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 Post subject: Pension payment
PostPosted: Thu Feb 28, 2013 12:37 pm 
Karma Queen / Cake Meisterin
Karma Queen / Cake Meisterin
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Joined: Thu Jul 27, 2006 10:02 pm
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Location: North Yorkshire
My husband was made redundant in 2000 and we have just received a letter about his old pension scheme saying he has a choice £169 pa after he retires or £5517 lump sum in May with no pension entitlement from the company after retirement, he does have a pension scheme with the company he's at of course.

So what would you go for lump some or the added £169 pa on top of you other pension when you retire?

Alison


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 12:43 pm 
Old School Grand Master
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Joined: Sun Aug 21, 2011 11:57 pm
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Location: Antwerp, Belgium
5517 / 169 = 32.64

So if your husband lives another 33 months (2 years and 9 months) after his retirement, taking the added pension becomes more interesting than the big sum.


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 12:54 pm 
Special Retro Guru
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Joined: Mon Sep 29, 2008 11:34 am
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Location: Don't mess with monkeys, man
Raging_Bulls wrote:
5517 / 169 = 32.64

So if your husband lives another 33 months (2 years and 9 months) after his retirement, taking the added pension becomes more interesting than the big sum.

pa not pm.


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 12:55 pm 
Retro Guru

Joined: Mon Apr 03, 2006 5:11 pm
Posts: 1103
Raging_Bulls wrote:
5517 / 169 = 32.64

So if your husband lives another 33 months (2 years and 9 months) after his retirement, taking the added pension becomes more interesting than the big sum.



Its £169 a year not month. By your working if he lives more than another 33 years then quids in taking the monthly.

Not taking into account inflation or interest. of course.

Perhaps he could use the five grand payout to buy extra years in his current pension would be worth doing that especially if its a final salary scheme.

I'm not a financial advisor or qualified in any way to give advice of any sort.... so go and ask a financial advisor or pensions rep at the current workplace.


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 12:56 pm 
Gold Trader / PoTM Winner
Gold Trader / PoTM Winner
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Joined: Mon Aug 08, 2011 2:35 pm
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Or... the annual interest earned on £5.5grand in a high interest ISA will be more than £169/year

Go for the lump and pop in a high interest ISA (its below the threshold limit as well)



G


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 1:13 pm 
Old School Grand Master
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Joined: Sun Aug 21, 2011 11:57 pm
Posts: 4074
Location: Antwerp, Belgium
ah yes, I totally missed the "pa" bit.thought it was monthly.

Yea, 33 years is a long time. In that case I'd take the big sum too.


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 1:16 pm 
Karma Queen / Cake Meisterin
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Location: North Yorkshire
The thing is we have a car that every MOT costs us at least £600 is rusting and has developed a few probs as well and is due for another MOT this summer and there were issues with the braking last MOT which will need doing this time, so a lump sum for a car would be soo tempting, as living in a small village 7 miles from town and four childre our car is vital, but as mentioned it could go into his work pension, Oh the dilemma

Alison


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 1:35 pm 
MacRetro rider
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Joined: Fri Feb 09, 2007 4:16 pm
Posts: 8658
If the car costs £600 to get through its MOT every time its MOT'd then get a new banger that costs less to MOT :shock:
Put the lump sum in a ISA and leave it unless the Bank of England does plump for negative interest then savings are not really worth the bother.


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 2:07 pm 
Retro Guru
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Joined: Thu May 20, 2010 9:03 am
Posts: 1800
Location: Newlyn,Cornwall.
Isaac_AG wrote:
My husband was made redundant in 2000 and we have just received a letter about his old pension scheme saying he has a choice £169 pa after he retires or £5517 lump sum in May with no pension entitlement from the company after retirement, he does have a pension scheme with the company he's at of course.

So what would you go for lump some or the added £169 pa on top of you other pension when you retire?

Alison


It's a no brainer,get yourself a new bike for the summer.He did work to support you didnt he.


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 Post subject: Re: Pension payment
PostPosted: Thu Feb 28, 2013 3:52 pm 
Retro Guru

Joined: Mon Apr 03, 2006 5:11 pm
Posts: 1103
unkleGsif wrote:
Or... the annual interest earned on £5.5grand in a high interest ISA will be more than £169/year


Best cash ISA rate ATM is 2.8% AER = £154 per year

Isaac_AG wrote:
The thing is we have a car that every MOT costs us at least £600 is rusting and has developed a few probs as well and is due for another MOT this summer and there were issues with the braking last MOT which will need doing this time, so a lump sum for a car would be soo tempting, as living in a small village 7 miles from town and four childre our car is vital, but as mentioned it could go into his work pension, Oh the dilemma


If you need the money badly now....then fair enough..... however it is pension money that he saved at the time for retirement, I would want to tuck it away if I could.

Have you paid off your mortgage? Might be better putting it into the mortgage, most let you pay 10% or so extra off the capital per year. This would reduce your monthly mortgage spend meaning you would have money to increase existing pension / car / bike payments.


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