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Worth getting a loan to receive pension as a lump-sum?

ellens
ellens Posts: 33 Forumite
Part of the Furniture Combo Breaker
in Pensions, annuities & retirement planning
Hello,

I will shortly be recieving a protected rights pension worth about £32,000. paid to me about £450- £600 monthly.

As I would rather have a lump sum, I approached my bank, Royal Bank Of Scotland for a loan. I have been turned down by other low rate loan companys for credit reasons.(rates as low as 6.5%) My bank is willing to give me 7.9% over 7 years for £21,000. Is this a good idea do you think?

Also, I have been told by the bank rep. that their "loan sale" ends tomorrow, Friday, after which the A.P.R. will be higher? therefore I must decied tomorrow. Is this correct?

Any better ideas to get a lump sum? Must be simple as I am simple.

Thanking you in anticipation

Ellen

Comments

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    I will shortly be recieving a protected rights pension worth about £32,000. paid to me about £450- £600 monthly.

    I would suggest you check this figure, which seems too high. A fund of that size would be more likely to pay about 160 per month, depending on your age, before tax.
    Trying to keep it simple...;)
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    10,000 Posts Combo Breaker
    I'm a bit confused ... sorry.

    What do you need a lump sum for?
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • cheerfulcat
    cheerfulcat Posts: 3,416 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    ellens wrote:

    Also, I have been told by the bank rep. that their "loan sale" ends tomorrow, Friday,
    I'm confused, too; tomorrow is Saturday.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    I had assumed ellens planned to take a loan out for a lump sum, which would then be repaid from the pension income.

    But I agree it seems a rather misconceived plan, not least because the numbers don't seem to add up. :confused:
    Trying to keep it simple...;)
  • ellens
    ellens Posts: 33 Forumite
    Part of the Furniture Combo Breaker
    Thank you all for your helpful replies. I warned you I was simple!
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