Advice please. Pay off mortgage or save?

BRIGHTHOPE

I've got a Flexible Offset Mortgage with the Abbey. It has 4yrs to run, £28,000 outstanding and I'm presently paying an interest rate of 1.25%, i.e. base +0.75%.
Ok, so I have the £28,000 and am tempted just to pay the mortgage off. I have only just aquired the money so it's doing very little at the moment - awaiting this decision.
What I want to know is, by continuing with my mortgage and investing my money elsewhere how much do I stand to gain, and is it worth the hassle?
I'm living on e pension so don't pay the higher rate of tax.

wynnvegas

Although the majority concensus is likely to be to see what the best saving options are using Martin's calculator to see if it beats the mortgage rate taking tax into account, the peace of mind and feeling of achievement of paying the mortgage off and effectively guaranteeing a good bit of freedom and security for yourself isn't worth a few hundred pounds. If you've got the money to do so, I'd certainly recommend paying a good chunk of the mortgage, if not all of it!

Cheers,

Billy