Payment time for lump sum deferred state pension

Broadsword

I have deferred the state pension and elected for the lump sum. I have completed the forms for payment now to be made. I know this will be subject to tax, so a calculation has to be made.

How long does processing take and when is payment likely to be made? I returned the paperwork over a month ago and was hoping for early payment.

greenglide

It shouldnt take long at all.

Have they started paying the pension and just have the lump sum to pay?

You could ring them up to ask?

Out of interest, why are you taking the lump sum rather than the increments on the pension which are in most cases the better deal financially?

atush

indeed, why not take the higher income for life?

Broadsword

Thank you for your replies and sound thinking.

I have recently started to receive the state pension and only the deferred lump sum amount, the reason for my question, now remains outstanding.

I have read the collective wisdom about lifespan and expected benefit from an enhanced weekly pension. Some observers suggest somewhere between 10-18 years longevity is needed and easily achievable for so many. I should be so lucky and many will gamble on continued good health but the future does not offer guarantees.

Unfortunately for me the maths is rather easier A recently diagnosed brain tumour ( unfortunately a Grade 4 glioblastoma ) gives me a 50/50 chance, at best, at 18 months and possibly 25% at 3 years and 10% at 5 years. Of course miracles, and survivors happen and I work to be one of them, by surgery, chemotherapy and radiotherapy.

Any shrewd observer, with those numbers, might agree that taking the money is undoubtedly the better option. Even after tax it will be £20k plus, so not a sum of money to gamble my survival upon, when I can better provide for my family.

kidmugsy

Broadsword wrote: »

Any shrewd observer, with those numbers, might agree that taking the money is undoubtedly the better option. Even after tax it will be £20k plus, so not a sum of money to gamble my survival upon, when I can better provide for my family.

You may well be right; best wishes for your future.

But note that the Extra Pension can be inherited by your widow: in our case I expect my widow to inherit 90% of mine. The proportion depends on how much of your pension is basic Pension, how much Additional Pension. My wife's likely to live long enough that the Extra Pension is better value than the lump sum.

atush

Sorry for your diagnosis and best of luck.

But you can see how pertinent information not disclosed can affect any suggestions and information you receive (such as your wife being able to inherit your increase)