Conundrum - what would you do?

HappyJnP

We are about to complete on a remortgage fixed for 5 yrs, 260k
We suddenly have 25k cash available should we
A) make a 1 off payment to reduce mortgage ( have checked and mortgage will accept overpayments)
make a 1 off payment into a new pension and hence get 25% uplift, or,
C) some other wise way to use it. Maybe half of each above or isa or ,....
We would welcome your ideas to help us make decision

Background we are 50 and 48 y.o.
One has reasonable pensions with some DC and some DB schemes. Currently worth approx 350k total. Inclined to go for drawdown on DC pensions without taking initial tax free sum, so that after retirement healthy income withithout too much tax as each drawdown element should contain 25% tax free element. E.g say 20k per year income including state pension should have lowish tax if it includes around 8k as drawdown which includes tax free element. Currently loading DC pension by salary sacrifice of 1200 per month which includes co contribtion.
Other has very little pension, so should probably load that pension instead so we have a more even spread and so similarly can make max use of both our tax benefits.

cloud_dog

HappyJnP wrote: »

We are about to complete on a remortgage fixed for 5 yrs, 260k
We suddenly have 25k cash available should we
A) make a 1 off payment to reduce mortgage ( have checked and mortgage will accept overpayments)
make a 1 off payment into a new pension and hence get 25% uplift, or,
C) some other wise way to use it. Maybe half of each above or isa or ,....
We would welcome your ideas to help us make decision

Background we are 50 and 48 y.o.
One has reasonable pensions with some DC and some DB schemes. Currently worth approx 350k total. Inclined to go for drawdown on DC pensions without taking initial tax free sum, so that after retirement healthy income withithout too much tax as each drawdown element should contain 25% tax free element. E.g say 20k per year income including state pension should have lowish tax if it includes around 8k as drawdown which includes tax free element. Currently loading DC pension by salary sacrifice of 1200 per month which includes co contribtion.
Other has very little pension, so should probably load that pension instead so we have a more even spread and so similarly can make max use of both our tax benefits.

Well I popped over here from the Savings & Investments board and without knowing more and by assuming you have an emergency savings and you don't have an immediate or future need to access £25k, I agree you should focus on doing everything you can to bring the other person's pension up to speed.

The phrase you are looking for to describe your drawdown method is 'uncrystalised withdrawal', UPCLS.

BTW....some people get really pi**ey if you post the same on two boards, not the done thing, what. :eek:

jamesd

The other post is Conundrum.

cloud_dog meant UFPLS.

cloud_dog

I think I was just putting random letters together

atush

Pension.............