The discovery that started it
A friend mentioned that he was taking tax-free pension cash in the next year when he hit 55. I turn 55 before the normal minimum pension age is due to rise to 57 for most people on 6 April 2028, so the timing felt unusually important.
Once we saw that pension cash might clear the mortgage, the idea became emotionally powerful very quickly.
The first answer looked brilliant
Our early modelling suggested we could combine the offset, normal mortgage payments and pension cash to become mortgage-free in around 18 months. The alternative was to carry on paying the mortgage and paying into the offset account, which would clear the mortgage in around 48 months. Waiting an extra 30 months looked mathematically better — but only slightly. We preferred the certainty of clearing the debt.
That was not a spreadsheet error. It was us being human.
What all the scenarios showed us
We tested this question over and over in different ways: how much pension cash to take, when to take it, how much we could save into the offset, and how long we were prepared to keep the mortgage.
The spreadsheets kept saying the same thing. Leaving the money invested for longer was slightly better financially. Clearing the mortgage earlier was slightly worse financially — but it bought us something the percentage did not measure very well: certainty.
Our current decision
We plan to take some tax-free pension cash at 55 in February 2028 — but only enough to make sure we can clear the mortgage in October 2028.
Between now and then, we keep making the normal mortgage payments and put our savings into the offset account. October 2028 should feel like a real step towards financial freedom.
The lesson from changing our mind
We built a lot of different scenarios around this one question.
In the end, the maths said that keeping the money in the pension and holding the mortgage for another 30 months would leave our overall retirement pots about 1% better off.
We chose the mortgage-free route anyway. Heart ruled head here. Being mortgage-free meant more to us than squeezing out that extra 1%.
It reflects our ages, pensions, mortgage, tax position, priorities and assumptions. The useful bit is the questions we asked—not copying our answer.
Official information we checked
Rules change. These links are for checking the underlying rules rather than treating our experience as guidance.