Can I cash in my
pension to pay off
my mortgage?

Should I cash in my pension to pay off my mortgage?

If you are aged 55+ and have a personal or company pension you are not currently paying into or receiving,
you can cash in 100% of your pension as a lump sum to reduce or pay off your mortgage – up to 25% Tax Free*

The question you need to ask yourself though is, should you? The short answer is probably not, however, read on to find out more:

Using your pension to pay off your mortgage

The introduction of Pension Freedom in 2015 allows people to access their pension funds early and use the cash to pay off mortgages. A recent study showed that 14% of over 55’s had mortgage debts.

Mortgages are normally the biggest debt people have at retirement. Many people feel it would be best to reduce their monthly out goings in retirement and pay off their mortgage by taking a 25% tax free cash lump sum from their pension pots. However it isn’t as simple as that and you need to consider your options carefully before paying off your mortgage with cash released from your pension.

Requirements:

  • You need to be age 55 or over.
  • You need a Personal Pension or Company Pension you are not longer paying into or taking. These can be Defined Contribution Pensions, Defined Benefit Pensions & Local Government Pension Schemes.
  • You don’t actually have to be retired and can continue to work.

Considerations:

Points to consider when using cash from your pension to pay off your mortgage:

  • Mortgage Interest Rate – if you have a very low interest rate, it’s probably better you leave your cash in your pension because of the benefits it provides; especially if your pension fund growth is bigger than the mortgage interest rate.
  • Amount of mortgage outstanding – will the 25% tax free lump sum from your pension cover your outstanding mortgage? If it’s more, then you will need to pay tax on any additional cash released from your pension, which probably doesn’t make financial sense.
  • Will your pension income and benefits be significantly reduce if you release a large cash lump sum from your pension to pay off your mortgage?
  • Would down sizing your home and paying off your mortgage with the cash released from the sale be a better option?

Risk:

Taking cash out of your pension early to pay off your mortgage will almost certainly reduce your pension income in retirement and for most people wouldn’t be suitable, however, every case has to be treated individually and analysed. A professional adviser who specialises in pension transfers can “crunch the numbers” and work out what is best for you.

If you have a defined benefit pension, it is worth remembering that the regulator, the Financial Conduct Authority, states releasing money early from these types of scheme is probably not in your best interest.

Take SPECIALIST FCA Regulated Advice

If your pension pot is worth £30,000 or more you need to take specialist advice from a FCA regulated firm, such as ourselves, before you transfer or cash in your pension.

As part of our specialist FCA regulated pension transfer advice we will carry out a full fact find on all your pensions, their values, their retirement benefits and your current financial situation. Once we have all this information we will provide our recommendations whether you would be better off cashing in your pension to pay off your mortgage or not.

It’s free to find out your options. Which option is best for you depends on your circumstances. We guarantee that we will present you with a clear set of recommendations in plain English, only advising you to release cash from your pension to pay off your mortgage if we believe it’s in your best interest.

You are under no obligation to proceed with any of our recommendation if you don’t want to and it will not cost you anything to find out if we can help you.

WARNING

This service only applies to pensions in the UK.

Taking benefits early will almost certainly reduce your pension income in retirement and is only suitable for a limited number of people and circumstances. This should not be seen as an easy option for raising cash.

If you release all your money from your pension early you will not have anything left to provide you with income in retirement.

Need advice on how to access your pension to pay off your mortgage?

It’s free to find out your options 

Grove Pension Solutions Ltd is regulated by the Financial Conduct Authority.

We are financial advisers specialising in helping people transfer or cash in their pensions to pay off their mortgage and have been doing so since 2007, long before the Pension Freedom changes came into effect.

We have provided professional advice to thousands of people over the years.

Our service allows you to evaluate your Pension Freedom options without paying a penny. It’s only if you decide to go ahead with releasing all or part of your pension pot that you pay a fee. You are under no obligation to go ahead if you don’t want to.

So why not Get Started Today and receive your free Information Pack.

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Testimonials

Grove made all aspects of the pension release process very clear and precise, and kept me up to date on what stage my pension unlocking was at. Very professional at all times.

Mrs MR, Glasgow

I thought the process of pension release would be difficult but was made easy to understand by the very helpful staff at Grove.

Mrs KS, Runcorn

I wanted to release some of my pension money ( tax free ). Grove Financial were extremely helpful in every way from start to finish. No problems were encountered throughout. I Would strongly recommend them, many thanks.

Mr DS, Swindon

A very clear, understandable and efficient service. All staff were friendly and knowledgeable.

Mr RP, Sheffield

Very helpful & informative staff who understood my situation & why I had to release funds. I was informed that it could be a bad decision to proceed & was put under pressure not to, which doesn’t make sense as Grove wouldn’t make any money.

Mr PB, Chelmsford

I would recommend your services to anyone. A good job well done. Thanks.

Mr SM, Nottingham

I found your service to be very professional. The people I had contact with were very patient and understanding.

Mr DW, Bradford

The people who dealt with my case were very helpful & non judgmental about the reasons why I wanted the case payout. Everything was explained to me thoroughly and the risks highlighted. Although this course of action is not for everyone, it has been a lifesaver for me. Thank You.

Mrs CS, Telford

Very helpful. Explained in detail, answered all my questions. Would recommend to family and friends. Excellent services.

Mr SS, Cheltenham

GROVE SUPPORTED CHARITIES

Grove actively support the following charities and institutions

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Bromley Mencap
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