Advice Needed - should I overpay my mortgage or Pension?

Pritesh_2

Gingham_Ribbon wrote:

Hi Jwoods, I've added your question to the thread already covering this topic, so hopefully you'll get some more answers.

Thanks.

Hi, can you please link the thread where the above has already been discussed.

many thanks!

Scully's_Girl

Firstly, congratulations for being so diligent at 32. Most of our peers at this age arent even thinking of a pension, let alone contributing to it.
£100 is a good amount to start with, every little bit helps. Just out of curiosity, are you currently saving an emergency fund, or more importantly, an ISA?
Working with the various ideas on this site should enable you to finagle more funds out of your monthly income, which will increase the amount you can spread over these various things. Whilst contributing to the mortgage is vital, every day you delay on your pension will bite you down the line, so maximizing both is essential. I agree that splitting it for now is good. I love the ideas on the sites, like the Mortgage Pig. If you take a very hard look at your current situation, & write it all down, you might find other ways to save. Then in 2 - 3 years, push up the payments, start an ISA ,if you havent already. An ISA should come before a normal savings account, its the same thing just with tax benefits.
A mortgage & pension are similar in that the earlier you start, the better off you are in the long run. Regardless, I think you're on the right track.

TurnaroundSue

I think personally that pensions are a big con!! You could throws £100s at a pension and it still be relatively small when you retire (if the company haven't gone broke and spent the pension monies that is!!). I personally would think of investing in maybe another property either in the UK or abroad and put my monies into that - at least that way come the time to retire you should hopefully have a nice place unencumbured and ready to sell, but that is just own opinion!

DebtFree

Please note:- I am not a financial advisor & my only financial training has come from the school of life. What follows are only my opinions based on my own experiences.

Mortgage free everytime!
I took out a personal pension when I was a 21 year old. The pension advisor loved me.By age 25 I had a mortgage. I stopped the pension contributions to help pay the mortgage. The pension advisor hated me (it really was that clear).
I then looked deeper into the pension & realised what a con it had been. All up front fees, pleanty for the advisor & company, then a little for me when I am old. A complete waste of money.
The rules of a pension also change as you go through life (rarely for the better), but you can't take your money back if you don't like the new rules.

I then saved hard to pay off my mortgage as soon as I could. I achieved that within 10 years. Every single penny I paid out over the interest charges reduced my mortgage. No commisions, no fees, no waste.
I now have a 50% mortgage on a second property, which is my 'pension'. Should the rules change on rental properties in the future, I can sell up & choose another investment. Should I decide I want to use my 'pension' at the age of 45 I can.

The point I am trying to make is that by using this site you must have an interest in your finances. Therefore allow YOUR money to do what YOU want it to. Give it to a pension & you are losing the use of it for a long time if you are young. A pension will not excite a 30 year old enough to keep running an older car to enable larger contributions, but another few thousand pounds off a mortgage that is a fixed target will. As you get closer to the target, you will
find yourself working harder to save more at an age when you can. A pension will only give you that kind of incentive when you get to be over 50 & want to ease off work.

Good luck.