Using my pension to buy a house

silverwold

Hello all,

I hope this is the correct forum for this.

I'm in my mid fifties and no longer own my own home due to a divorce and illness. I'm employed, but earn just above the minimum wage, and even if I had a deposit, the new rules make lending beyond retirement age difficult (well, I've found it impossible), which means I have about ten years left to repay.

I do however have a pension worth around 100K, for which I'm very grateful. Even taking 25 percent for a deposit doesn't help me with a mortgage, as the repayments over 10 years are still too high. Around here, I could buy a house with 100K, but I can't take the whole lot as a lump sum because of tax.

To be able to save paying rent would be a great investment (I think). Is there any way I can use this money to achieve this, does anyone know?

dunstonh

To be able to save paying rent would be a great investment (I think).

But losing a chunk of your pension to 40% tax isnt a good way of doing it either.

silverwold

Agreed. I was hoping that there was some way around it, or a way to borrow against it. Also if the 40% tax was taken off, I wouldn't be able to afford to buy. It seems nuts that I have this money but can't buy my own home. I could reinvest the saved rent which over ten years would be roughly £60k.

ajbell

You could take the 25% then drawn down the rest at basic rate. Just enough to pay the mortgage?.

xylophone

https://www.gov.uk/new-state-pension/overview

Have you requested a new state pension statement?

https://www.gov.uk/state-pension-statement

By itself it won't fund luxury living?

Are you contributing to your employer's pension scheme?

kidmugsy

Have you tried National Counties BS?

silverwold

I am contributing, yes.

On balance, I think it would be better to own my own home and be living on a state pension, than owning nothing and using my private pension to pay rent. I may be wrong, but there will be little difference in what I have left to live on with either scenario.

I may be missing something!

silverwold

kidmugsy wrote: »

Have you tried National Counties BS?

No I hadn't, but I've just had a look - very interesting. Even an extra five years would be helpful, but they do take into account income from pension, so I will give them a call. Thanks.

Pincher

Or Housing Co-Op.
Qualify for Right-To-Buy.


In an area where a house can be bought for £100k,
the council might even have housing to spare.


Low income bumps you up the list.