To commute from small pension?

Coastdweller

I retire in late April and will receive a small pension from my local government post.

My options are: to take a pension of £4442.75 per annum with a Fixed Pension Lump sum of £10062.99 or to take a reduced annual pension of £3395.14 and a larger FPLS of £22634.28.

I am just coming up to 63, in reasonable health but of course the unknown quantity is: when I will die?

My gut feeling is to take the first option and put the difference between the two annual options into my cash ISA as I don't currently need it to live on, though in a couple of years time when my partner retires I probably will need it.

Is there any other alternative that seems logical? Any thoughts would be welcomed.

Thank you.

atush

If you don't desperately Need the extra LS, it is generally considered best to take the Higher pension as the commutation rate is poor.

The exceptions could be if you were in poor health and had no spouse.

But as you are 63, why are you getting your pension now? Will it be actuarily reduced for taking it before 65?

kidmugsy

Coastdweller wrote: »

I retire in late April and will receive a small pension from my local government post.

My options are: to take a pension of £4442.75 per annum with a Fixed Pension Lump sum of £10062.99 or to take a reduced annual pension of £3395.14 and a larger FPLS of £22634.28.

(i) Do you have any other taxable income?
(ii) What size of State Retirement Pension can you expect?


UPDATE: ah, don't bother. The cost to you of the bigger lump sum is far too high. Take the bigger pension.

Coastdweller

Thank you, atush and kidmugsy.

I'm retiring on ill-health grounds, but with full pension. Despite this I am quite healthy and my condition is not life-shortening or threatening, just inconvenient. A complicated situation .

Thrugelmir

The higher pension will benefit from index linking over the years. Something which will become noticable over 20 years in retirement.