Late husband's pension

onthemend

Is the mortgage a fixed rate? if so when does this end?  you can work out if it's best to keep paying until the fixed rate ends, then there shouldn't be a early repayment charge to pay it off.  You should be able to work out if it's cheaper to pay the early repayment charge now, or wait until the fixed rate ends?

Cobbler_tone

topyam said:

Ah it hasn't been easy
Cancer is a horrible illness.
All so sudden too.
Trying my best to understand money, and what's best. 
For some reason, I'm dubious about advisors - got bad advice in the past, and end up a mortgage prisoner for many years, before finally escaping.

Think I'd like to pay the mortgage off - paying a LOT in interest. Paying over £1k a month, and near half that is interest.
Currently looking at whether the mortgage company might waive the Early Repayment Charge (roughly £4.5k) given the circumstances. Has anybody heard of this ever happening?

Should be able to return to work at some point, but not in the foreseeable, as the lids are young and childcare would be a lot.

I can imagine not knowing where to turn if you feel you've had bad advice in the past.

You may read you might not be 'better off' paying your mortgage off....however.
Having a mortgage free home for you and your children must be really important for you. It is not as though you are on a low fix either. I have no experience in them waiving ERC's but if you don't ask...as the next poster said, you may be better to wait until the end of the fix.
It is good that you can see a point when you will be able to re-enter the workplace. Without a mortgage, plenty of money to live on and your associated benefits, I am sure you will be fine financially and can concentrate on raising your children and own wellbeing.
There will be a point when you can build your own pension up too.

DRS1

People talk about you claiming benefits.  I am not sure what those benefits would be but it is worth keeping in mind that you may be better keeping the inherited pension in a pension wrapper rather than taking it out and putting it in a savings account.  I suspect this mainly applies to means tested benefits which you may not be claiming.  Still it may be worth checking if that is relevant to you before making a decision about what to do with the pension you have inherited.

Smudgeismydog

topyam said:

Ah it hasn't been easy
Cancer is a horrible illness.
All so sudden too.
Trying my best to understand money, and what's best. 


Think I'd like to pay the mortgage off - paying a LOT in interest. Paying over £1k a month, and near half that is interest.
Currently looking at whether the mortgage company might waive the Early Repayment Charge (roughly £4.5k) given the circumstances. Has anybody heard of this ever happening?

I’m so sorry topyam,

My husband died when our kids were young and I used the DIS and life cover to pay off the mortgage. When I explained the situation the early repayment fees were waived.

Definitely worth the conversation
x

GunJack

Actually, now there's a bit more info given, as you have so much in savings accounts and the pension is in addition to that, in terms of benefits you may find you have more savings than the UC limit so DWP will expect you to live off the savings before you qualify for benefits. If that's the case then keep the pension as-is.

There was a bereavement benefit that I don't think was means tested, have you investigated that at all?

topyam

I got the bereavement payment.

I don't claim any other benefits.

Thanks for all advice folks - much appreciated!

Going to call the mortgage company tomorrow - paying off the mortgage would be a plan I think. It isn't going away. Really hope they waive the ERC. 

If that was paid off, I wouldn't have many more outgoing bar household expenses.

Just need to try and do my best with the money so I can provide for the kids.

I was never the decision maker really re big decisions so all this is new to me. A lot of pressure to do the right thing. 

GunJack

topyam said:

I got the bereavement payment.

I don't claim any other benefits.

Thanks for all advice folks - much appreciated!

Going to call the mortgage company tomorrow - paying off the mortgage would be a plan I think. It isn't going away. Really hope they waive the ERC. 

If that was paid off, I wouldn't have many more outgoing bar household expenses.

Just need to try and do my best with the money so I can provide for the kids.

I was never the decision maker really re big decisions so all this is new to me. A lot of pressure to do the right thing. 

Good luck with it all, and don't forget to check for a mortgage related life insurance policy, in fact ask the mortgage company when you phone them - it's normally a condition of the mortgage so they should know 🙂

LHW99

Do have a search for any life insurance documents - most mortage providers do expect / commend that when a mortgage is taken out for entirely the reason youhave unfortunately ended up in.

Good luck in sorting things, it's never easy if you haven't been used to doing the money side.

topyam

Got the ERC waived and paid off the mortgage 

In a position where I don't need the pension money niw, but might in the future. Maybe for kids for uni, or to live on down the line....

1. Take it all as cash

Taking it cash free is easy, but obv leaves me to work out how where to put it to get the most out of it...

2. Buy a guaranteed income

Have ruled out buying a guaranteed income i think. More fir somebody older?

3. Transfer it to another provider
I am considering transferring it to an inherited pension / beneficiary drawdown pension.. 
What's everybody's opinion of this? Obv an element of risk. But I can access the £ if needed. And it grows tax free. Would provider fees be big too and negate some benefits?

4. Take a flexible income

I guess the flexible income option means it stays with the current provider, so depends on my thoughts on how good the current pension is? 

topyam

sheramber said:

When my husband dies , after discussion with  a FA I moved my lump sum into flexible drawdown. 

I take a monthly amount but can take any amount I want at any time . I can take less, more or it all at any time. 

As it is a bereavement pension it is non taxable. 

Have you found that this has grown much since moving?