TFLS Confusion

sparklymarkly

What I meant is that it will pay a spouse pension of 50% so if I don’t take TFLS and get the higher pension, she’ll get 50% of that but if I do take the TFLS and get the smaller pension, she’ll get 50% of that.

Cobbler_tone

In my experience of people taking their (DB) pension....and there has been a LOT of them at my company in my time. The vast majority take some TFLS, with the majority of those taking the full 25%. I guess it comes down to desired guaranteed income, other savings/pension provisions and the need/appeal of some tax free wonga. A lot of people may never get the chance of that much tax free cash again.
It is even more attractive to take the cash if you can enjoy it now, or have a genuine use for it.
I would hazard a guess that there are more people who never live to fully enjoy it, as opposed to those living in poverty because they didn't take the maximum annual pension!

As per the previous post. Our spousal pension isn't impacted by TFLS decisions and based on the full pension. 

DRS1

bolwin1 said:

sparklymarkly said:

Yes - I am married. She on a pretty decent civil service pension and we will both be entitled to full SP in a few years as well.
My pension pays 50% of whatever amount to her after my death so obviously reducing the amount would affect that later.
However, if I were to go first, she’d have the TFLS if I’ve taken it (& not wasted it on something I fancied!).
It really does seem to be a swings and roundabouts situation.

A lot of pensions leave the spouses benefit as-is regardless of the TFLS taken, so it's worth double checking that if it's important to you.

That is more common with DB schemes.  I suspect when you are buying an annuity it is less common - especially as the annuity provider may never see the TFLS (probably not true in this case as there is a GAR involved but certainly true for someone taking an open market option)

DRS1

I don’t think there is any option for an increasing annuity - the only 4 options I was given were single life or joint life level annuities either with or without TFLSs.

OK I guess I will find out later this year if Scottish Widows were spinning me a line

sparklymarkly

DRS1 said:

I don’t think there is any option for an increasing annuity - the only 4 options I was given were single life or joint life level annuities either with or without TFLSs.

OK I guess I will find out later this year if Scottish Widows were spinning me a line

Hopefully not! This one isn’t with Scottish Widows so theirs may well work differently. Good luck with it.