Why is everyone worried about mortgages but no one worried about pensions?

[Icanstillrecallourlastsummer]

There's numerous threads with people wanting to pay thousands to get out of their mortgages, but noone seems concerned that pension funds are (or were, before urgent intervention from the BoE) on the brink of collapse as result of the mini-budget.

Anyone urgently cashing in on their pensions?

Yes Antelope, that’s why I mentioned specific circumstances.
Make sure you are smart about cashing it in though, do it tax efficiently if you plan to do it at age 55 / are still working, you could find yourself in a higher tax band if you take it all in one lump, stagger it over a few tax years if you can. Also work out whether taking a 25% tax free lump sum is better than taking UFPLS chunks (and vice versa).

@BorgQueen Thanks for the advice, but being in a higher tax band really is not a concern for me. I earn too low and my pension will be small fry. About £5k?

Do you earn over £12570? If you do then you’ll pay tax on the £5k, you can take £1250 tax free then pay 20% on the remaining £3750. £750.
Not worth the hassle of UFPLS as the outcome is the same - £4250 in your hand.

I am just planning on taking out the 25% tax free and continue on paying into the company pension, in order to not trigger the MPAA.

All of my pension is invested ex-UK since 2019 so the pot has only taken a 2% hit.

@BorgQueen Yes I do earn over that and pay basic tax rate.

I think we’re around 15% UK on my SIPP and DH’s 2 Sipps, could be less as I did a lot of juggling/slimlining last year.
DH’s smallest Sipp is around 5% down, it’s 40% bonds but only 2% UK. If US treasuries suffer the same fate then it would be carnage.
Around 4% down as a whole this year on 2021 new investments but still up on older funds as we made massive gains over the last 5 years and I saw which way the wind was blowing and sold off some funds like Scottish Mortgage to go into Global trackers.
Haven’t been so lucky on my investment ISA though , stuck £10k into 2 ‘safe’ (ha) UK bond heavy funds this time last year and saw them tank almost immediately, they are currently down 21%. Only time I’ve ever done a lump sum and not drip fed cash in and it’s bitten me big time, they were making 7% consistently over the previous 5 years. I’ve taken the app off my phone and won’t look at it for a couple of years.

www.ft.com/content/4db2090e-9727-461e-b685-e182cc403a08

This is a good explainer of what's been happening with DB pensions over the last few days.

It's my DH's SIPP comprising of 10 acres of land and a barn, we've raised a £165,000 mortgage on our home to buy it back on the basis we can then take the pension 25% tax free and likely an annuity with the remaining three quarters and I'm now thinking omg imagine if it went though and the SIPP holder Curtis Banks tanked before we withdrew leaving us with a big mortgage, no cash and no pension
Our financial advisor seems useless and we are both ADHD/dyslexic and feeling very out of out comfort zones.

I'm going to start listening to financial podcasts as advised up thread.

That explains it well.

These LDIs sound about as opaque as the Mortgage Backed Securities that led to the last financial crash.

This is when I am grateful we have a family SIPP Trust! Ours is invested in commercial property, and we have just re-let it for the next 10 years. It was started nearly 20 years ago, and the original mortgage was paid off so it's just accruing cash. We're about to re-invest the cash pot against a 15-year plan, and will draw down from the current rental income. The last three years have been a bit of a roller coaster thanks to an insolvent tenant who left the building trashed post-COVID.

My thinking with my SIPP is that it'll cover me between my mid-60's (exactly when depends how much it is), and 68 when I can claim my Teachers Pension. Am I right in thinking that it would be more tax efficient to withdraw my whole pension between the ages of say, 63-68, before the Teachers Pension pays out and I start paying tax on that? So I'd only pay tax on anything I withdrew annually above the personal allowance?

Ive always wanted to speak to a financial advisor about pensions but cannot get any responses when I try to find one. Where do you get financial advice from ?

Ours was a personal recommendation a few years ago but now won't take on new clients and seems to be too busy pushing products to existing clients rather than advising.

Hayleybells - if you use UFPLS for your Sipp you can get about £17k a year out of it tax free.
A 25% tax free lump sum would then mean you are taxed on any income over your personal allowance.
You need to do the maths to see which way is more tax efficient for you, given you are draining your whole pot over a few years.