Can I draw from my pension to use as a deposit?

Posted on 15 May 2008

Can you cash part of your pension to put down as a deposit on a house. We have been renting for a while and have no extra cash.

Hi Deborah,

You would have to speak to your pension provider as rules differ on the age at which you can extract a lump sum.  The lender would certainly not mind that this was where your deposit came from.  However, I must stress that it is rarely ever a good idea to take money out of your pension. They are underperforming already and Lord knows we’re unlikely to get the support we need from the state. 

Don’t forget that  property is generally falling in value now, and expected to lose between 12% and 18% nationally over the next two years, and whilst it might increase again after that, it will be slowly.  Consider your priorities thoroughly as this is not a low risk investment for retirement money.

Good Luck,

Katie.

 

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