Hi there,
I'm 50 later this year and I have a pension with a previous employer who ceased trading, therefore I could take early retirement and use the 25% tax free lump sum instead of topping up my mortgage for some home refurbishments which I'm about to do.
Im in fulltime employment at the moment with another company, and I pay 5% of salary plus 5% Employers contributions into another pension scheme.
I'm wondering which is most sensible - take the lump sum and cover the pension to an ARF or simply top up my mortgage.
If I took early retirement on that pension, I'd intend to use the payments which I'd have been making on the increased mortgage as AVCs into my current employees pension scheme.
My current mortgage will be paid off in 9 years, but if I top up, I'd be rescheduling it to 15 years to keep payments relatively low.
I look at this as a use of accessible cash now, and I use the cash spared on the mortgage as AVC, so in the event of any problems down the line, my mortgage remains small, and I could stop AVCs for a while. Otherwise my mortgage payments increase, admittedly with access at any time to enacting the pension.
Which is the wisest option?
I'm 50 later this year and I have a pension with a previous employer who ceased trading, therefore I could take early retirement and use the 25% tax free lump sum instead of topping up my mortgage for some home refurbishments which I'm about to do.
Im in fulltime employment at the moment with another company, and I pay 5% of salary plus 5% Employers contributions into another pension scheme.
I'm wondering which is most sensible - take the lump sum and cover the pension to an ARF or simply top up my mortgage.
If I took early retirement on that pension, I'd intend to use the payments which I'd have been making on the increased mortgage as AVCs into my current employees pension scheme.
My current mortgage will be paid off in 9 years, but if I top up, I'd be rescheduling it to 15 years to keep payments relatively low.
I look at this as a use of accessible cash now, and I use the cash spared on the mortgage as AVC, so in the event of any problems down the line, my mortgage remains small, and I could stop AVCs for a while. Otherwise my mortgage payments increase, admittedly with access at any time to enacting the pension.
Which is the wisest option?