Can i cash in my pension to buy a house?
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Using your pension to buy a house Case Study
She explained that she and her husband needed to raise as much capital as possible for a deposit on a house. They had a £10,000 payout from a bank charges claim but needed to top this up to give them a sufficient amount to put down as a deposit. Pension Release, otherwise known as Pension Unlocking, seemed to offer the solution for them.
For the couple it was extremely important to get back on the mortgage ladder and own their own home after a period of living in rented accommodation. Helen explained that the couple had invested all previous savings in a business which unfortunately failed and due to other circumstances, were not in a position to borrow money for the deposit.
Taking cash from the pension now in the form of Pension Unlocking or Pension Release, although maybe not the ideal solution, was for them the only real alternative to enable them to meet their objective.
Helen and her husband fully understood that by taking benefits from Helen’s pension early the pension income in retirement would almost certainly be reduced. However, the position they found themselves in meant their retirement fund, for the time being, had become very much a secondary concern.
Once they had sorted out the mortgage and purchased a house, they could then focus their attention to the matter of planning for their retirement. At the time, Helen was aged 51 (the rules at the time allowed access from age 50, they have subsequently changed to age 55) and her husband was only 40, so they still had enough time left between them to accumulate an acceptable retirement fund.
In this instance Pension Unlocking or Pension Release was appropriate for their circumstances. Obviously, had the circumstances been different – had they been older and had less time to rebuild their retirement funds, or had the amount needed led to too large reduction in pension income for example – then this solution would not have been for them.
At Grove Pension Solutions, we look at each case on an individual basis and offer the most appropriate advice for each situation.
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