To commute or not commute - that is the question!

juneanne

I have the choice of a widows army pension of just over £203 per month for life (will be subject to inflation increases) or a taxable lump sum of just under £28,000 (which equates to approx 9 years of the monthly payment). I will be 77 this year. Although my monthly income is now less than it was I am financially secure so a lump sum is not urgently needed. Should I (a) take the lump sum and invest it or (b) place lump sum in an account and pay my current account £203 per month or (c) take the £203 monthly pension. Also will lump sum be subject to 20% income tax?

sammyjammy

You calculation doesn't take into account inflation whereas your monthly pension will, you need to consider that.  If you aren't going to spend the £28k then i don't see why you would take the lump sum, can't help on the tax front, sorry.