still wittering on

kenb2

Sorry to keep on,
re my post further down,
pension worth 12k plus to cash in, need money, unemployed and 60 with little prospects.
3 options
#1 take tax free lump sum, and get £70 per month
#2 take the lot as one lump sun, about 9.5k and pay tax, on which opinion is divided if I can get any of it back if I could get any.
#3 leave it in the Pru and keep on struggling and skint till 65
What does the team think? all advice appreciated

EdInvestor

If you cash it in and reclaim the tax, you can then invest it @6%, again paying no tax and will get 60 quid a month, plus all the capital.

12k in hand and income of 60 quid a month, vs 3k in hand and income of 70 quid a month is no contest IMHO.

In addition, if you want a guaranteed income you can use the money once liberated to buy a "purchase life annuity" which will give you a higher income per month because it has different tax treatment.

https://www.hmrc.gov.uk should be able to confirm you can reclaim all the tax.

Garnet_Gem

Take the tax free lump sum. It's better to have control of your own money (if you're disciplined enough to manage it).

dunstonh

If you take the whole lot will it reduce your pension credit allowance down?

EdInvestor

dunstonh wrote: »

If you take the whole lot will it reduce your pension credit allowance down?

If it did (but this won't one gather apply for 5 years) then of course the capital can be spent, something you can't do with a pension.

kenb2

Thanks edinvestor, sort of notion I was hoping for, my instinct is to take the lot, reinvesting a bit of it makes sense