Take annuity or use savings

You are much too young for an annuity to be good value. Unless interest rates, and therefore annuity rates, shoot up before March.

Is your small work pension a defined benefit pension like final or average salary or is it defined contribution with specific investments held just for you?

Why do you think an annuity is required for your personal pension? Is it just not knowing that the rules changed or is there some special feature of it that bans doing anything else? Often providers will only give buying an annuity as a choice if that's the only choice they offer, without bothering to mention that you can transfer to get the full range of choices.

While it's unlikely for a personal pension, assuming it was started after the year 2000 or so, it is worth checking whether there is a guaranteed annuity rate or other protected benefit from the personal pension. Those typically have a limited range of ages when they are available and could pay two or three times as much as an open market annuity today, sometimes even more than state pension deferral would pay. If there is one, age 60 is a fair candidate for when it would first become available and it might well be a good buy.

Assuming what you have is typical the best choice would probably be something like this:

1. Use your savings to make maximum permitted contributions into a pension while still working. The maximum is the lower of either your gross pay or £40,000 plus unused annual allowance from the past three years.

2. Take a 25% tax free lump sum from the money purchase pensions and use this as part of the income base.

3. Take enough from the personal pensions to use your personal allowance even if not needed yet, so none of it is wasted.

4. Learn about P2P. The rates available from places like Ablrate and MoneyThing are impressive and not unrealistic, though you shouldn't plan on more than say 10% after allowing for bad debt.

5. It may not be best to take your 14k work pension that I'll assume is defined benefit. This is because there is normally an actuarial reduction for taking it before the scheme's normal retirement age. If 60 is NRA then do take it. If it's older it's worth checking the reduction level to see if waiting might be a better move, supplementing with income from the personal pensions while not taking it.

6. Use state pension deferral instead of annuity purchase if you want to increase your guaranteed for life income level.

Looks as though you're invested in some of the lowest paying P2P around, maybe through seeing the TV ads they used to get people to invest via them.

There's currently at Ablrate a new loan for up to £1.42 million that will pay 14%, secured on the assets of a reycling and green power company, the Derwenthaugh Ecoparc. £720,000 was raised over the summer in an earlier loan as part of refinancing the funding used to buy the plant.

That one is quite unusual and it's reflected in the 14% interest rate. Very different from the common property development deals that are just funding a new or upgraded building job, and with more risk than those, so definitely not one for a lot of your money, though maybe £1,000 might be interesting as part of a mixture including many other things.

A fair bit of availability there on the secondary market, check the "yield" column when comparing, that's the effective interest rate per year. Not so much available on the secondary market at MoneyThing at the moment but they do have a fairly steady stream of new loans.

Annuities start to become good value for money for those in normal good health around age 80-85. So yes, it would be a good idea to leave the money you might use to buy an annuity invested for as long as possible. Or at least until your state pension age, when you can use the money to fund living while deferring your state pension. The increase from state pension deferring is a good deal for those who want guaranteed for life income.

Since your current provider doesn't offer drawdown you might want to ask whether they anticipate that changing soon and just get on with moving if they don't. The 25% tax free lump sum can generate useful ongoing income and while P2P isn't yet available inside an ISA from interesting places (it is from a few) that is expected to change over the next six months or so.