Full pension vs Lump sum

Retired_I.F.A.

NAR wrote: »

I agree with chuckles - what's the point of having a large pension in your late seventies and eighties (and beyond) if you don't have the health to be able to get out and spend it. Take the large lump sum and SKI to your heart's content!! :beer:

Same argument goes for taking the transfer value the same tax free cash and buying a level annuity. Skiing in Austria is a lot better than in Scotland

KAYGEE_2

Thanks everyone for all your comments.

I feel certain that I will be taking the lump sum option.:beer:

jem16

Retired_I.F.A. wrote: »

Skiing in Austria is a lot better than in Scotland

SKIing, as per NAR, doesn't matter where you are. I'd rather be in a lovely, warm place.

chuckles1066

jem16 wrote: »

SKIing, as per NAR, doesn't matter where you are. I'd rather be in a lovely, warm place.

But isn't skiing a little difficult in the Caribbean?

EdInvestor

SKI = Spending the Kids' Inheritance.

ManAtHome

For the warmer areas of the world, try We Ave To Extract Revenue SKIing...

Hymie

Comparing option 1 with option 2 - £95,000 is buying you a £5,000 a year income.
This represents a return of just over 5% (taxable).
But with pensions, things get complicated.
Your pension investment is paying you around 5% on the capital sum, and effectively increasing the capital sum by between 3-5% per annum (your £95,000 will be paying you more than £5,000 in successive years). The down side is that when you die – the pension company get to keep the £95,000.
I would say that your £95,000 invested in the pension represents a fairly good investment – unless you have a compelling need for £95,000 (you owe lots of money on which you are paying a high interest), I reckon you should give option 1 serious consideration.
I would also take on board what others have said – you need to enjoy the money while you can.