Taking tax free allowance and buying a motorhome.

KTMlad70

At around 58 years of age (55 just now) I'll have about £300,000 in my only pension pot. 
If I take the 25% tax free, £75k & spend it all on a new campervan / motorhome would this be really stupid?
Yes it probably is but you only have 1 life & I want to make the most of what years I have left.

I currently earn around £90k & just over £2k a months goes to my pension as a salary sacrifice but I will put more in when out mortgage is finished (less than 30 months).
I intend to keep working until I'm 67 if I'm fit & healthy enough. 

Has anyone on here cashed in their 25% & bought a van?    Good?  Bad? Worse decision ever?
Please tell  

Cobbler_tone

Sounds like a great plan to me! Exactly how to 'blow' your TFLS, although unless you have experience I'd probably rent one first.

The sensible answer of course is that it introduces risk if you weren't able to work to 67, or lost your job....however, you are mixing with the seriously risk adverse coming on here! 
It's a long way off to 67, so you could wave a finger in the air and project your revised pension and importantly your anticipated needs. You might want to replace that campervan by then.

....and definitely YOLO!

Marcon

You've made your decision and other people's experiences aren't relevant or helpful, so why ask? This could turn into another of those long threads with no real purpose. Buy and enjoy - the things in life we really regret are the things we don't do.

SVaz

Well decent motorhomes keep their value well and if you need to sell then you can,  fine if you’re going to use it regularly too.  My neighbour’s camper spends all but 4 weeks a year stuck on their drive, seems pointless,  I’d rather rent one. 

Better than spending it on a World cruise where you’ll be left with only pictures and videos you’ll never look at again.

singhini

Spend it on whatever you want. i bought a Mercedes R107 500SL

I funded my car by increasing pension contributions (i was putting £2k a month into work pension leaving me about £65k taxable salary. that meant my take home was around £48k with £17k paid in tax). i thought !!!!!! paying £17k in tax, im going to claw some of that money back!

So i used to live off £20k and stick £28k into a SIPP (SiPP company claims £7k and i would do self-assessment and also claim back £7k [usually as a cheque posted to me by HMRC).

 Roughly 4 years of claiming £7k bought me the car (£28k) and the SIPP had £140k which will be used to enjoy the car in my retirement. 
Happy days!!!

Grumpy_chap

KTMlad70 said:

At around 58 years of age (55 just now) I'll have about £300,000 in my only pension pot. 
If I take the 25% tax free, £75k & spend it all on a new campervan / motorhome would this be really stupid?
Yes it probably is but you only have 1 life & I want to make the most of what years I have left.

I currently earn around £90k & just over £2k a months goes to my pension as a salary sacrifice but I will put more in when out mortgage is finished (less than 30 months).
I intend to keep working until I'm 67 if I'm fit & healthy enough. 

Has anyone on here cashed in their 25% & bought a van?    Good?  Bad? Worse decision ever?
Please tell  

If you are earning £90k per year with only £24k per year going into pension and expect to have £225k pension fund after the camper van, how do you plan to fund your retirement to a standard comparable to that you enjoy whilst working?

If you buy the camper van age 58 and then work until age 67, how will you have the time to make good use of the camper van in the first 9 years of ownership?

molerat

^^ Thinking the same, to achieve a lifestyle anything close to what is currently enjoyed I would expect to need a pot of at least 5 times that,  a 4% drawdown rate would give an income of £9K !

Albermarle

I was thinking the same as the above two posts.

What you should do is work out what income you think you will need in retirement.
At 67 , you will get the state pension, so you can take that into account and see how much income your pension pot will generate, assuming of course you can keep filling it up at the same rate.
Then see if there is a significant gap between the actual size of the pension pot, and what is needed.
Maybe if you intend to have only a modest income when retired, then there will not be an issue.

Marcon

molerat said:

^^ Thinking the same, to achieve a lifestyle anything close to what is currently enjoyed I would expect to need a pot of at least 5 times that,  a 4% drawdown rate would give an income of £9K !

Not really worth posting. OP is looking for endorsements, not a reality check 

ian16527

SVaz said:

Well decent motorhomes keep their value well and if you need to sell then you can,  fine if you’re going to use it regularly too.  My neighbour’s camper spends all but 4 weeks a year stuck on their drive, seems pointless,  I’d rather rent one. 

Better than spending it on a World cruise where you’ll be left with only pictures and videos you’ll never look at again.

If you bought pre covid/ up till 2022 then the value paid will be about the same or just slightly lower 

Currently, the market has revalued and values have dropped to more realistic figures, although the price for a new MH/PVC  are still about 50% up on those prices pre covid. 

ian16527

I did it, but not until I took early retirement. It was always the plan.

I calculated a MH purchase of a certain value in my retirement spreadsheets. Covid unfortunately scuppered that as prices went up dramatically so I could only afford an older one.

I have just traded in and bought a new camper van as we liked it so much but also as my wife has had cancer treatment this year so thought lets go for it now while we can. 

But if you do this you will loose out on future growth of the TFLS so make sure you calculate it all out with a bit of a safety factor. If things go wrong you can always sell it, obviously at a loss.

Bear in mind they are made out of tissue paper and things break often. Security is an issue and ongoing yearly costs can mount up