Private Pension Lump Sum & Pension Credit

lipservice_2

Hope I am posting this into the right forum?

I am a single female with no dependents, about to become a pensioner - 60 soon! So filling forms in etc ready for this.
I had to finish work through illness some years ago, soon after taking out a Private Pension, so had to freeze my contributions, hence not much in it.

The main reason I am posting here in the forum, is to ask advice regarding taking the Lump Sum offered by the private pension company? Would there be any drawbacks by taking the full lump sum?

Private Penson:
I can either take a small lump sum of £766.15 - plus a monthly income of £9.80
or
I can take a lump sum of approx £2,676.95, after tax, with no further income.
I believe the maximum savings allowed for Pension Credit is £6,000 (in my case) so if I accept the full Lump Sum, this should be OK?

As I have some debts, I am not sure which is the best option, to take all the Lump Sum or the lower amount with a monthly income of £9.80


My Income will be:
State Pension £72.60
Pension Credit £112.00 Approx - ** after deduction of £3.28 for Private Pension but including help towards mortgage interest

**A letter from the National Insurance Contributions has said that £3.28 will be deducted from my Pension Credit, as this is the amount they have calculated that I will receive for my Private Pension.

My debts are:
Credit Card - £2,000 at a low 4.9% for life (so long as I don't spend on the credit card - Martin's excellant advice!:money:)
Credit Card - £300
Endowment Mortgage - with a shortfall of about £4,000 in about 4 years, so will need to do something about this soon!

I have no savings or Insurance for my death (funeral), other than the Endowment Mortgage - which will end in about 4 years.
Also I am looking at moving to a smaller house, so the extra money would help

Looking for any advice on this - thank you