More on  UK Pension mortgages

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More on UK Pension mortgages


Secondly, once your savings are inside the pension plan, they suffer neither income nor capital gains tax -again, a big advantage over ordinary endowment policies where the life company pays tax at up to 37.5% on the income from its investments.

Money.co.uk lists all of the best Pension Mortgages. See: http://www.money.co.uk/mortgages/pension-mortgages.htm

Pensions can therefore be seen as supremely tax-efficient savings plans which can provide you with a large cash sum at retirement. Building societies have now come to realise that they can therefore provide an excellent way of paying off a mortgage.

Before the societies accepted this, however, they had to come to terms with one less fortunate aspect of pension plans: they are not assignable. In other words, you can't give away, or sell, your rights to your pension to anyone else. The lender can therefore only hope and expect that you'll pay off your mortgage with the cash sum available on your retirement: he cannot force you to do so.

Many societies, however, have taken the view that the first charge that they have on your property is in itself a good and sufficient security. After all, this is the only security they have as regards repayment mortgages, though here, of course, capital is being repaid all the time and so the risk is not so great.


See:best 90% mortgages

UK Pension mortgages


Linking your mortgage to a pension plan is one logical step forward from the concept of an endowment mortgage it's a giant leap for tax efficiency. 'Pension mortgages' were only a twinkle in a tax planner's eye at the beginning of the 2010s, but now they've become an accepted part of the mortgage scene and can offer a real alternative to some people at least.

Who is eligible?

People who can take out a 'personal pension plan' can arrange a pension mortgage. This means primarily the self-employed, but also anyone else who has no pension scheme arranged for them by their company.

There is a second group of people who may also be able to arrange pension mortgages: company directors and higher-paid executives who have . . .... see: UK Pension mortgages


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