Cashing in a Pension Pot at 55 to buy a house while on benefits

[Mr.P]

Before you consider cashing in your pension, you really must get some advice from a qualified financial adviser. Whilst you should be able to take 25% tax free, any more would be taxed (possibly by as much as 60%). In addition, there will most likely be early draw down fees charged by the pension provider. Personally, I think your best option would be to press the HA for a better property and leave the pension pot to grow.

[Mr.P]

I have already checked and would net at least £80K after charges.

 

To be honest, £80K is not going to buy much of a house and you could quite easily end up in a worse neighbourhood without sufficient funds to move again. For a quick guide to where might be affordable, take a look here: http://www.bbc.co.uk/news/business-23234033

[Mr.P]

PS could buy loads of gold I think its disregarded as capital or am I wrong

 

Gold purchased as an investment is a tradable commodity, and as such, should be declared in the same way as stocks & shares. Gold purchased in the form of jewellery is (generally) a very poor investment as it is only worth the scrap value on the open market.

 

Had some antique gold jewellery valued last year. For insurance purposes, it was valued in excess of £10,000, but the open market valuation came in at around £1,000.

[Mr.P]

Before you decide on a draw down, you really do need to talk to an IFA with knowledge about Guaranteed Minimum Pension schemes. Aside from the probability of having to pay tax on any amount you draw down, you could find yourself in a difficult financial position when you come to retire.

 

From what I understand of GMP schemes, they can be quite valuable at retirement. It is also a complex area, so you must get some independent advice before doing anything else.