Funding new house

2koolkatz

I currently own my own house, having been mortgage free for the past 10 years. Both my wife and I are retired with reasonable pensions and savings. I also have a Prudential drawdown pension that I payed a forces pension into. However, I haven't touched this yet.

We are now considering moving closer to my daughter but houses are generally more expensive in her area so will need to find at another £50k - £70k. We have this in stocks and shares ISA's but I am wondering another option would be to start taking some of my Prudential pension and use it to take out a small mortgage to fund the extra needed. I would obviously pay tax on it but I will whenever I choose to take it.

The other options are to take the lump sum from my Prudential pension (around £20k) to either reduce the amount I take from my ISA's or reduce the size of any top up mortgage. Any advice appreciated.

Albermarle

Without knowing your full circumstances it would seem a good idea to at least take the tax free cash from the drawdown pension. If you take then taxable income, be careful it does not push you into a higher tax band.

One point you might not be aware of, is that when you want to start drawing down your Pru pension, they will probably insist on you taking advice from one of their in house advisors at a cost of 3% of your fund. The normal recommendation is to transfer the pension pot out to another provider before starting drawdown.

Their customer service has a pretty poor reputation as well.

2koolkatz

Thanks for that. I think I may take the lump sum in the first instance and take it from there. I will certainly ensure that whatever I take from the pension does not push me into the higher tax bracket.

Thanks for the heads up on the customer service as well.