Hi Guy’s. Your thoughts please if I may.I’m 60 soon and and am able to take My NRA 60 benefits. I have 3 choices.
1 Tax free lump sum about £28 K plus £9K per annum
2 Tax free lump about £54K plus £8K per anum
3 Exchange My entire lump sum for £11 K per year.
I have no mortgage or big debts or dependants and am able to continue to work so which should I choose do you think? I really need to get this right. TIA
Pure numbers wise 2. looks your best option.
Put the £54k into blue chip shares yielding 4-5% (plenty of those to choose from) and net income will basically be the same as 3 but you have the cash in your accounts and all the options/flexibility/ that brings.
Originally Posted by lew07
Are those numbers correct? £11k pa to £9k pa is £2k pa "surrendered" for £28k But £9k pa to £8k pa is £1k pa "surrendered" for an additional £26k (£54k - £28k).
Taking £11k to £9k pa, gets you £28k. That's £28k now in exchange for £2k pa. Ignoring inflation (dangerous these days) means that you get 14 years of £2k but tax-free.
More questions than answers, I'm afraid!
(1) Do you want/need a cash lump sum now? To spend or as a contingency fund.
(2) Ignore. Sorry, you said no dependents!
(3) What are the provisions for indexing your pension every year?
(4) Will you be a taxpayer?
(5) Will you be receiving a state pension?
Last edited by David_D; 15th July 2023 at 17:08.
Of the options as stated, definitely 2.
As mentioned above, it does seem a slightly odd trade off though.
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For me - big lump sum - anything can happen
Jack the job in - live off the lump sum
Definitely not option 1.
Having chosen pension options myself two years ago the small difference in annual pension compared to the big difference in lump sum between options 1 and 2 seems very strange to me.
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