LGPS - Monthly Income?

FredTheFifth

I've been given a quote stating my annual pension / lump sum. How do I calculate my monthly income from the annual pension please? Can I just use a basic salary calculator on the internet? I am 62.

CherubP

Can't post links yet but try the salarycalculator.co.uk

make sure you tick the no NI box.

dunstonh

Remember that not taking the lump sum can be the best option now in most cases. So, compare with and without lump sum too. Or some lump sum but not all of it.

We hardly do anyone taking 25% up front anymore.

xylophone

Remember that not taking the lump sum can be the best option now in most cases. So, compare with and without lump sum too. Or some lump sum but not all of it.

We hardly do anyone taking 25% up front anymore.

It is LGPS - there might be an automatic lump sum with no inverse commutation.

xylophone

How do I calculate my monthly income from the annual pension please?

Divide by 12 and deduct tax payable (if appropriate)?

There is no NI payable on a pension.

Silvertabby

“ Remember that not taking the lump sum can be the best option now in most cases. So, compare with and without lump sum too. Or some lump sum but not all of it.

We hardly do anyone taking 25% up front anymore.

”

It is LGPS - there might be an automatic lump sum with no inverse commutation.

Automatic lump sum only applies to pre 2008 service.

There are a tiny number of people who qualifed for (and who then actively opted for) the inverse commutation option.

Unless things have changed in the year or so since I retired, about 90% of LGPS pensioners opt for the full 25% tax free lump sum, despite the poor commutation rate of 1:12.

dunstonh

xylophone wrote: »

It is LGPS - there might be an automatic lump sum with no inverse commutation.

I read the post, not the title!

However, it can still apply with poor commutation factors as mentioned above.

FredTheFifth

Thanks for the replies. It is LGPS and if it happens I am likely to go for the max lump sum I think.

dunstonh

FredTheFifth wrote: »

Thanks for the replies. It is LGPS and if it happens I am likely to go for the max lump sum I think.

Why? what are you going to do with that lump sum?

If its all going to be immediately spent then that can be a valid reason. If you are just going to stick it in a bank account then not taking the lump sum can be much better due to the early breakeven point. There are other influences as well but too many take the lump sum when they shouldn't.

FredTheFifth

Well as I understand it the lump sum is tax free. For reasons that I'm not going into here my wife's pension will be small. The widows element of my pension is small and though I am in good health, if something did happen to me she would probably have to sell the house. i have calculated the break even point to be 15 years.

What would I do with the lump sum - dunno but it wouldn't be spent, so invested.

hyubh

FredTheFifth wrote: »

The widows element of my pension is small

Surely, it's pretty standard, as DB goes? Also the benefit that it is unaffected by how much pension you commute for lump sum (which is not overly standard, as DB in general - private as well as public sector - goes).

What would I do with the lump sum - dunno but it wouldn't be spent, so invested.

Doesn't sound a great reason to commute at 12:1 to be honest.