LGPS - additional pension v. lump sum

liz30_2

I have retired with an LGPS pension and an AVC fund of £35,000. I am offered an additional pension from this fund of £2,200pa (index linked, half pension for surviving spouse). Does taking the fund as a lump sum beat this?

Curious_Moose

Depends on your age at retirement and whether you're male/female (I'm assuming female from your username)

Andy_L

If you have the lump sum you can generally buy an annuity (the source of that £2.2k pension) under better "voluntary" terms (or buy a sports car). Since you should be able to get the lump sum out of the AVC without having to sacrafice final salary benefits taking the lump sum is likely to be a good thing

liz30_2

Curious Moose - I'm 65, and yes, female.

Andy L - thanks for info. Where would I look for an annuity providing £2,200 on a £35,000 fund?

Retired_I.F.A.

You can buy an annuity with the tax free lump sum andit could be higher or lower if on a like for like basis than that given up but looking at sites that show annuity rates wont help really because that which you are giving up would have been taxable in full whereas buying an annuity from the tax fee lump sum is only taxable in part. No on line site i know of quotes annuities of these types so your only real way to do a comparison is to go see an IFA.

EdInvestor

These are called purchased life annuities.

More details of how they work here:

http://www.sharingpensions.co.uk/pension_annuity9.htm