Pension remortgage

Where pension remortgages are applicable

Available to the self-employed or an employee who is not a member of the employer's occupational pension scheme.

Main features include:
• contributions attract tax relief at the highest rate paid by the plan holder;
• a retirement 25% of the fund value can be taken as tax-free cash;
• the balance of the fund is then used to buy a compulsory purchase annuity.

If the pension is used to repay a remortgage then the tax-free cash will be used although there is no guarantee that this will be sufficient to repay the remortgage.

Using the fund to repay the pension remortgage will also reduce the amount available to generate income in retirement.  The normal retirement age for a personal pension plan is between age 50 and 75. There are certain occupations where the Inland Revenue permit an earlier retirement age.  Again the fund managers are unable to reclaim the 10% tax credit and this has reduced the amount of income received into the fund. 

A pension plan cannot be assigned to the lender and it does not automatically include any life cover.  The policyholder can arrange for life cover to be included and this is known as pension term assurance. The benefit of including pension term assurance is that the plan holder will receive tax relief on their premiums at their highest rate. The amount of pension term assurance will be limited depending on when the plan was taken out.

For a remortgage enquiry please contact

Details supplied here will be strictly confidential!