Paying of the Mortgage

magthemum

Just recently had to give up work through ill health, have been thinking about paying of my mortgage with money currently in an ISA as the interest rates are so low. Any advice from anyone and is this really the best thing to do. I'm in a bit of a quandary as it wouldn't leave a lot of savings but it would save around £900 a month.

atush

Have you been to check the benefits you will receive? What age are you? Do you have other savings and investments outside the ISA?

Did you have pensions with your employer? Have you asked for them to be paid under ill health retirement rules?

Plus

What's the interest rate on your mortgage?

magthemum

Apparently I don't qualify for ill health retirement under the scheme, I am 53years old and have been part of the pension scheme for over 25years. I've not looked into benefits as its all still really new to me. Got small amount of savings in my rainy day fund. My mortgage rate is 2.2%

xylophone

Apparently I don't qualify for ill health retirement under the scheme,

Has the reason for this been given?

Reaper

As you say ISA rates are so low I assume it is a savings type ISA you have.

One option is to switch to a stocks and shares ISA in the hope of getting a better return, but you may be risk adverse or feel the markets are currently high and prefer not to.

In the end you have to balance what income you have with your outgoings. That needs to be your priority as you don't want to be eating your way through dwindling savings. If it doesn't add up then you need to reduce your outgoings and/or increase your income.

You should check your mortgage as there may be penalties for paying it off early which may make the decision for you, or you may be limited to overpaying only a certain amount each year.

magthemum

The reasons that have been given are that although I have been assessed as unfit for work, this has been backed up by my employer, gp, consultant and OH, according to the pensions people I may be fit for work before I reach retirement age of 60

xylophone

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/ill-health

See above.

If you cannot take the pension on ill health grounds, it may be possible to take it after you reach 55 on an actuarially reduced basis?

Are you eligible for PIP/ESA?

You/your spouse might consider holding a decent emergency fund in interest paying current accounts/making a partial repayment on the mortgage/transferring cash ISA to stocks and shares and taking the natural yield to support income?