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Using a pension to pay off mortgage - AVC tax advantages?
Orangentangent
Posts: 1 Newbie
I have 15.5 years left to run of a 75% LTV mortgage ( £82,759 on flat worth £110,000).
As a 49yo divorcee emerging from a "financially constrained" situation I have been paying only interest towards the mortgage, which I took it out 3 years ago.
I told the bank then that my pension will be the repayment vehicle, which they accepted. However, this is not formally a pension mortgage.
Life has almost settled down so I am looking now to ensure I can pay off the mortgage at the end of its term.
Given the relaxation of pension law from April 2015, when anyone will be able to take out as much as they like from their pension pot any time after age 55 (subject to some tax regs):
As a higher rate tax payer, is it possible (or prudent) for me to put AVCs into my pension to take advantage of the associated tax relief?
Or is it wiser to fund another type of repayment vehicle (or repayment mortgage) with my [taxed] income?
As a 49yo divorcee emerging from a "financially constrained" situation I have been paying only interest towards the mortgage, which I took it out 3 years ago.
I told the bank then that my pension will be the repayment vehicle, which they accepted. However, this is not formally a pension mortgage.
Life has almost settled down so I am looking now to ensure I can pay off the mortgage at the end of its term.
Given the relaxation of pension law from April 2015, when anyone will be able to take out as much as they like from their pension pot any time after age 55 (subject to some tax regs):
As a higher rate tax payer, is it possible (or prudent) for me to put AVCs into my pension to take advantage of the associated tax relief?
Or is it wiser to fund another type of repayment vehicle (or repayment mortgage) with my [taxed] income?
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