Mel Kenny, and independent Financial planner with Radcliffe & Newlands in the City of London replies: It is a good deal, but whether it is right for you depends on your need for a certain income versus your need for capital in future.
Payable for the rest of your life, this pension translates to an index-linked annuity rate of 7.1%. This is roughly double what you can currently get on the open market.
However, you will need to live for about 12 years to break even, so if you are in poor health it might not be right for you.
Also, if you want access to or want to bequeath the capital, you will need to consider other options.
This Ask an Expert question originally appeared in Financial Mail
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