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Thread: Guaranteed Annuity Rate take 25% tax free or not?

  1. #1

    Guaranteed Annuity Rate take 25% tax free or not?

    I have a pension with a guaranteed annuity rate of 9.8%. I need to decide whether or not to take the 25% tax free sum or use the whole pot. My feeling is NOT to take the 25% but use the whole pot for the annuity.

    Any thoughts one way or the other?

  2. #2
    A difficult decision. If you do not need the money then why take 25%. But if you have a spouse who is reliant on the State Pension only and your annuity does not cover her on your departure then you may want to take the lump sum and use it to provide for her in the future.

    As I say a difficult decision, but a nice one to have. Good luck with your pondering, but what ever you decide will be the right decision of you.

  3. #3
    Do not take any tax-free cash and hope to live to a ripe old age.

  4. #4
    I agree with Tony - in that scenario I would be loading up on my preferred holdings as quality will recover more quickly - while some of the dodgier companies in an ETF might not recover at all if there's a major crisis...

  5. #5
    The real point is that ETF's are Baldrick style "cunning plans". They are not real investments. Any more than were the rolled up toxic debts of America's overborrowed poor, those CDOs, certified as AAA by the US credit reference agencies..

    Bricka and mortar are an investment. As is land. As is a certified stake in the ownership of a profit-making company.

    I don't care much for cunning plans.

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