Draw DB pension and invest 25%?

quantum

I am seeking advice on my defined benefits pension, which I had intended to start to draw shortly. 
I had considered taking my maximum cash sum of appx £60k plus reduced pension and investing that. £20k in an ISA and the rest in either a savings account or stocks and shares. 
I'm 63 in July.

quantum

Thinking with the market falls this week might be a good time to liberate my maximum cash sum. I will soon need to start drawing the rest as Pension to pay the bills...

dunstonh

Thinking with the market falls this week might be a good time to liberate my maximum cash sum

1) is taking maximum tax free cash the best option financially?  (it often isn't with many DB schemes)
2) your thread title indicates investing a quarter of the tax free cash but your post indicates investing a third of it.   How much would you be investing relative to your cash savings?

Section62

quantum said:

Thinking with the market falls this week might be a good time to liberate my maximum cash sum. I will soon need to start drawing the rest as Pension to pay the bills...

I'd speculate the amount of time it will take to liberate the maximum lump sum and have it in your hands may mean the markets have recovered significantly.  Though this is a guess, not a fact.

The question then has to be whether you'd be thinking about doing this if the market falls this week hadn't happened?

I'm interested in the answers though, as it is something I may want to make a similar decision about later this year.

Albermarle

I'd speculate the amount of time it will take to liberate the maximum lump sum and have it in your hands may mean the markets have recovered significantly.  Though this is a guess, not a fact.

Yes, it took me 5 months for me to get my DB pension to actually start from first request !

subjecttocontract

I took 25% lump sum from my pension 20+ years ago and used it as a down payment on a property to let. That property sold recently for over 3 times what I had paid. I guess I may have been able to triple my money, or more, had I invested it in shares. 

dunstonh

subjecttocontract said:

I took 25% lump sum from my pension 20+ years ago and used it as a down payment on a property to let. That property sold recently for over 3 times what I had paid. I guess I may have been able to triple my money, or more, had I invested it in shares. 

20 years for a global tracker would have turned £100,000 into £429,944

subjecttocontract

dunstonh said:

subjecttocontract said:

I took 25% lump sum from my pension 20+ years ago and used it as a down payment on a property to let. That property sold recently for over 3 times what I had paid. I guess I may have been able to triple my money, or more, had I invested it in shares. 

20 years for a global tracker would have turned £100,000 into £429,944

Good to know they are both somewhat similar then.
Rental property has both revenue income & capital appreciation.

Bravepants

Albermarle said:

I'd speculate the amount of time it will take to liberate the maximum lump sum and have it in your hands may mean the markets have recovered significantly.  Though this is a guess, not a fact.

Yes, it took me 5 months for me to get my DB pension to actually start from first request !

Mine took 9 months to gestate!

thunderroad88

quantum said:

I am seeking advice on my defined benefits pension, which I had intended to start to draw shortly. 
I had considered taking my maximum cash sum of appx £60k plus reduced pension and investing that. £20k in an ISA and the rest in either a savings account or stocks and shares. 
I'm 63 in July.

I did this 3 years ago, took lump sum and invested it in a combination of equities and fixed savings accounts. It’s easily returned way more each year than I gave up in annual pension plus I still have the full capital amount. Worked for me but I guess some people prefer the safety of 100% guaranteed income and don’t take it.

quantum

Just to add details. I had already decided to draw my DB pension. I am still considering the options. I'm unsure whether to draw any out as tax free amount which as mentioned £60k (25%) would be tax free. An accountant friend of mine suggested investing this and draw the rest. Then if you think this is a decent way forward presumably you'd recommend maxing my current year ISA 1st?