How to manage pension

DE_612183

why not pay off the mortgage in full and not have to pay any interest on it?

If the mortgage rate is say 4% and the best savings rate is 2% it's a no brainer ( unless you have a early payment charges - but even then if you work out the maths it could still be better in the long run ).

SVaz

The only other option is to sell £150k ( or more) of investments or switch to a short term money market fund and if markets do fall,  take a tax hit as some of it would no longer be tax free.
You need to derisk and ring fence the money anyway if it’s going to be used in the next few years.
Maybe hedge your bets and do it with half the money,  I don’t think switching the whole £600k is a wise move,  that’s potentially a lot of growth to lose plus when would be the time to buy back in?  

DRS1

JDK1971 said:

Linton said:

jimjames said:

Linton said:

There is no way to freeze the £150K value as a TFLS without taking it out of the pension.

I don't understand this. Surely you can sell investments to value of £150k and leave it as cash or money market funds without removing from the pension. The remaining 75% will stay invested and continue to fluctuate

The OP seemed to be worried that if his pension fell in value the 25% of the whole would represent a smaller amount of money.  There is no way around that within the pension.

Yes, that is correct.  You have answered my question really.   

I clearly need to take the 25% TfL’s to guarantee its value. 

ATM I’m still working and the pension pot amount is split across an HL SIPP and an occupational DC scheme with Standard Life which I intend to transfer across to the HL SIPP once I’ve left.


Any advice on how to house the £150k?  Will max ISAs this year and next year in April which leaves £110k to manage.

Thanks again.

Not advice but if you know how much you will need to pay off the mortgage and when you will need it then think about putting the money into a gilt.  There is a list here showing maturity dates
Gilts in Issue - giltsyield.com

The sort of gilt you would want would be a low coupon gilt with a clean price below 100.  TN28 looks a likely candidate (but maybe that matures too late for you?).

You pay income tax on the coupon but the capital gain is free of CGT.