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What to do with UK Pension?

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  • 28-03-2013 9:00pm
    #1
    edenbridge146
    Registered Users Posts: 153 ✭✭


    Hi there

    I will be 60 in June and will be receiving a private pension from a British Telecom who I worked for. I am living in Ireland for 10 years now but have not worked and have no contributions.

    However I have lived in the UK working with BT. Upon leaving BT 11 years ago my pension was worth £4209.61 Stg. Now its worth £6138.47 stg.

    I have been offered the following alternative options from them.
    1.) Annual Increasing Pension of £6138.00 stg
    2). Annual Increasing Pension of £4325.00 stg and a lump sum of £28,833 stg
    3.) Annual Increasing Pension of £3900.00 stg, and a non increasing pension of £3206 stg totalling £7102.00 stg
    4.) Annual Increasing Pension of £1800 stg, and a non increasing pension of £3206 stg with a lump sum of £33362.00 stg


    I have a wife 20 years younger, who works full time who is also studying her Masters so looks promising for her continuing employment, along with 2 young kids aged 12 & 9. I have a house worth €350k with a tracker mortgage on it for €110k (17 years left) along with a bedsit attached to it (Converted garage) that generates a rental income of approx €300 a month) I am also an insulin dependent diabetic and with my health been good at the moment, i'm concerned that as I get older it may become more difficult to manage.

    Does anyone know whats the best option to take re the pension.

    Thanks in advance


Comments

  • Options
    #2
    BarryLyndon
    Closed Accounts Posts: 43 ✭BarryLyndon


    Hi OP.

    I'm not going to give you advice per se, though I would note that option 1 does look of interest from the point of view of inflation protection.

    However on a technical point, what I would clarify with your adminstrators is what exactly is stipulated in terms of the spouse's pension. Typically it will be a certain percentage (e.g. 50%) of the member's pension but on occasion the scheme rules may apply a reduction where the spouse is more than ten years younger than the member. It is something you ought to be at least be aware as it could be relevant to you.


  • Options
    #3
    edenbridge146
    Registered Users Posts: 153 ✭✭edenbridge146


    Thank you Barry for your reply.

    The rate of inflation on my pension was always index linked to the Consumer Price Index and is now linked to the Retail Price index which is a cost saving measure for British Telecom and last year the rate of increase was 0%. The pension scheme I am in has capped the rate of inflation at 5%.

    Because of the age gap, my spouse will get 50% of my pension in the event of my death.

    There is obviously a lump sum there for a reason - trying to dangle a carrott. I was personally thinking of Option 2 cos it would help reduce the mortgage and still have a little pension that is index linked.

    Still so undecided!!!


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