Civil Service Classic Pension

Sunsh1ne54

Good Morning everyone 
Can anyone please explain how I might commute some of my pension lump sum into my monthly pension payments.  Also how much it costs to do so?
Many thanks 

Dazed_and_C0nfused

Sunsh1ne54 said:

Good Morning everyone 
Can anyone please explain how I might commute some of my pension lump sum into my monthly pension payments.  Also how much it costs to do so?
Many thanks 

I think you want this

Inverse Commutation factors and guidance (Classic) – PCSPS

https://www.civilservicepensionscheme.org.uk/knowledge-centre/resources/actuarial-factors/

Sunsh1ne54

Dazed_and_C0nfused said:

Sunsh1ne54 said:

Good Morning everyone 
Can anyone please explain how I might commute some of my pension lump sum into my monthly pension payments.  Also how much it costs to do so?
Many thanks 

I think you want this

Inverse Commutation factors and guidance (Classic) – PCSPS

https://www.civilservicepensionscheme.org.uk/knowledge-centre/resources/actuarial-factors/

Thanks, that’s exactly what I need 😀

Sunsh1ne54

Having done the sums, and all things considered (time to break even, tax etc) best to take the lump sum and invest it myself. 

Dazed_and_C0nfused

Sunsh1ne54 said:

Having done the sums, and all things considered (time to break even, tax etc) best to take the lump sum and invest it myself. 

Just the standard one I presume, not giving up any pension for extra TFLS?

Sunsh1ne54

Dazed_and_C0nfused said:

Sunsh1ne54 said:

Having done the sums, and all things considered (time to break even, tax etc) best to take the lump sum and invest it myself. 

Just the standard one I presume, not giving up any pension for extra TFLS?

Yes, just the standard TFLS 

ToneP

Sunsh1ne54 said:

Having done the sums, and all things considered (time to break even, tax etc) best to take the lump sum and invest it myself. 

I agree. I recently did the same calculations and the poor commutation rate meant that it seemed more likely that I could use the lump sum to generate a better income. Probably......

This would be especially true if you had any form of debt that could be reduced or paid off.

I think it's a case of a bird in the hand being worth more than two in the bush.

QrizB

ToneP said:

Sunsh1ne54 said:

Having done the sums, and all things considered (time to break even, tax etc) best to take the lump sum and invest it myself. 

I agree. I recently did the same calculations and the poor commutation rate meant that it seemed more likely that I could use the lump sum to generate a better income. Probably......

For someone retiring at 65, the inverse commutation factor of 5.75% is better than the 5.3% that HL currently quote for a single-life, 3% increasing annuity. And government pensions incease by uncapped CPI, which arguably is worth more than a fixed 3%.

While the BoE's CPI target is 2%, we've seen that they can't always achive that!

hugheskevi

QrizB said:

ToneP said:

Sunsh1ne54 said:

Having done the sums, and all things considered (time to break even, tax etc) best to take the lump sum and invest it myself. 

I agree. I recently did the same calculations and the poor commutation rate meant that it seemed more likely that I could use the lump sum to generate a better income. Probably......

For someone retiring at 65, the inverse commutation factor of 5.75% is better than the 5.3% that HL currently quote for a single-life, 3% increasing annuity. And government pensions incease by uncapped CPI, which arguably is worth more than a fixed 3%.

While the BoE's CPI target is 2%, we've seen that they can't always achive that!

Remember that in comparisons like this, doing reverse commutation you are turning tax-free lump sum into taxable income, whereas the annuity would be purchased with 75% taxable, 25% tax free funds, so also need to take that into account.