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If I take AAB now.....

Discussion in 'Retirement' started by snowstorm, Feb 27, 2016.

  1. snowstorm

    snowstorm New commenter

    ......can I take a larger pension and smaller lumpsum? Does any one know please?

    I can't see any info about this on the TPS website.

    Ta in advance

    SS
     
  2. marlin

    marlin Star commenter

    Have you looked at the pension calculator on TPS?

    Here
     
  3. FrankWolley

    FrankWolley Star commenter

    I took AAB nearly 3 years ago, and took the maximum lump sum (tax free!) and lower annual pension (taxed).

    Seems to be working out for us OK so far...fingers crossed!

    So I'm not sure why you would opt to pay more tax, tbh.
     
  4. lindenlea

    lindenlea Star commenter

    If you planned to live for a very long time maybe and already had plenty of cash in the bank. having said that I did take max lump sum.
     
    snowstorm likes this.
  5. FrankWolley

    FrankWolley Star commenter


    I'd love to live for a very long time...Any tips? :D
     
    eljefeb90 and lindenlea like this.
  6. sagesund

    sagesund Occasional commenter

    Hi, was thinking of doing the same thing myself. I contacted TP a few months ago, but was told that this wasn't an option.
     
  7. snowstorm

    snowstorm New commenter

    I thought that might be the case; thanks sagesund
     
  8. snowstorm

    snowstorm New commenter

    I have, but I couldn't see an option for that
     
  9. snowstorm

    snowstorm New commenter

    I just think I'd prefer to have a larger monthly income that's index-linked....to keep myself in the lifestyle to which I've been accustomed to....on the other hand, I could sink a larger lump sum into another property.....don't know what's the better option....
     
  10. snowstorm

    snowstorm New commenter

    I just think I'd prefer to have a larger monthly income that's index-linked....to keep myself in the lifestyle to which I've been accustomed to....on the other hand, I could sink a larger lump sum into another property.....don't know what's the better option....

    Any thoughts on this?
     
  11. marlin

    marlin Star commenter

    It would seem you can increase the lump sum, but not reduce it, looking at the calculator and what has been said above. I would still ring them though and check for yourself. Rules and regulations change all the time. Is using your lump sum to buy extra years of contributions an option for example? Just thinking aloud ... ...
     
  12. eljefeb90

    eljefeb90 Senior commenter

    I opted to have the maximum pension which, as you say, is index-linked. It's all very personal to one's financial needs and attitude to risk as well as your health and how long you think you'll last! The drawback is that the pension is taxed. I was the only income earner for my family so taking the maximum pension was the obvious option. You should be aware that investment options aren't great at the moment with stock markets going down, miniscule interest rates and the upcoming tax on second homes/ buy to let.
     
  13. lindenlea

    lindenlea Star commenter

    We used some to get son2 on to the housing ladder. Money well spent!
     
    FrankWolley likes this.
  14. Lara mfl 05

    Lara mfl 05 Star commenter

    Never thought about that option before. Having only 6 years TPS anything to make a difference might help.

    This was my thinking too, mainly because, even with state pension I won't be anywhere near the tax threshold to need to pay tax.
     
  15. baitranger

    baitranger Senior commenter

    Without doing the research, I'm not sure to what extent Inland Revenue's pension lump sum recycling rules might apply, but it would be worth the time to check it you're thinking of buying extra pension with your lump sum.
     
  16. Yoda-

    Yoda- Lead commenter

    Do you have the need for a larger lump sum? I don't. I know I will pay more income tax than I have to by taking just a 25% lump sum.

    Investment returns are pathetic at the moment. I'd rather have a larger pension income which won't reduce with time. Larger poor return investments hold little attraction.
     
    Lara mfl 05 likes this.
  17. applecrumblebumble

    applecrumblebumble Lead commenter

    Don't think that is an option as you would have to use your lump sum to buy additional pension. Once you claim your pension you cannot buy additional pension retrospectively. You could use any other lump sum to buy additional pension whilst still in service. The best thing to with a lump sum assuming you have no debt to pay off would be to invest it or safer put it into bank accounts that pay interest - bear in mind you can earn £1000 interest from April tax free.
     
    eljefeb90 likes this.
  18. lizziescat

    lizziescat Star commenter

    This was the issue that came to my mind. Recycling rules might to rule out this option.
     
    Yoda- likes this.
  19. Yoda-

    Yoda- Lead commenter

    I believe the amount you can invest in a pension reduces to £10 000 PA if you have already taken a pension. You would need to check this, but I am fairly sure I have remembered it correctly.
     
  20. FrankWolley

    FrankWolley Star commenter

    So we did we (with one of our children)
     

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