Confused

cookinginacamper

So , being made redundant and I can get my llocal government pension with their contributions. Various options but would you:- take largest lump sum plus smaller annual pension or smaller lump sum and larger annual pension. Lump sum is tax free and annual is taxed.

NoMore

Its difficult to know without figures and more information, how much do you need to live on, do you have any large debts etc.


Usually taking a smaller lump sum and higher annual payment is better overall but conversely usually people go the other way and get max lump sum and lower annual. Psychologically people like getting the money early I guess.

IanSt

Impossible to answer without a lot of additional information from you, but if it were me then I'd be looking to get the maximum amount of annual pension. That will receive inflation proofing and you could need that income for the next 30 to 40 years if not even more. That's worth a lot more to me than a one off larger lump sum which is unlikely to compensate for the permanent loss of income.

However you may have need of that larger lump sum and be willing to sacrifice the benefit of having that larger annual income. But I'd want to be very sure that there was no other choice but of reducing the pension income.

MallyGirl

annual is taxed but the first £12.5k will be at zero rate tax and you will pay 20% on anything above that (no NI on pension income).
Do you need the lump sum - debts, outstanding mortgage? Can you live on the smaller pension until whatever state pension you have built up then kicks in.

have you checked your state pension forecast.