55 in a few weeks taking pension to pay off Mortgage

butler0641

Thanks for your comments. 

From my point of view my pension pot sizes are so small it’s not worth the growth over the next few decades. 

I’d rather pay of the mortgage so if I sell in the future that asset far exceeds all my pots.

 My outgoings are so low I could survive in the future not working  and renting out my spare room, which I get plenty of offers from friends keen to move in and I do have a flat mate at present. 

I guess it’s just mindset differences as a person who has never been a high earner I don’t see the value of a large pension pot when your old. 

eskbanker

butler0641 said:

The other a job I left over 8 years ago. 

My present employer pays into a pension which I am not taking.

So the third pension has only been funded for eight years and you're earning £33K now?  How much income would you expect from it in retirement?

butler0641 said:

being in the fortunate position in owning most of my flat so a good asset in the future for any unforeseen costs.

the last comment about state pension which I will get in full plus the company pension I still have to take and the 4.5k PLUS my property I think will easily cover costs.

If you liquidate this asset, where will you live, or are you anticipating equity release, etc?

butler0641

My present job I have only been in for three years, looking at the growth in that pot it is less than 4k contributions each year. 

Another aspect which contributes to my not conventional thinking is I was born here but I am from the carribean and have family house/s and land over there. I have spent time living in the carribean in the past a number of years so I know what it’s like. 

So my mortgage would have been paid off in under 6 years before this now I can likely do it in under three and put extra income into Isas. 

Brie

How much are you and your employer paying into your work pension now?  Are you willing for a portion being paid in being taxed before it hits your pension pot and then taxed again when you access it?

I'm guessing (as are the rest here I think) that the 2 pensions you are talking about taking are defined contribution plans rather than defined benefit.  You may wish to think about the total value of any DC plan at this time as it will be based on how well (or rather how unwell) the stock market is right now.  It maybe very worthwhile to wait a bit longer for the markets to recover as that should boost the overall pot.  

If either is a DB plan then you will be losing a big chunk simply be taking it before normal retirement age - whatever that is according to the plan.

Marcon

butler0641 said:

My present job I have only been in for three years, looking at the growth in that pot it is less than 4k contributions each year. 

Another aspect which contributes to my not conventional thinking is I was born here but I am from the carribean and have family house/s and land over there. I have spent time living in the carribean in the past a number of years so I know what it’s like. 

So my mortgage would have been paid off in under 6 years before this now I can likely do it in under three and put extra income into Isas. 

Drip feeding relevant facts makes it hard for anyone here to answer as helpfully as they could if they had a full picture of your situation - but I appreciate you may not be quite sure what counts as 'relevant'. If you own a house and land elsewhere, and might decide to move there (where living costs are very different for the UK, I suspect), that certainly does count as relevant.

What is obvious from your responses is that you aren't actually looking for helpful input - just confirmation that your plan is a good idea. The fact nobody has yet agreed that it is suggests you might like to think again, but if - as I suspect - you've already made up your mind, then there's not much anyone here can add.

barnstar2077

Have you tried ringing the mortgage company and asking them what would happen to your payments if you drastically increased the mortgage term instead?

I'm not sure what the age limit would be, but it would be interesting to see how much you would be paying a month if you extended it till you were seventy.  It would decrease your monthly payment without robbing your pension and give you some more breathing room.

I did the same thing and haven't regretted it.

L9XSS

Hi, why don’t you use the “Small pots rule”?
Set up three separate pension pots, 10k in each, withdraw 25% tax free and pay 20% on the remaining. Rough estimate, £25,500 into your bank account to utilise against mortgage or renovations? That way you don’t trigger the MPAA as you stay in the guidelines. I did just this, setting up two separate pots with HL and one with Fidelity. In the end I ownly used two of the pots to pay off my mortgage. I continue to work and pay into my work pension and my (larger) Vanguard SIPP.