Private pension payments 28 February at 2:50PM in Pensions, annuities & retirement planning 10 replies 298 views

Silverbird65

Is it better financially to get pai annually or monthly in arrears?
Thanks

Brie

I'd rather have my money in my account sooner rather than later.  The only reason I would go for an annual payment is if it was tiddly.

Silverbird65

It is £1485. Is that tiddly?☺️

dunstonh

Silverbird65 said:

Is it better financially to get pai annually or monthly in arrears?
Thanks

What is it in respect of?  (you just said private pension but that is effectively any pension other than state.  Although some people treat private pension as any other than state or workplace).

For drawdown it makes no difference.   For annuities, it can make a difference but there are other adjustments in there (such as with or without proportion).  Advance tends to give a fractionally lower annuity rate.

Scheme pensions often don't give the choice but theoretically, they could.

xylophone

If annually in arrears surely better to be paid monthly?

Silverbird65

My husband has a cope amount as he has been longer to retirement than me he has worked from 2016 till this July23 and therefore has built up a full pension. I had a full NI record but retired Nov 2016 and therefore didn't have the opportunity to make more contributions.

Silverbird65

No it was a GMP.
From contracted out period.

Moonwolf

I've been thinking about this, my considerations are

1) If you take an annual payment in April you will be taxed as if you will received 12x that much in the year.  You can claim it back but it is extra work. Being paid in March is less work as it taking the money monthly. 

2) Assuming this is a DC scheme drawdown and not an option on a DB scheme.  Generally the longer you leave the money in your investments the more it will grow.  However in a bad year, taking your payment at the end might mean you see a loss you wouldn't have and that hurts.

3) Can you budget, this is a big consideration for me, I budget well on a monthly basis but can I switch to annualised budgeting. No idea but I might decide not to take the challenge.

4) If this was a DB scheme I'd take it monthly, mainly because of point 1 and point 3.

Silverbird65

No it's not drawndown it's just a GMP to cover cope amount.

geordiejon

silverbird, i would take the payment monthly as it will give you extra to your state pension.
you said on another thread that your state pension was less than the full ammount so if that is your only income then tax will not be a problem.

Marcon

Silverbird65 said:

My husband has a cope amount as he has been longer to retirement than me he has worked from 2016 till this July23 and therefore has built up a full pension. I had a full NI record but retired Nov 2016 and therefore didn't have the opportunity to make more contributions.

But your husband has had to go on working for another 7 years...