siamesechris

christine_cook

I am a 70 year old married female. I have a state pension of £85 a week. I am now finally retiring on a 2nd pension of either £1970 Lump sum and £1787 per annum, or £8363 lump sum and £1254 per year, or I have an option of something in between those figures. I have £10,000 in savings and no mortgage. Can anyone advise me please?

westv

What is siamesechris?

Silvertabby

That's a commutation rate of 1:12, which is pretty poor. (Public sector?)

Do you have a need for the extra cash?

P.S. siamesechris should be your profile name - not always a good idea to to use your full real name as your profile (public) name.

What is siamesechris? posted by westv

My bet is that OP's name is Chris, and that she likes siamese cats.

westv

westv wrote: »

What is siamesechris?

Silvertabby wrote: »

My bet is that OP's name is Chris, and that she likes siamese cats.

Oh yes.


....

dunstonh

It certainly wins the interesting title of the week award.

kidmugsy

Unless you have objective reason to expect a short life the bigger pension looks the better value.

By the way, since you have the old-style state pension probably a particularly good investment would be to suspend it ("defer" it is the jargon) for a couple of years and live off some other money. If your husband has any spare cash this might be the best investment he could find for it.

The reward is an extra 10.4% on your pension for every year of "deferral". There is no better value inflation-protected income available.

Another way to look at it is to ignore any spare money that there might be in the family, and to look at it entirely from your own point of view. Say that if you took the bigger lump sum and lived off that for a couple of years, then your reward as extra state pension would be about £880 p.a. Add that to the £1254 p.a. and you get about £2100 p.a., plus a bit of surplus cash from those two years. That would leave you better off than taking the smaller lump sum and the bigger pension.

xylophone

I make the commutation factor about 1: 15.7 - not brilliant but better than 1:12.

The OP is nearly 70 - she could well live the sixteen or so years that would bring her to the breakeven point.


However, I think that in her situation, I would consider deferring the state pension for a couple of years and taking the higher lump sum.

The OP might initially deposit the cash in a savings account at the highest rate she can get and draw out an amount weekly to replace the state pension.

It seems that her income is likely to be well below her personal allowance - if so, she might wish to consider opening a SIPP with HL and contributing up to the maximum until she is 75.

This could gain her a free £720 a year for up to five years.

https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired

Silvertabby

xylophone wrote: »

I make the commutation factor about 1: 15.7 - not brilliant but better than 1:12.

The OP is nearly 70 - she could well live the sixteen or so years that would bring her to the breakeven point.


However, I think that in her situation, I would consider deferring the state pension for a couple of years and taking the higher lump sum.

The OP might initially deposit the cash in a savings account at the highest rate she can get and draw out an amount weekly to replace the state pension.

It seems that her income is likely to be well below her personal allowance - if so, she might wish to consider opening a SIPP with HL and contributing up to the maximum until she is 75.

This could gain her a free £720 a year for up to five years.

https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired

£1,787 - £1,254 = £533

£533 x 12 = £6,396

£6,396 + £1,970 = £8,366

(suspect the difference is because OP has given round pounds instead of pounds and pence).

Mnd

Or she has a conjoined sister

Peelerfart

Silvertabby wrote: »

P.S. not always a good idea to to use your full real name as your profile (public).

I do, honest :-)

christine_cook

siamesechris

I am almost 70 and have a state pension of £85. Having now finally retired, I have also got a 2nd pension offered of £1970 lump sum and £1787 per year....or a Lump sum of £8363 and £1254 per year, and £10.000 in savings.my pension increases with the cost of living. I have the usual old age complaints...Arthititis..asthma...Plantar Fasciitis bad back etc. Can anyone advise please?