private pensions

[gemini52]

I have a couple of small pensions due in may,one is worth £29500,and the other £3000,i will take the three thousand one but not to sure about the other,it will pay £2,360 a year,i know its not a lot,works out about forty five quid a week,i can take twenty five percent tax free and the rest will be taxed,it would be nice to have a few quid to spend when i semi retire but when its gone its gone,i will still have to carry on working for at least the next couple of years so the question is do i take it as a lump sum and pay tax or take the small pension.

[wandringstar]

if you had 29500 in the building society the best you could hope for in a bond is about 1.5% a year, about 342 pounds in interest a year, the pension of £2360 represents fantastic value on this money every year, leave it as a pension.

[la bala]

I have a couple of small pensions due in may,one is worth £29500,and the other £3000,i will take the three thousand one but not to sure about the other,it will pay £2,360 a year,i know its not a lot,works out about forty five quid a week,i can take twenty five percent tax free and the rest will be taxed,it would be nice to have a few quid to spend when i semi retire but when its gone its gone,i will still have to carry on working for at least the next couple of years so the question is do i take it as a lump sum and pay tax or take the small pension.

In the end if you take a small pension you will pay tax on it, if its added to your state pension.

[besty57]

I've booked a free appointment with pension wise,to get some independent advice re my pension pot .

I would advise doing the same.

[itchy trigger]

I took the tax free lump sums, because I knew I would end up paying income tax on every penny over my tax free allowance.

then I spent it. for me don't invest/save it, get it spent, the people it gets left to will spend it a lot faster than you accumulated it.

you never know what the future holds

[daveboy]

£29500 divided by £2360 is 12.5 years.

1....Will you live 12.5 years (on average)

2....Is your spouse covered

3...Is it indexed linked

4....Are you a 20% tax payer

If yes to any of the above it's probably a no brainer.

[Wb123]

If it genuinely buys you that much income a year take the pension unless planning to die soon.

[la bala]

I tell you what, when you take private pensions early and live long it dont half seem to pee them off, every couple of years they contact me to prove i am still alive.

[AVB]

Take the tax free lump sum and draw down on the remainder as and when you need it preferably without taking you over your annual tax free allowance.