It appears that the homeowners in the UK are determined more than ever to pay off their mortgage loans with a pension pot. According to a recent report by propertywire.com, "Just over half a million people, some 631,000, in the UK intend to use all or part of their pension to help repay their mortgage balance." This method of payment system is not fresh or new.
The idea of using a pension to repay a mortgage is an old idea but recent developments could make it more suitable for certain groups as stated in a report by pruadviser.co.uk. While the majority of 40 to 70 year olds with mortgages, 71 percent, intend to continue to meet their obligations via monthly repayments and 25 percent through additional lump sum contributions as stated in a previous report by propertywire.com.
On the other hand, 9 percent or 631,000 intend to use their retirement savings to repay their mortgage. However, other research provided by propertywire.com, shows that this was lower than the figure recorded last year when it was 14 percent. It seems that more people are looking for more old-style approaches to recompense the outstanding balance on their mortgages. It also demonstrates that 8 percent, or 561,000 people, intend to depend on an inheritance to repay the outstanding balance on their property. While 7 percent or 491,000 confess they don't know how they will meet their obligations as based on a survey given by propertywire.com.
While more than half a million people in the UK aim to use all or part of their retirement savings to repay their mortgage, the figures are not altogether the same. It has fallen from over a million in 2014 in comparison to this year. It seems that the Pension Freedoms, which allow individuals to have access to their entire pension in cash have heartened people to take a more universal view of how to use their pension rather than focusing on one off spending.
Regardless of the outcome, the desire to pay off mortgage always lingers in the minds of the people residing in the UK.