WHY YOU SHOULD NOT TAKE A LUMP SUM FROM YOUR PENSION

Money Mail, April 1

WE’VE worked out that we can take £6,000 a year instead of a one-off £50,000 lump sum and — in the hope it’ll keep growing afterwards in the stock market — we should still have at least £ 35,000 15 years later. The changes are a real boon for us.

J. V., Bath.

LIKE many, I’m still working and will aim to take my pension out in small slices: probably around £3,000 a year from a £40,000 pot. I don’t see the point in a huge lump sum, unless you’ve been hankering after something in particular or are in dire straits and need the money badly.

N. M., Worcester.

MY HUSBAND and I will plan to keep the bulk of cash invested, but it all depends on being able to access it regularly without being hit with penalties.

We have asked our pension provider if they’ll charge — but haven’t got a clear answer yet.

U. M., by email.

I WOULD really like to keep my pension invested, but am worried we won’t be able to manage on the smaller lump sums we take out. My pension pot is about £78,000 — we’ll start off taking out £7,000 a year and see where we get.

J. W., Carlisle.

IF YOU don’t know how long your retirement will be, it’s going to be very difficult to make your money last the length of your retirement.

D. W., Abergele, North Wales.

WHETHER you take your lump sum or not depends entirely on what you use it for. I think it’s a good idea to take it if you need to pay off a mortgage or other debt — but not just to buy a car.

D. L., Sheffield.

IT’S all very well to take out cash in smaller sums if your money keeps growing — but if the value of your pot drops because the stock market crashes again, it changes everything.

N. N., Swindon.

ISN’T the point of taking a lump sum to use it to do something you’ve always wanted to? There’s no point keeping it all invested only to never get to use it.

N. L., Manchester.