600,000 homeowners to use pensions to pay off mortgage

Over half a million people in the UK intend to use their retirement savings to pay off their mortgage by using either the tax-free 25 per cent lump sum or the entire pension pot, according to specialist insurer Partnership. A survey of 3,000 found one in ten 40 to 70-year-olds – the equivalent of 631,000 adults – plan to use all or part of their pension to help pay down their mortgage debt. Andrew Megson, of Partnership, said that it was concerning that so many people are relying on their pension to pay off their home loan. He commented, “Using their pension may well seem like an option but it is not the only option as working longer, downsizing or considering a lifetime mortgage may be more appropriate.” “Ideally, pension savings should be used to provide an income in retirement, and with the state pension only providing a very basic safety net, making this choice could lead to hardship in later life,” Megson added. Separate figures from the Association of British Insurers (ABI) reveal that pension savers have been withdrawing £27 million a day since the pension freedoms were introduced in April, latest figures from the Association of British Insurers…