31 Aug

Pension pots to cover mortgages

Pension pots to cover mortgages

Many people are planning to pay off their outstanding mortgages using their pension funds, according to new research.

Financial firm Paternership estimates that around 631,000 Brits plan to use some or all of their pension pots to pay their off their mortgage.

A total of 71 per cent of mortgage holders aged between 40 and 70 plan to continue meet their monthly payments, 25 per cent plan to make additional lump sum repayments and nine per cent want to use their retirement funds to repay their mortgage.

Eight per cent plan to use inheritance to pay their property loan, while worryingly seven per cent do not have any idea how they plan to pay their mortgage off.

"While it is still shocking that over half a million people in the UK intend to use all or part of their retirement savings to repay their mortgage, it has fallen from over a million in 2014," said Andrew Megson, managing director of retirement at the firm.

"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," he added.ADNFCR-1222-ID-801799317-ADNFCR

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