Pensions
Monthly payments to the lender consist of interest only and the outstanding mortgage remains the same. You make payments to a separate investment with the aim of producing enough capital to repay the mortgage in full at the end of the term. There are a number of different investments that can be used. You can also use a combination of them.
Advantages
Tax relief on contributions.
Part of the fund can be taken as tax-free cash, which is used to repay the mortgage.
Favourable tax treatment of funds
A sum can be built up which can be used to provide an income in retirement.
Disadvantages
The benefits will not be available until age 55 from 2010.
Benefits can normally only be taken between ages 50 and 75
The amount of tax-free cash you can take is limited by legislation.
Using the tax-free cash to repay your mortgage will reduce your pensions benefits.
As the pension is designed primarily to produce income in retirement you will need to actively monitor any targeted cash amount to repay your mortgage.
There is a tax relievable limit on pension contributions.
Remember that if you access your tax free cash early, the benefits will be less than if you wait until your planned retirement age. Therefore pension release may only suit a limited number of people.
All our advisors at MLM are trained to the highest standard possible to ensure they are able to find the most suitable deal for your financial circumstances.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The information on this website is for the use of residents of the United Kingdom only. No representations are made as to whether the information is applicable or available in any other country which may have access to it.
MLM Financial Ltd are appointed representatives of Openwork Limited who are authorised and regulated by the Financial Services Authority
Openwork Limited offers insurance and investment advice on products from a limited number of product providers and advice on mortgages representative of the whole market.
