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ThrobsBlackHat

Here we go:


I am 26 and have approx 47k of equity and 78k of mortgage on a house

I have no pension

I have no debt (except for a bit of sale shopping!)


House / Car / Bills etc work out at 1150 a month, and I take home 1240. I am therefore very reliant on the 335 a month paid by my lodger for food & fun money


I want a pension, I know I need to find the money and start paying in.

In July i get married - she is 22 & just finishing Uni. I am partly tempted to pay more money into a pension for her that will accrue for longer? What do people think?

My work don't do pensions as we have 4 employees - I am on my own and don't want to be ripped off or lied to. What am I looking for? What should my priorities be?

Milarky

As your work 'won't do pensions' and there are only 3 others what about suggesting a salary sacrifice (you could split the employer's 13% between you, for instance) to bump start other colleagues' interest?

(This would reduce your ability to borrow more, potentially, and also marginally reduces your state second pension - S2P but, on balance is probably 'better' than a straightfoward direct contibution to a pension from net pay)

Normally, your priority would be the repayment of unsecured (and then secured) debt. The way to address that, probably, is to budget for doing both at the same time. If you expect an investment return over the life of the mortgage (including the assumption that you remortgage but finally become mortgage-free in your early fifties) to be less than your investments then biasing payments towards investment over debt repayment looks attractive. If you expect lower (or lower relative) returns then overpaying the mortgage makes double-sense because you retain flexibility (you can sell your house, but you can only 'rent' most of your pension and what's more it's a 'controlled rent'!) and can always go for more agressive investment from a more secure base if starting later.

EdInvestor

You don't appear to have any savings and you're extremely close to the bone on outgoings, dependant on your lodger.S/he'll be staying on after you get married will s/he? What would happen if you lost your job?


I would suggest you accumulate 6 months worth of outgoings in an ISA first as a minimum before locking money away in a pension where you can't access any of it for more than 26 years.

The pension rules will change next year so that you can contribute much closer to retirement without losing out on tax relief.So it's better to shelter money in the ISA wrapper now, as unless you use your annual allowance, you lose it.

That's no longer the case with a pension. You can use your allowance later when you have more money left over to save.