Should I use my pension to pay off my mortgage?

Yes.

And apologies if I have to look down because there are a lot of numbers here.

Essentially, we were comparing person A and person B.

We weren't very imaginative with the names this time.

And we assume that both of them are 55 years old, that they each have £75,000 left to repay on their mortgage over the next 10 years, that their mortgage interest rates are both 4% and remain 4% over the next 10 years.

And there are no early repayment charges.

And then I think that's all on the mortgage side.

Yes.

So then on the pension side, they each have 300,000 pounds in their pension, we've assumed, and they can take up to 25% of that as tax-free cash.

We're assuming that neither of them needs an income from their pension until 65, that their pension investments achieve a return of 5% a year after fees on average.

And finally, just for simplicity, we haven't factored in any additional pension contributions over that time.

And then, so person A decides to take all of their tax-free cash at 55 and uses it to pay off their mortgage.

That's 75,000 pounds tax-free cash.

Mortgage is fully paid off and that leaves them with 225,000 pounds in their pension.

Now, person B leaves their tax-free cash invested, so they've still got the full £300,000 in their pension, and they continue to repay their mortgage as per the schedule over the next 10 years.

So we then modeled how things might pan out for each of them by age 65.

Well remembered.

Thank

you.

That was tough.

That was a marathon.

But we have been showing it on screen.

So hopefully it does make sense to people.