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500,000 people to use pension to pay off mortgage


Over half a million people in the UK are planning on taking advantage of the pension reforms to help repay their mortgage, according to data from annuity provider Partnership.

9% of 40 to 70 year olds will be looking to clear their mortgage with a lump sum taken from their pensions. A further 25% are aiming to pay a lump sum from their pensions to their mortgage to try and reduce their monthly payments.

The survey also revealed that 8% of people intend to rely on an inheritance to repay the outstanding balance on their property and 7% confessed that they have no plans around paying their mortgage into retirement.

Andrew Megson, Managing Director of Retirement, Partnership said:
“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 1 million in 2014. This is fascinating as it suggests that the Pension Freedoms which allow people to access their entire pension in cash have encouraged people to take a more holistic view of how they use their pension rather than focusing on one-off expenditure. This in turn appears to have focused peoples’ minds on paying off their home loan before they retirement.”

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