Hi
I'm trying to get my head around some of the changes to pension rules coming in next April and getting very confused. One of the articles I've been reading:
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seems to suggest that you can use the equity in your property to bump up your pension fund in a very efficient way. If I understand correctly, the idea is that you borrow a sum of money against your house and put this into your pension fund. The idea seems to be that you achieve better growth that way than paying the equivalent monthly mortgage payments directly into your pension fund.Can anyone comment on the example given? As far as I can see the assumed fixed mortgage rate of 4.9% over 15 years is reasonable and the comparison is insensitive to pension fund performance. All in all it seems like a risk free way to maximise your pension fund growth - or am I missing something?
The scheme seems to be based on being able to take a 25% lump sum from the pension fund at age 50 without buying an annuity - will this really be possible?
Thanks Fred