Express: Pensioners face mortgage crisis over £100,000 cap on lump sum

The Chancellor Rachel Reeves is rumoured to be planning to cut the figure people can take from their pension nest eggs free of tax from the current maximum of £268,750 to £100,000.

Mortgage brokers say introducing a much lower cap will mean many older people will be locked into paying back a home loan beyond retirement, with the associated interest charges, so hitting their monthly income.

Harps Garcha, Director at Brooklyns Financial said: "The potential changes to the Tax-Free Lump Sum policy could cause undue stress for many who had planned to use it to reduce their mortgage. For those nearing retirement, this sudden shift leaves limited options to adjust their financial plans, potentially forcing some to sell and downsize. This policy risks disproportionately impacting older individuals, who may now face unexpected financial challenges at a crucial time in their lives."

To read the full article, click here.