Surviving the next 5 years

​Single 50 year old woman.
Property owned outright, recently on the market for £495,000 in order to downsize.
Money purchase pension worth ~£330,000
Savings ~£15,000 and eroding gradually.
No debts.
Self-employed zero hour contract, capped at £1000 per month. Work is dwindling, last month invoice only £250
Current outgoings ~£1500 per month.
So the question is how can I access some of the money in my property or pension on a draw down basis until such time as either the property is sold or I reach 55 and can access my pension please?
best wishes
Naomi.
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  • xylophone
    xylophone Posts: 44,140
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    Are there no job opportunities available at all?

    You can't access your pension (except in case of severe ill health/terminal illness) until you are 55.

    Have you obtained a new state pension statement to help with planning for the future?

    https://www.gov.uk/yourstatepension?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY

    How much capital will you have after you have sold your existing property and bought a new house?
  • ermine
    ermine Posts: 757
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    NaomiP wrote: »

    So the question is how can I access some of the money in my property or pension on a draw down basis until such time as either the property is sold or I reach 55 and can access my pension please?

    Take out a mortgage on your new place, or your old place if you stay. It doesn't have to be for the full monty, only for enough as you need to live on for the five years, so you should have a great LTV. Never pay off your mortgage before you get your pension. clearing it is what your 25% tax-free pension commencement lump sum is for. I screwed up that way too ;)

    Alternatively rent for five years, and run down some of yoru capital. But you are then exposed to variations in house prices across those five years, which can go either way/
  • jamesd
    jamesd Posts: 26,103
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    You can't get at pension money yet and your income situation doesn't seem likely to make a standard mortgage available. That leaves an equity release mortgage as an option without waiting to sell your home. Modern equity release does offer the option to draw down money gradually and to repay if desired.
  • Bravepants
    Bravepants Posts: 1,491
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    It's a personal choice whether you take your 25% tax free lump sum. Sometimes the commutation rates just aren't worth it! It is NOT designed in for paying off your mortgage, although I guess a lot of people do. I would think carefully and get figures for remaining annual pension before you consider this as part of your plan.
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
  • mark1959
    mark1959 Posts: 553
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    Get a better paid job.
  • fcandmp
    fcandmp Posts: 153
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    What about renting a room? Can earn up to £7000 per year tax free. Not for everybody, but could be attractive income option.
  • jamesd
    jamesd Posts: 26,103
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    edited 11 March 2017 at 1:21AM
    Bravepants wrote: »
    It's a personal choice whether you take your 25% tax free lump sum. Sometimes the commutation rates just aren't worth it! It is NOT designed in for paying off your mortgage, although I guess a lot of people do. I would think carefully and get figures for remaining annual pension before you consider this as part of your plan.
    This is about a money purchase pension. There is no commutation rate. In general:

    1. For defined contribution always take the maximum tax free lump sum, though not necessarily all at once. If you want guaranteed income, look into deferring your state pension before an annuity unless you have reason to believe your life expectancy is lower than normal, when the annuity might pay more, but buy that with the taxable money, not the tax free part.

    2. For defined benefit don't commute any income into lump sum and don't reverse commute lump sum to buy more than the standard pension. Commutation rates tend to be bad, reverse commutation even worse, "buy" more state pension by deferring that instead.
  • Maybe take in a lodger.
  • AnotherJoe
    AnotherJoe Posts: 19,622
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    edited 11 March 2017 at 5:08PM
    NaomiP wrote: »
    ​Single 50 year old woman.
    Property owned outright, recently on the market for £495,000 in order to downsize.
    Money purchase pension worth ~£330,000
    Savings ~£15,000 and eroding gradually.
    No debts.
    Self-employed zero hour contract, capped at £1000 per month. Work is dwindling, last month invoice only £250
    Current outgoings ~£1500 per month.
    So the question is how can I access some of the money in my property or pension on a draw down basis until such time as either the property is sold or I reach 55 and can access my pension please?
    best wishes
    Naomi.

    You can't.

    Your best bet is both to decrease outgoings (£1500/m is extraordinarily high as a single person) and increase income - lodger or better job.

    If you contemplate that your house will take so long to sell (up to five years!!) that you need to be taking this step of raiding your pension (which you cant do anyway) then you are asking far too much for the house.
  • bigadaj
    bigadaj Posts: 11,531
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    Assuming your income would allow then 0% credit cards might tide you over for a year or two but not likely five.

    Teh simple answer is to reduce the asking price on the house and get it sold, as well as belt tightening of course.

    Also check your entitlement to benefits such as council tax relief, tax credits etc
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