Advice on 65 pension

[Telephone]

Hi
Looking for advice from Robert T or anyone knowledgeable for a colleague. He has received his pension options but is unsure which option would be in he’s best interest to take.
OVERVIEW
Male 65 Homeowner and still employed by Royal Mail.
Option 1
1.Reg income £3,350.00+tax free cash £10,000+From cash balance tax free cash NONE. Left over benefits from cash balance NONE.
1a Reg income £3,350.00+tax free cash £10,000+From cash balance tax free cash £12,300.00. Leftover benefits from cash balance £35,500.00.
Option 2
2.Reg income £2,900,00+tax free cash £19,000+From cash balance tax free cash NONE. Leftover benefits from cash balance NONE.
Option 3
3.Reg income £3,800.00+tax free cash NONE+From cash balance tax free cash NONE. Leftover benefits from cash balance NONE.
3a. Reg income £3,800.00+ tax free cash NONE +From cash Balance tax free cash £25,200.00. Leftover benefits from cash balance £22,500.00.

NRA 65 benefits.
Option 1 Take full retirement pension of £1,271.00 per annum+ tax free PCLS £3,800.00
Option 2 Reduced retirement pension of £1,050.00 +PCLS of £7,150.00
Option 3 Exchange Entire PCLS for higher annual pension £1,484.00.
Thank you for your help.

[heapsy]

There will be better qualified people on here than myself. However, two things come to mind. When we talk of tax free money, that my not be strictly true. I know a driver from our Mail Centre who has hit 65 and is still working. He had to pay £6,000 tax on some of his so called tax free money. This will, in part, be down to annual earnings, including of course, his NRA60 pension. It will also be down to the Cash Balance scheme overrunning it's intended life span. Remember, we should by now be paying in to the new NRA67, or whatever they want to call it.

Something else to think about, is your friends lifestyle and spending habits. Do they like to change cars regularly. Expensive holidays? Debts to clear?
Do they already have, or will they get money from inheritance? Many people would probably still take the maximum cash, even if it meant paying some tax on the lump sum. It's yours to down whatever with. Gift some to the kids maybe? They might spend some money like a supplement, over a certain period, to get the best life they can, whilst still being fit enough to enjoy it. (this is sometimes referred to as front loading) etc etc. Only they can answer that one, as they know the full picture of their situation.

[max49]

I think you have to think about how much income you could be receiving once you are fully retired, everyone's personal circumstances are different.

It may be an idea for your colleague to calculate what his outgoing are per month/year the other thing to take into consideration is what you could possibly be doing once you are retired. You could well have the heating on more in the winter, and going out and about could cost money eg. a coffee or meal out, it all adds up. Then add up all income from RM pensions, does he get a 60 pension from RM and/or any other pensions? Then include what he would get from his potential state pension, remember he will be taxed at 20% on any income over the personal allowance which is £12570. This could give your colleague an idea of what his income could be after retiring from RM This could help as to which pension option is best for him, each person's circumstances are different and what may suit one person may not be the best option for someone else.

The other point to remember is if you take the cash balance separately from your pension or remaining cash balance if you take some to fund the lump sum, 25% is tax free and then the rest is taxed. Depending what his RM wages are plus any other income such as pensions, some of the cash balance could be taxed at a higher rate.

Here is a link to check your state pension forecast
https://www.gov.uk/check-state-pension