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Withdrawing pension

6 replies

Greentreeflowering · 08/06/2024 15:52

Will you withdraw 25% of your pension to pay part of the mortgage and reduce interest? the balance is 300k so not a lot but will keep saving,

What are the implications?

OP posts:
TheOneWithUnagi · 08/06/2024 16:11

Completely depends on your age - how old are you?
There are also annual limits on what you can save once you have started drawing some pension.

Greentreeflowering · 08/06/2024 16:13

DH, 59. £300k pot

OP posts:
Gazelda · 08/06/2024 16:19

How big is the mortgage? What term is left? What alternative options are there to pay it off?

TheOneWithUnagi · 08/06/2024 16:23

You could take 25% tax free at 59 (as long as his scheme allows you to take at that age) so £75k.
My understanding is that as long as you are purely touching the tax free amount it doesn't then impact the amount you can put into your pension each year. But if you take too much then I think your annual allowance you can save in decreases to about £10k a year.
I'd recommend proper financial advice before going ahead though.

Tearsofthemushroom · 08/06/2024 19:03

You can only take the 25% once so if the pension was to continue to grow for the next eight years then you would be able to withdraw a greater amount tax free than if you take the 25% now.

Greentreeflowering · 08/06/2024 21:12

Tearsofthemushroom · 08/06/2024 19:03

You can only take the 25% once so if the pension was to continue to grow for the next eight years then you would be able to withdraw a greater amount tax free than if you take the 25% now.

this is helpful to know so it is not an option then,

thank you

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