Has anyone planned on using pension lump sum to be mortgage free?

Just curious as to people’s thoughts on this? Rather than focus on paying mortgage off now, maximising pension input to then use a much bigger lump sum to become mortgage free when needed/decided? 


  • I think it is a valuable thought and a lot of people in hindsight wished they had paid more into their pension as ultimately that will give them a better retirement. It is a personal decision ultimately.
    2017 - mortgage of £140,000 and interest rate of £10 a day
    Feb 2021 mortgage of £103000
    May 2021 mortgage of £100000
    July 2021 mortgage of £97000
    November 2021 mortgage of £93000
    July 2022 mortgage of £84000
    December 2022 mortgage of £79000
    December 2023 mortgage of £73000
  • Archie_Duke
    Archie_Duke Posts: 285
    First Anniversary First Post Name Dropper Combo Breaker
    @IAMIAM I’m in the position of having recently had my Armed Forces pension lump sum paid. I’ve also been steadily saving into an offset mortgage (in lieu of being able to add much into the pension due to the nature of the AFPS). I have my mortgage debt fully covered in the offset account.
    I do intend to pay off my mortgage as soon as I’m out of the fixed rate penalty period, I can’t really see a downside to doing this. But everyone’s situation is different, what works for me certainly will not for everyone.
  • FtbDreaming
    FtbDreaming Posts: 1,118
    First Anniversary First Post Name Dropper
    I would if it weren’t so far off. I aim to be mortgage free a long time before pension is accessible but if there was an overlap I’d definitely put more into pension the pay off mortgage with lump sum. 
    Mortgage started August 2020 £69,700
    Mortgage ends Aug 2050 MFW: Aug 2027 
    Current Balance: £60,700
    MFW2020 #156 £723.13
    MFW2021 #26 £1184.71
    MFW2022 #11 £197.87
    MFW2023 £785
    MFW 2024 £174.73

    Determined to make it! 
  • I can definitely see the benefits in it, but I'm with @FtbDreaming, I want it cleared long before retirement. Even if I don't make any overpayments, it will be gone by 58 so jo overlap for me. But if I were muh closer I would probably focus on pension fund to use it.
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
  • stuart746
    stuart746 Posts: 66
    First Anniversary Name Dropper First Post
    I’m doing this as both my pension and my wife’s is final salary and career average so we can accurately predict the lump sum amounts at age 60. We are 10 years off and financially see no point paying the  mortgage down with interest rates so low (and fixed for 5 years) and the amount we can invest in the pension due to higher tax rates. If any of these circumstances were different I might look at it differently 
Meet your Ambassadors


  • All Categories
  • 341.4K Banking & Borrowing
  • 249.6K Reduce Debt & Boost Income
  • 449K Spending & Discounts
  • 233.7K Work, Benefits & Business
  • 605.8K Mortgages, Homes & Bills
  • 172.3K Life & Family
  • 246.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards