Additional pension purchase - yay or nay?

[rfisher]

I'm likely to retire within the next 4 years.

I could purchase an additional £4250 pension per year for £75,000 lump sum payment.

What's attractive about this is that it's payable after 2 years before age 60 (with minor penalty) as I'm over 55, and fully index linked.

So it would take 20 years to 'get my money back', but it would keep paying until I die.

Obviously, as with all pension planning, a lot of the figures depend on exactly when you die, which is an unknown variable.

So the question for the PH financial gurus is - could I put that £75,000 to better use over the next 20 plus years?

Maybe it would be more productive in a separate SIPP?

Buy a bond?

Buy a Tuscan II convertible, coke and hookers?

Etc.

[rfisher]

Not a lot of interest in this (see what I did there) so I'll widen it out a bit.

What's the consensus on the best way to invest the 25% lump sum that you get when you take your pension?

I'm thinking the 2018 release TVR and more c&h.

Or red at the casino.

No black.

No red.

[rfisher]

Hadn't thought about not taking the lump sum.

Most people I've spoken to seem to be planning to take more than 25% lump sum and have less in pension per month.

I'll have to get the abacus out.

[rfisher]

I'm still thinking about an additional pension purchase.

Would I be able to claim any tax relief on a £75,000 AP lump sum purchase?

[rfisher]

Can you claim tax relief on a proportion up to the equivalent net earnings, if net earnings are less than the £75,000?