Defined Benefit pension Lump Sum and tax

Albermarle

drummersdale said:

Secret2ndAccount said:

If you are only a 20% taxpayer in retirement, the 12:1 commutation is a bad deal, and one which many people jump for because it's a once in a lifetime chance to receive such a large sum. You should take the smallest lump sum you can live with, and look forward to the annual payout for the rest of your life. The considerations above still apply, but the scales are tipped 20% further towards leaving the money in your pension.

Thanks very much for the response - I suppose it comes back to the "Jam today or tomorrow" argument which is a common theme on this forum - 85 may be the average but I know very few 85 year olds in my circle or my family but equally I wouldn't want to think "I wish I hadn't taken the bigger lump sum" when I'm sitting in my HSL chair aged 85...good to have different takes on the issue though and to see the impact of any decision in cold hard numbers.  Thanks again.

Age 84 ( man ) and 86 ( woman) is the average life expectancy for a 60 year old .
That means 50% will live longer than that , especially the ones with no chronic illness , who are well educated and financially comfortable.
I saw in another thread that insurance/pension actuaries , work on averages even higher .

Secret2ndAccount

UK average for a 60 year old man: