Ill heath retirement at 43 .....

gwynlas

It depends on where you live as to whether it would be advisable to invest in an airbnb ie rate of return on investment.
Hang on to your current property for the time being even though it is not giving you any income house prices will likely remain  steady at least.
Give it 5 years in current relationship before you consider buying together in order for them to improve their credit rating.
Enjoy the opportunity to take on a less stressful job/grow your business with the cushion of your pension.

Stubod

...generally I would think it always makes more long term financial sense to take the minimum / no lump some. As above the index linking on the full pension over (hopefully) many years will probably be far greater than anything you could generate by (saving)/investing the lump ..IMHO.

starrieshillane

Dazed_and_C0nfused said:

starrieshillane said:

Dazed_and_C0nfused said:

4% gross guaranteed, presumably inflation linked in some way.

3.2% after basic rate tax.

Can you hedge your bets and meet half way by taking a smaller lump

Can you explain the first two parts for me lol . Probably for the same reason they won’t keep me lol ! 

Yes I am willing to do anything , I just want the knowledge that I am making the best decision available if you know what I mean ! 

Cath           

If you were to put £82k in the bank and could get 4% it would give you £3,280/year (£273/month).

£3,280 extra pension would attract basic rate tax of 20% so only £2,624 in your pocket (£2,624 is 3.2% of £82k).

You cannot get 4% interest so what could you do that would guarantee 4%?

I get it , if I didn’t take my commutation it would give me the ‘top up’ income I’m after there or there abouts without all the hard work .... 

minefield - thank you for throwing a different perspective on it 

Albermarle

Another maybe important point , is that these types of pensions ( not sure about the Police one specifically) will pay a reduced pension to a Spouse if the original receiver of the pension dies. In your case it may be worth investigating what happens if there is no spouse. Would it go to a partner ? Maybe there is a provision for dependent children ( under 18) ?You can usually leave an 'expression of wish' but there is no guarantee that it will be followed if it is not in the spirit of the scheme rules.
The scheme will have a rule book and you should be able to enquire directly to the trustees of the scheme.

lulabelle1

Hi, your B2L mortgage payment is quite high (similar amount to the rent you receive). I’m therefore presuming (?) that it’s a repayment mortgage. Have you considered changing it to interest only? IO is fairly common on B2L... with the rent you receive, you could put a small amount aside each month for the tax bill and potential expenses and use the surplus to supplement your pension income? 

I personally would not recommend paying a lump of your pension money off of a B2L mortgage. Could you instead use an amount of the lump sum as a deposit towards a home to live in yourself? Would the mortgage payment potentially be the same (or less) than the rent you are currently paying for the home you live in? 

Good luck with everything. 

Thrugelmir

starrieshillane said:

 My mortgage is  £766 per month , my rental income is £795. It just ticks over as I did not want to sell it when I started a new relationship.

Only the interest element of your mortgage repayment is tax deductible. The capital element isn't. Don't store up problems for the future by not declaring the net income from letting the property to the HMRC. The penalties can mount up and be severe. 

starrieshillane

lulabelle1 said:

Hi, your B2L mortgage payment is quite high (similar amount to the rent you receive). I’m therefore presuming (?) that it’s a repayment mortgage. Have you considered changing it to interest only? IO is fairly common on B2L... with the rent you receive, you could put a small amount aside each month for the tax bill and potential expenses and use the surplus to supplement your pension income? 

I personally would not recommend paying a lump of your pension money off of a B2L mortgage. Could you instead use an amount of the lump sum as a deposit towards a home to live in yourself? Would the mortgage payment potentially be the same (or less) than the rent you are currently paying for the home you live in? 

Good luck with everything. 

Yes it’s a fixed rate mortgage , originally purchased as my home. I have it on a fixed rate until 2023 so can consider IO B2L then 😊

yes ideally it would be a good deposit, but O/H has appalling credit rating due to stupidity, so even being sensible with a purchase isn’t possible at the moment . I would struggle to mortgage as I will be applying as retired / unemployed - but I do need to look into this.

thank you for taking time to read and comment , much appreciated 👌🏻