To withdraw 25% of pension to pay part of the mortgage?

55 replies

Greentreeflowering · 08/06/2024 16:10

Total funds 300k, 59 years. Will you withdraw 25% of your pension to reduce interest? What are the implications?

OP posts:

Travellinggirly · 08/06/2024 16:17

Yes you can take 25% as tax free cash but then the remaining 75% will be taxable.
I guess it depends if reducing your mortgage will make a big difference to your life? If your on a low interest rate and repayments are affordable then no I wouldn’t. If you have very little disposable income currently and it would free up some money to enjoy life more then yes I would.

Abitorangelooking · 08/06/2024 16:15

I mean obviously you will get less money each month in the long term. I have to admit it is my plan too. I overpay my pension so I don’t end up in higher rate tax bracket. Then I will take the 25% which I’ve earmarked for Kids uni support fund as my mortgage will be paid off by then.

rubyslippers · 08/06/2024 16:13

Nope

Bignanna · 08/06/2024 16:13

VickyEadieofThigh · 08/06/2024 16:12

Absolutely not. You'd pay tax on it for one thing.

Thought you can withdraw 25% without paying interest?

VickyEadieofThigh · 08/06/2024 16:12

Absolutely not. You'd pay tax on it for one thing.

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