£30k needed by September

iRetiredAtLast

I need £30k by the end of summer for house repairs/maintenance.  I retired earlier this year at 58.

My options seem to be:

Take a pension 2 years early and take £30k tax free.  The pension increases by RPI, max 10%
OR
Take £30k out of a stocks and shares ISA

I’ve no idea what’s the better option as maths is not my strongpoint.

eskbanker

Impossible to say without a much broader understanding of your full financial circumstances, but in general it's likely to be more cost-effective to access money from a S&S ISA than to raid a DB pension that has a generous indexation provision and that's intended to last you throughout your retirement.

Albermarle

Taking the pension 2 years early will reduce your annual pension by around 9% usually, although if you live long enough you will in the end get the same amount of actual cash.
Taking the tax free cash will also reduce your annual pension.
Is the S&S ISA your only other source of funds?

MattMattMattUK

As this is MSE, surely there is a third option, go back to work?

xylophone

go back to work?

With that user name?

InvesterJones

MattMattMattUK said:

As this is MSE, surely there is a third option, go back to work?

Or a fourth, do the maintenance yourself?  

OP, too little info to go on, but as above, S&S ISA likely to be better - but what were your plans for the S&S ISA?

xylophone

OP, have you checked your state pension forecast?

https://www.gov.uk/check-state-pension

iRetiredAtLast

Ha!  Burned out from work and life so employment not an option 

Max state pension due at 67.  

I guess it’s what’s the least worst - taking 25% out of a pension and taking the pension 2 years (-10%) early  or  taking 25% out of an ISA….
Is there much in it?

Dazed_and_C0nfused

iRetiredAtLast said:

Ha!  Burned out from work and life so employment not an option 

Max state pension due at 67.  

I guess it’s what’s the least worst - taking 25% out of a pension and taking the pension 2 years (-10%) early  or  taking 25% out of an ISA….
Is there much in it?

The way you describe the pension seems to suggest it is a Defined Benefit (final salary or CARE) pension so there won't be a 25% TFLS.

There may be a (tax free) Pension Commencement Lump Sum based on the scheme rules but not with all schemes.

Have you actually checked what your scheme allows?

Kim_13

ISA - That can be replaced, but once you’ve accessed a pension you are limited as to what you can put back in. The ISA also doesn’t have a guaranteed linking.

xylophone

Might be the BBC Old Benefits Scheme. I seem to remember from years back there was a long post on this scheme.

If so, the OP's pension would reduce by 8.5% if taken at age 58.

With regard to pension commencement tax free cash,  the pensioner may commute up to 25% of the value of scheme benefits.

Commutation factors here.

https://www.bbc.co.uk/mypension/current-members/old-benefits-handbook#caniexchangepartofmypensionforcash