When does a help to buy isa become not worthwhile?

ValiantSon

thatguyoverthere wrote: »

It's not the question that I have however.

What's the problem with taking 20,000 out of a pension built up over a few years?
I've hopefully still got plenty of years of working life where I'll be forced to pay into pension schemes. And the odds about life expectancy and ever creeping up retirement dates just don't make it seem worth my while to plan for the days where I'm half dead.

When you ask questions on here people will challenge assumptions you have made to try and ensure that any action you take has been fully thought through. If you are going to post questions here then you need to be prepared for that. This is a forum dedicated to financial planning, so people are not going to nod in agreement if they think you are making a mistake.

If you remove £20,000 from your pension then you will significantly reduce the pot that is - hopefully - growing due to the investments made within it. Removing £20,000 will have a dramatic effect on your retirement income. Your state pension will not be enough.

Assuming that you do not have any particular medical issues that reduce your life expectancy, then you can expect to live until your early eighties and quite possibly a lot longer. You have no idea what the rules will be regarding NPA in the future. You will not be "half-dead".

However, you have clearly decided that you are going to do this, so my view that it is an extremely foolish decision is irrelevant. As I've already said, if you won't listen to anyone then go ahead and do it. I have no particular interest beyond common decency whether you live out your retirement in an impoverished state or not.

ashe

Adding 20k to a pension pot later on is not the same as having 20k in a pension pot all that time. That 20k is invested and the returns are invested, if it was that easy everyone would just keep savings accounts and pile pensions up with cash last minute

Mortgage_Adviser

I am a bit worried here that OP is young but is able to take money of the pension pot.

OP, how is it exactly you will be takign the money out of pension whilst young? You have not been approached by some of the scammy firms who offer you to withdraw the money of your pension now?
You may end up getting a few thousand but losing a pot worth tens of thousands.and also getting involved in something illegal.

Caz3121

55% tax to pay on the pension if under 55 years old! (and probably a % to the 'advisor' also)
https://www.fca.org.uk/scamsmart/early-pension-release-scams

thatguyoverthere

Mortgage_Adviser wrote: »

I am a bit worried here that OP is young but is able to take money of the pension pot.

OP, how is it exactly you will be takign the money out of pension whilst young? You have not been approached by some of the scammy firms who offer you to withdraw the money of your pension now?
You may end up getting a few thousand but losing a pot worth tens of thousands.and also getting involved in something illegal.

No. Its specifically in the rules of the pension scheme that withdrawals can be made for the purposes of encouraging home ownership.
No third parties seem to be involved except the bank I'll be using for property buying. Its all via my company pension scheme, and proof needs to be provided that this is only for the purposes of buying a home that I intend to use as my primary residence, that this can be done.


As said though this is not the primary focus of what I'm wondering. Upon checking I may not actually be able to do it if I switch jobs before I find a property worth buying (which sucks. The money is forever out of reach )

The pension side of things is not something I have thought much about and my buying a property isn't resting on this going through or not. Afterall I'm only talking 20k here.

It will be taxed but I'm pretty sure not at 55%. The money is in Switzerland where my yearly income isn't in the higher tax brackets.