NHS pension:increased lump sum v standard

carolyn_2

The NHS pension changes from April 08 and now has the choice to take a larger lump sum and smaller pension. I plan to take early retirement aged 56 next year so please can anyone advise me what factors should influence the decision re the increased lump sum??

NAR

What you need to try and estimate is how much do you require from your pension scheme to live on. Say your basic lump sum is £XXXXX and your pension is £15,000 pa, but you think a pension of £10,000 pa will be sufficient - then enhance your lump sum accordingly.
My opinion always will be take as much lump sum as you can afford to and enjoy it in whatever way you can while you are fit and able to, because a higher pension income in later years will be of little use if you cannot get enjoyment out of it because of ill-health or whatever.

zzzLazyDaisy

Do you still have a mortgage? If you use an increased lump sum to pay it off, that will automatically increase your income by the amount of the repayments, and give you financial freedom.