Buy a pension at 38 or overpay mortgage

cjj_2

Hi
Having always worked part time whilst looking after 3 children I have not got any sort of pension in place. At 38 I am thinking of investing £50 per month in a pension with the Halifax but Im not sure if I would do better overpaying mortgage instead (rate of 2.7) If anyone has any advice that would be great as I have an appointment with Halifax tommorow. My mortgage is not with Halifax though. My husband has a pension from the age of 18
Thanks

dunstonh

At 38 I am thinking of investing £50 per month in a pension with the Halifax

Three things there

1 - no pension at 38 is damned late.
2 - £50pm is more or less pointless for a 38 year old.
3 - Halifax have low quality products and you can do better.

Im not sure if I would do better overpaying mortgage instead (rate of 2.7)

So, lets fast forward, you have paid off your mortgage but are now retiring and looking at £5000 a year income from the state. You cant afford that so you then have to borrow against your property again using equity release.

If anyone has any advice that would be great as I have an appointment with Halifax tommorow.

You should cancel. Get a local IFA to see you instead and involve your husband as retirement planning should be done jointly not individually.

cjj_2

Thanks for your quick reply dunstonh. i appreciate it

EdInvestor

cjj wrote: »

Hi
Having always worked part time whilst looking after 3 children I have not got any sort of pension in place.

Not so.You will be covered by the 2 state pensions.Get a forecast of how much you have already clocked up here:

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008

This will be the basis of your pension planning. You need to know how much additional saving you need to do to maximise use of tax allowances after retirement, as some additional savings/investments may be better done using ISAs rather than pensions.Paying off mortgage doesn't look so exciting at your low rate.

I agree that £50 into a bog standard Halifax pension wrapper is very unlikely to be productive in the long term..

cjj_2

Thankyou Edinvestor I did not realise about the 2 state pension. I am going to try to see and independant financial advisor