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Access to pensions a 'get-out-of-jail-free card for interest-only mortgage holders'

Interest-only mortgage holders face an average shortfall of £71,000, and are could use their pension pot to pay it off

22 March 2014

Changes to the pension system announced in George Osborne's budget could provide a get-out-of-jail-free card to thousands of borrowers on interest-only mortgages, brokers have said.

From April 2015, retirees will no longer be forced to use their pension fund to buy an annuity and will be allowed to access all of their savings, subject to a 20% tax charge.

Experts said that in future years some of this money could be directed into paying off home loans that are still outstanding when the homeowner reaches retirement.


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