Tengah,
Good on you, I hope you enjoy the wine and the sights in absolutely any order you want. There are lots of options (we forget inverse commutation too, of 05 - which can be useful if you don't need the money too much, are in poor health and have a much younger partner who would benefit from an extended income stream).
Me though, if I was a 40% payer at 65, I'd opt for "a bird in the hand is worth two in the bush", take the state money as soon as possible and go for 40% tax relief. I suppose a lot would rest on my health, my view of investment growth, inflation, regulation and legislative change, my personal and financial circumstances and those of my partner. I'm glad it's worked out for you.
Not to be overlooked either, an AFPS scheme member can allocate part (max 37%?) of their pension to a dependant. In return for an immediately lower pension, a nominated dependant (younger partner etc) can receive a higher pension when they die. Nothing in life is free, the actuaries sharpen their quills and many factors determine the amount of your dependent's pension in return for that which you have given up. But it might be estate planning-wise and tax advantageous for some.
In keeping with new civvy legislation, I wonder if '15 allows you to pass that to
any beneficiary though, I wonder of voxpop could help. A useful estate planning tool, especially if benefit crystalisation event guidance can work in your favour. AFPS 15 offers the chance of commuting income at state retirement age for yet another lump sum if that's preferable too.
Enough with pensions already.. it's bank holiday! Enjoy the beach Tengah, Happy Easter and Happy Pension 'Freedom' Day everyone..
Edit: The reason for announcing cutting the state pension age from next year is all too clear. Many basic rate tax payers will become higher rate tax payers when they plunder their personal pensions this year and next. Many would have liked to defer their state pension for a higher later income - and the net result would be to minimise the tax to be paid in the year when they liquidate their pension savings. But cutting the state pension deferral rate, effectively, neuters the benefit of doing so. Fiendishly clever, despicably efficient - and it highlights what pension 'freedom' really is all about. Raising money.