Go for index linked income or invest lump sum

A question about : Go for index linked income or invest lump sum

Hi,
I am 55 and about to retire. My final salary pension has a lump sum of Ј50 000, I can take Ј25 000 of this to increase my annual income by Ј2 000- this is index linked. That to me sounds like a good deal!
I Know I am over simplifying things but would investing the lump sum give a better return?

Best answers:

• There is no 100% rule you can apply. Without consideration of other things, the income would be better. However, your tax position, spouse/dependent income, health, your existing capital, your anticipated spending habits etc will all have an impact on whether it is better to take the lump sum or not.
  Quote:
• No way to tell, but as D said in general higher income is better (as it is index linked).
  You really need to take into acct the other things he mentioned (such as any other savings you might have, if you have a spouse who will benefit from the higher pension amt if you die, your LE etc.
• It sounds to be wonderful value. But I suggest that you check whether your widow's pension will be based on the standard pension or on the new increased one.