There are two schools of thought for this one.

There are some people who believe that you can utilise your pension and then when you reach retirement age then the lump sum you receive can then be used to pay off your pension.

The other school believes that your pension is your pension and should solely be used for your retirement. There are as with everything pluses and minuses.

For those that are self employed or not in a company pension it can prove very tax efficient to do it this way and have a pension that will pay off the mortgage and provide an income. On the other side there is always the performance of the pension to consider because the value of units within the fund can fall as well as rise.

Some people depending on their age can find this quite an expensive method to use and also regular reviewing is needed to make sure that the pension is on track, life cover would also be needed, however this can also be written in the pension.

It is a pause for thought but can be a good way of paying off your mortgage and being tax efficient at the same time.

With - profit pensions get a bonus on an annual basis but the level of bonus can not be guaranteed. Also if early encashment arises then the Life Company reserves the right to impose a market value adjustment. Also if you transfer the plan in the early years the value may be less than what you have paid in. Past performance is no guide to future returns.

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