Does cashing in pension at 50 make sense to use 25% for home renovations?

Hi,

We are planning to do some home renovations in the next 2 years and I am considering cashing in a Pension to help pay for this. This seems to make sense than taking out a home lone to cover it.

The Renovations will be in the region of 60K which would match the 25% tax free pension lump sum. I would invest the remainder in an ARF.

I am wondering on the pros and cons of this?

In terms of other expenses we have a car loan of 7k we hope to pay off over the next year and our mortgage is 15k and due to finish in late 2025.

I am employed in the Public Sector for the last 2 years and on the Single scheme and am also contributing 5% to an AVC.

I am 49 years old, my wife is 48 and have 2 kids 11 and 14.

Thanks,
Lastbuilders

I think this really depends on the value of your pension I am not familiar with the mechanism of Public sector pensions but if you only have 2 years in and are 49 do you have alternative funds/pension provisions to provide an income in retirement? I am 54 and only realising in the last few years the importance of financial retirement planning.

I think the good folks here will want more information in terms of salary/savings/investments etc but my gut reaction is that it is a bad idea. If 60k is 25% of your pension then to me at 48 it is on the light side. This is all obviously relevant to your overall financial positioning and if you have a spouse and their situation etc.

Money makeover will get you better advice methinks.