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where to take lump sum from
Samelsie
Posts: 6 Forumite
I need around £40000 for house repair and improvement. I am retiring soon and I have a defined benefit pension that I could take £40000 ish tax free lump sum from with a reduced inflation linked pension. I also have a money purchase pension pot from which I could take about £40000 tax free. How do I choose which pension to take the funds from?
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Comments
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What happens to the annual benefit of the DB pension if you take the lump sum ?
Whats the current size of your DC pension ?0 -
How do I choose which pension to take the funds from?
Do an analysis of both and decide which one is the best based on the terms and conditions of both. e.g. penalty/cost for early commencement for example.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
DC pension goes down by £3300 per annum. DC pot is £170000 and i am not yet taking anything from it.0
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DB pension goes down I take it you meant ?
Anyway take it from DC because its a very low multiple of 12* to take from DB so not a good return, and also the higher DB by leaving that untouched will act as a guaranteed backstop to an uncertain return from the DC
* eg in 12 years time you are losing out. Not counting tax treatment.0 -
DC pension goes down by £3300 per annum.
DB? - Do you have to take a lump sum?0 -
no , it is an option0
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Would you be better off taking no lump sum from your DB pension to benefit as much as possible from inflation linking?0
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