonh

The thought of getting a lump sum was good, as £50 a month probably won't make much difference to my life.

What would you spend the lump sum on?
What would the income be at normal retirement age?
Do you have other pensions?

jem16

jenny_123 wrote: »

Yes that is what they said do you think that it correct?

If you are saying that the annuity is £600 per year and you were told that the tax free lump sum is 25% of £600 then no it's not correct.

jenny_123_3

Yes sorry she quoted me £500 today and I was being optimistic that age 60 it might be £600.

jem16

jenny_123 wrote: »

Yes sorry she quoted me £500 today and I was being optimistic that age 60 it might be £600.

Your lump sum is based on the total pot. I'm assuming this is £16k so you would have £4k as a lump sum and £500pa as an annuity.

Is this your only pension?

jenny_123_3

dunstonh wrote: »

What would you spend the lump sum on?
What would the income be at normal retirement age?
Do you have other pensions?

Soft furnishings, holiday. I know I am a live for today person

Income not much more at 60 and I probably will be still working at 70 (health permitting)

No other pensions just starting one with work

jenny_123_3

jem16 wrote: »

Your lump sum is based on the total pot. I'm assuming this is £16k so you would have £4k as a lump sum and £500pa as an annuity.

Is this your only pension?

Why do you think she said 25%of the annuity could it vary for different policies. Yes its my only pension but will be paying one through my employer