State Pension Advice, Take or not to take??

nige4554

My dad is 70 years and still working, he deferred his state pension, govt has now sent him a letter to say he has to make a decision to take his pension.
He wants to make sure mum is ok in case anything happens to him so looking at taking the lump sum?. Which is the best way to take the pension paying least tax. He earns £30k per year in his job, They also offer him to take next April.

pension pot is 53,600 Lump sum
Weekly payment £300.44 if he doesn't take the lump sum.
Currently getting £191.12 a week

They have been scammed by insurance brokers in the past and shy to speak. can you advise what would be the best option
many thanks

atush

I would take the increased pension over the lump sum. AS most of that extra 110 a month will be inherited by your mum should he die.

So call DWP and check how mucc of the overage is inheritable?

Also, he could contribute to a personal pension out of his current earned income. The pot can be inherited by your mother should he die.

sleepless_saver

If he's deferred the state pension and is getting £30k a year from work, where does the £191 a week come from?

If his current income is £191 per week so that he is currently paying no income tax, then he would pay no tax on the lump sum. If he is paying basic rate income tax the lump sum would be charged at basic rate.

But he should check with the Pension Service if he has to make a decision about the deferral at age 70 if he doesn't want to. I can see no time limit in the relevant guidance and the Which website says there is no limit.

kidmugsy

sleepless_saver wrote: »

But he should check with the Pension Service if he has to make a decision about the deferral at age 70 if he doesn't want to. I can see no time limit in the relevant guidance and the Which website says there is no limit.

Agreed.

Is the OP's mother making pension contributions? Or could she consider deferring her State Pension too? Both could be profitable policies, depending on her circumstances.

brewerdave

nige4554 wrote: »

My dad is 70 years and still working, he deferred his state pension, govt has now sent him a letter to say he has to make a decision to take his pension.

...bit worrying this -has some faceless civil servant suddenly realised just how many people are deferring -and how much the future liability is ??:rotfl:
I've jusr re-read the guidance notes on deferral and as already stated nowhere does it say that there is an upper limit on deferral altho' the example tables only go up to 5 years.