Getting a client mortgage-free with a secure retirement
This client in his late 50s was between management contracts and under pressure to service the family mortgage, causing considerable worry to both parents because they were facing a forced restructure.
We examined a UK Defined Benefit Pension Scheme that covered a PAYE employment period during the 1980s. The scheme was prepared to buy out taxable pension of €11,000 per annum at the age of 60 for a transfer value today in excess of €400,000. Our initial break-even calculations made sense, so we commissioned a formal report from a UK regulated expert firm and determined that it could be made to work, taking the transfer value into an Irish arrangement.
The result cleared the mortgage fully, leaving the family debt-free and has allowed our client to invest in a Government-backed 20 year lease in a Social Housing unit, paying a yield of 5.5% per annum. This means that rents of €14,000 replace the lost pension of €11,000, plus the family mortgage is history after being paid for from the tax-free lump sum.
Our client’s Irish scheme will hold his property and recycle the rents and residue cash into Inflation-Linked Government Bonds and there are no further letters from his bank.