Lump Sum or enhanced Pension

billgeb

I have deferred State Pension for several years,until now. I have private pensions and already pay 40% income tax. DWP are offering £60k pre-tax lump sum or £102 per week enhanced pension. I am 73 and not sure which is the best option for me. Any advice?

Marcon

billgeb said:

I have deferred State Pension for several years,until now. I have private pensions and already pay 40% income tax. DWP are offering £60k pre-tax lump sum or £102 per week enhanced pension. I am 73 and not sure which is the best option for me. Any advice?

There's no information for anyone to go on, so it's impossible to give any sort of advice other than suggesting that you think about what you want to achieve/your circumstances. For example...do you need the lump sum? Does longevity run in your family? 

Linton

billgeb said:

I have deferred State Pension for several years,until now. I have private pensions and already pay 40% income tax. DWP are offering £60k pre-tax lump sum or £102 per week enhanced pension. I am 73 and not sure which is the best option for me. Any advice?

On crude financial terms it doesnt make much difference.  Things will balance out at around average life expectancy.  But you do get inflation matching with the extra SP and it is inheritable by your spouse, if you have one, since you reached SP age prior to 2016.  

Other factors include:
1) Do you have expensive debts?
2) Do you need the cash lump sum for other purposes?
3) Are your private pensions index linked?  If not extra index linked income could be very helpful especially if you live to a seriously old age.
4) Is there any reason why you would expect to die earlier than average.

A "No" to these questions would tend to suggest extra SP is the better  option.  Otherwise, perhaps otherwise.