Hoping for some advice as I am very close to taking my teachers pension at 60.
I have the choice of taking an automatic tax free lump sum and the highest pension annually, or a larger tax free lump sum but a smaller pension.
The total annual pension amount is only in the region of 7K since once I had children I worked on supply and never paid in to my pension again.
I currently work outside of teaching and will need to continue working until state pension age.
My salary combined with my pension would obviously mean I will have to pay more tax on the total amount. This will not put me in a higher tax band.
For this reason I am pondering whether it would work out better financially if I were to take the larger lump sum which would be an extra 15K and reduce my pension by up to 2K so as to avoid paying more tax on the totally amount for the next 7 years?
Some ex colleagues have done a mixture of things. Some have given up work completely and have taken the full pension and smaller lump sum, but then again are in the position not to need to work again.
Others have taken the larger lump sum as they have used this to pay off their mortgages.
I am single, own my own home mortgage free and have some savings.