Many retirees are in a position where they need to decide between taking a pension or a lump sum on retirement.
Workplace pension schemes may offer options of a lifetime pension, a lump sum or a combination of the two.
A part lump sum option also applies to members of the old Government Superannuation Fund Scheme and to people who have transferred a UK pension (under certain conditions). In addition, you can now use a lump sum to purchase your own annuity providing a regular monthly payment for life. In all these situations, the key question is "Should I take a pension or a lump sum?"
The answer will depend on your personal situation. The advantage of a pension is that it provides a known amount of income for the remainder of your life.
This helps take away the uncertainty of how long you are going to live and what investment returns will be.