Re pension vs new house/mortgae

Jodu

Hi
We are in a bit of a dilemma. We are both around the age of 50 and have recieved a lump sum of £100,000. We are mortgage free but have the opportunity to buy a new dream house. We are unsure if it is wise to use the lump sum to buy the house - this would mean we have my pension ( teachers pension ) and what ever the state pension is plus our property. We have 3 rental from which my partner draws down an income each month. She also works for the NHS. But will recieve only a small pension from them.
So the question is .... Do we invest the lumps sum in the new property to live in or do we place it in a pension fund or is there another option we haven't thought about?
Help!

jamesd

You need to work out what income you think that you will need, including any increase in expenses from the dream house. £100,000 is worth something in the region of £4000 to £5,000 a year of income if planned to last a lifetime, until reaching state pension age. After that deferring the state pension could under current rules increase it to perhaps £5,800 a year. Inflation-linked.

For the rental properties there's the potential issue of mortgage tax relief changes. It's also worth wondering whether selling any of them is wise, since there may be significant capital appreciation locked up in them.

Is 50 really the normal retirement age for your teacher's pension or are you taking it early with a reduction? Someone with more knowledge of the scheme may comment more on this.

justme111

So between you two you have your teachers pension, small partner's NHS pension and rental income from 3 properties?
If so are rental properties mortgaged? Interest only or repayment? At what age will you be able to get your unreduced teachers pension? Will these 2 pensions and rental income be enough to sustain your lifestyle?