3 pensions, not much of a clue what to do

Albermarle

See, this is where my head gets a bit befuddled, if I take it at 59, using the higher lump sum figures from each example in my original post, I get a yearly pension of £6215.62 against £6496.34, an increase of £280.73 if I wait til 60. In the lump sum, it would increase from £41437.42 to 43308.95 (£1871.53) if I waited til 60. But, by not taking it at 59, I lose a year of pension income of £6215.61.. 

By taking the pension one year early , you will lose 4.3% of the pension and lump sum, This % is pretty typical .

A 59 year old female will live on average until around 85 . So if you have average life expectancy then you will have 26 years of being paid £280.73 a year less than you would have been had you waited until 60 . If you multiply 26 X £280.73 = £7,298.98 you will have lost out , compared to the one year lost income of £6215.61.

So in reality there is not a lot in it either way 

Although f you were to live longer than average this gap would get bigger ( so more in favour of leaving it until 60)

Bunny58

Thanks Albermarle, now I need to think is it better to have the bigger lump sum, from the main DB, the smaller lump sum or no lump sum and a larger pension..

Bunny

DT2001

Have you worked out how much you need/want when you retire?
As you are risk averse if you need to top up your pensions from savings is it better to maximise pensions?
Will the amount of your mortgage payments cover what you want to help your child with? If so you just need to find 2 years money from other sources, maybe your rainy day fund?
You can then decide when to take your pensions based on your own retirement requirements. 
When you get to 62 you’ll be able to save into ISA’s the mortgage money/uni funding and pension payments to build up your rainy day fund.
plenty of options to ponder

Bunny58

Thanks so much DT2001. Yes I need to think how much I need myself, after 60 I won't have the mortgage and life insurance payments and my travel to work expenses will be a lot less with my over 60 pass.. and after the first year of Uni at least I will have an idea of how much that's going to be moving forward 😁 

MallyGirl

We are factoring in not retiring till DD finishes uni or is in her final year if she gets on the 6 year course). We simply have no idea how much financial support she is going to need. We know she will get the minimum maintenance loan so our starting point is to top that up to the maximum she could get if we were low earners. Whether that is enough remains to be seen - she has to do a lot of placements in the holidays which are unpaid, may incur travel or accommodation costs and make it difficult for her to find paid holiday work. I guess we will have a clearer idea once she is a couple of years in.

Albermarle

It worked out quite simple for me . She got the minimum  maintenance grant, and I paid for accommodation - no more, no less and that seemed to work out well. Halls of Residence for first year - £5.5K ; Year in typical student shared house in low cost area - £3.5K; Final year in better quality shared flat - £4.5K . You could maybe use these figures as rules of thumb ?

MallyGirl

Thanks - I was not that disappointed when she didn't get an offer from RVC which had hall fees of £10,800 self catering