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Withdrawing some pension to pay off some mortgage
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stuarteyles
Posts: 2 Newbie
Due to a recent change in my personal life and having to take out a new 18 year mortgage 12 months ago when I was 54 I'm left with the daunting thought of having to work beyond my 70th birthday. With this in mind I aim to clear my mortgage as soon as possible but within 10 years by making overpayments. My plan was to make overpayments each month of around £250 which I can easily afford. I'm also considering withdrawing some of my personal pension to pay off the maximum overpayment I can without incurring any penalties from my building society (I'm locked in until December 2025). This would be around £24,000 from my current pension pot which has a value of around £133,000. What are peoples thought's on my plan regarding the pension funds?
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What will you live on if you reduce the pension pot for so much so early?
Not saying it's the wrong thing to do just that you need to do a serious review of what you're money is going to be in 15 years to ensure you have enough.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Don't borrow from your future self. You'll regret it."You've been reading SOS when it's just your clock reading 5:05 "0
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My big concern is that I won't live to regret it !sammyjammy said:Don't borrow from your future self. You'll regret it.1 -
Why not just overpay what you can for now? I also had to get a mortgage late due to change of circumstances. I got a 23yr mortgage upto the age of 70. Like you it created a state of anxiety thinking of the end age. Start with the £250 overpayments and continue to push it up yearly without touching your retirement for some years while you get to grips with the mortgage. Find ways of earning more to overpay until you have brought the mortgage to an age your are happy with? Yes there is a chance you don’t live that long to enjoy the retirement but if you do then there lies the problem.For me since I got the mortgage my overpayment have been more towards bringing the monthly payments down so that if I should need to pay it until I am 70 it will be manageable.It has been 5yrs now since I got the mortgage and with overpayments I can now see more clearly the end date. It’s no longer as daunting as it was at the start.The positive thing is you managed to get the mortgage making your living arrangements more secure.Initial mortgage bal £487.5k, current £258k, target £243,750(halfway!)
Mortgage start date first week of July 2019,
Mortgage term 23yrs(end of June 2042🙇🏽♀️),Target is to pay it off in 10years(by 2030🥳).MFW#10 (2022/23 mfw#34)(2021 mfw#47)(2020 mfw#136)
£12K in 2021 #54 (in 2020 #148)
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To save £100K in 48months start 01/07/2020 Achieved 30/05/2023 👯♀️
Am a single mom of 4.Do not wait to buy a property, Buy a property and wait. 🤓1
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