To Pay off Mortgage Y/N?.

billesniper

getmore4less wrote: »

I think yOu are missing the point if you won't be able to save more than the cash ISA limits then you don't need keep some of the ISA savings back.


on the pension lump sum it is down to the costs of converting pension into lumps sum(that you don't seem to need) and life expectancy.

for every £1000 lump sum how much pension do you lose.

I wish you had not brought up life expectancy , because I have Multiple Sclerosis (I'm covered with a permanent health insurance, which is paid to my employer who administers the tax and national insurance) and that is one of the reasons my Wife wanted us to pay off the Mortgage so that would be one thing less for her to worry about should the worse happen, I'm covered by life insurance until I reach retirement age.
You are right in what you say I'm sure but I do wish to keep my wife happy.

billesniper

RenovationMan wrote: »

You could always take the 25% tax free lump sum from your pension and use it to pay off your mortgage, leaving your ISAs alone. This would effectively mean you are removing your 25% tax free lump sum and putting it into a tax free investment, something you'd struggle to do if you have a large pension pot given the relatively small limits on payments into S&S ISAs.

For example, I plan to have a 300k pension pot and so a 25% withdrawal would net me 75k. With current limits for ISAs set to 10.5k it would be 7 years before I could put my tax free money away from the tax man. However, if I had a 75k mortgage debt and 75k in ISA savings, I could keep the ISA savings and use the pension lump sum to pay off my mortgage. The net result is that I am now mortgage free and I have 75k of tax free savings.

Something to think about if you are considering removing the 25% lump sum.

Thanks for that and you are right as well, but please read my other post and it will save me having to write it out all over again.
Regards.
Bill.