Equity Release or Re-Mortgage to fund retirement?

bostonerimus

kidmugsy wrote: »

I don't see what your problem is. You need £12k p.a. You already get £6k p.a. from an NHS pension, so you need around another £6k (is that the £7k you mention?). You have £120k in private pension and ISA - so draw £6k or £7k p.a. from those for six years. Be sure to do it in a way that exploits your Personal Allowance against income tax. Problem not so much solved as shown to be non-existent.

Excellent point! I'd still keep the 50k in savings in some sort of savings bond ladder to be ultra safe, but use drawdown from the personal pension in good years to fill up the personal allowance in the 6 low income years.

Kynthia

AnotherJoe wrote: »

You might "like" to retire early but so would many, whats so special about you? I'd have "liked" to retire 6 years earlier than i did but the finances didn't work for that, so I didn't.

I'm sorry that men arent being forced to work 5 years longer than you to enable you to retire 5 years earlier than them, even though they die earlier .... errrm upon very short reflection, I'm not sorry.

You didn't save enough, you didn't plan enough. Chickens coming home to roost.
Do one or more of;


C) Get another job, or stay in current one, or go part time in current one.
D) Downsize.
E) Move to a cheaper area.
F) Save more into pension.

Wow, someone has a temper. Do you react to people like that in real life or just from behind a keyboard?

OP you seem young for equity release. It's generally considered an option when older but there are mortgage brokers who could tell you more if you wanted. Borrowing with the aim of repaying once you get your state pension or using your pension pots is more typical.

marlot

ashpan wrote: »

...
i have £500 pcm coming in from my nhs pension, £50k in savings and £120k in private pension/ISAs...

You say you're looking for £1000pm. You already have £500pm, so is it simply a case of drawing down from the private pension or ISAs?


£500 x 12 months x 6 years = £36k, so you seem to have enough.

xylophone

Why would you consider equity release when you have a personal pension and savings to tide you over until SPA?

Have you obtained a new state pension statement?

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

Spreadsheetman

Have you checked your projected state pension amount?

If it is the full amount (or close) then you have £170k to bridge 6 years at a £6k pa spend rate, or £36k spend total. Once the SP comes on stream then all the remaining is savings that does not need to be touched unless required.

I don't see an issue that need involve loans or mortgages to enable immediate retirement?

A strategic property downsize, or move to a lower cost of living area may still be an idea, but it doesn't look like a pressing issue at all.

DairyQueen

AnotherJoe wrote: »

You might "like" to retire early but so would many, whats so special about you? I'd have "liked" to retire 6 years earlier than i did but the finances didn't work for that, so I didn't.

I'm sorry that men arent being forced to work 5 years longer than you to enable you to retire 5 years earlier than them, even though they die earlier .... errrm upon very short reflection, I'm not sorry.

You didn't save enough, you didn't plan enough. Chickens coming home to roost.
Do one or more of;


C) Get another job, or stay in current one, or go part time in current one.
D) Downsize.
E) Move to a cheaper area.
F) Save more into pension.

Perhaps you would have responded differently had the opening post been framed something like.... "would like to retire at 60 (next month) but thanks to having been paid less than male colleagues ..." or "... thanks to having taken time out to raise children ..." or "thanks to having compromised my career to care for elderly parents ...".

Are you prepared to throw your toys out of the cot in support of (the majority of) women who receive less pension than men because of gender inequality?

SP age will shortly equalise. The same is not true of pay and pension provision. Life's a bummer, then you die.

I'm sure I hold unpopular, irrational or uninformed opinions on a variety of subjects. I'm sure you do too. Whether the OP supports 'you know what' ('W' word omitted to avoid this thread appearing in search results) is incidental to her post. She is not suggesting anything unlawful or immoral. She is not seeking ways to play the system or exploit taxpayers. Plenty of those on here. Lighten up AJ. Have a beer:beer:

OP: you have received some great advice from well-informed contributors. Hope you haven't been deterred from the forum by AJ's temper trantrum. Perhaps he had a bad day. For the record, you have had over twenty years to plan for SP age equalisation and morally, IMO, that legislation was a no-brainer.

DairyQueen

BTW...

Don't forget inflation in your financial plan. £1000 p.m. spends will rise every year. You will need more income than your (current) £12k p.a. Chances are that your cash savings won't maintain value in real terms, and that you will need to draw more than £6k p.a. from savings year-on-year to meet the deficit. Plenty of scope to address that from other savings.

Spreadsheetman

DairyQueen wrote: »

BTW...

Don't forget inflation in your financial plan. £1000 p.m. spends will rise every year. You will need more income than your (current) £12k p.a. Chances are that your cash savings won't maintain value in real terms, and that you will need to draw more than £6k p.a. from savings year-on-year to meet the deficit. Plenty of scope to address that from other savings.

Yes, at 3% rpi the £6000 has pretty much reached £7000 after 6 years assuming that spending is tracking inflation. Means that £39k-ish rather than £36k would be needed.

Not a big deal in this case given the short bridging period, but illustrates the danger of keeping long-term savings in cash!

Triumph13

Definitely a non-problem. Don't let the anger you clearly feel about the SP age changes (which most on here believe were fair and reasonable) blind you to the obvious answers to your problem.
Get an SP forecast, if you haven't already, and if it's below full new SP then pay any voluntary NICs needed to get up to full £8,500 pa. Added to your £6k NHS pension that's £14.5k or £1,164 per month vs your required £1k. Replacing that extra £664 per month for 6 years costs you £48k which should largely come from your private pensions to take advantage of the fact that these are the last 6 years you will have unused PA.
Of your combined £170k in pensions / ISAs / Savings you should still have north of £100k after this bridging and voluntary NICs, from which you could probably take another £300 or so a month in sustainable drawdown and presumably with very little tax (depending on the current split between ISAs and Pensions).
The bottom line is yes you can retire now and you can afford to spend something close to £1,500 pm not £1k. No you don't need to equity release or remortgage to do this.

Mrs_pbradley936

I cannot help in terms of knowing anything about investments/pensions etc BUT my sister-in-law did equity release and they exhaust every other avenue of income before they let you do it. There are at least two interviews a month apart and it is quite an involved process. They gave her £50K on a house valued at £299K - she only wanted £20K but they authorised the extra £30K so that she would not have to go through all the paperwork again for a bit more. If she does not touch the additional money it will be as if never asked for it.

She is OK in terms of monthly income but would struggle if she needed a new boiler or washing machine etc.

She found her people via Saga.