Home or Pension

timbrabbit

Hi



I am currently in a quandry.

Myself and my wife are currently living in a house valued at 180k. We owe 40k, which is being paid over 15 years. Possibly with a view to moving home and upping our mortgage to 65-70k for a 205-210k property.

I am 40 and have recently started working for a company with a pension scheme which alloys you to input a max 6% of your salary and will match your contribution to a full invest of 12%.

My question is would it be better to pay the approx 125 pound of my salary a month into the pension and receive the additional 125 from the company, or pay 125 a month off the mortgage. With possibly extending the mortgage term.



Regards



Tim

mramra

Unless there is a very very strong reason not to, you would be mad not to make the 6% pension payment. Your contribution would only cost £100 of your take home pay assuming basic rate tax relief. So, for £100 you get £250 invested immediately into your pension fund.

bendix

timbrabbit wrote: »

Hi



I am currently in a quandry.

Myself and my wife are currently living in a house valued at 180k. We owe 40k, which is being paid over 15 years. Possibly with a view to moving home and upping our mortgage to 65-70k for a 205-210k property.

I am 40 and have recently started working for a company with a pension scheme which alloys you to input a max 6% of your salary and will match your contribution to a full invest of 12%.

My question is would it be better to pay the approx 125 pound of my salary a month into the pension and receive the additional 125 from the company, or pay 125 a month off the mortgage. With possibly extending the mortgage term.



Regards



Tim

I can't believe you're even asking the question.

Cautious_Investor_3

mramra wrote: »

Unless there is a very very strong reason not to, you would be mad not to make the 6% pension payment. Your contribution would only cost £100 of your take home pay assuming basic rate tax relief. So, for £100 you get £250 invested immediately into your pension fund.

I couldn't agree more.

Buying a house and investing in a pension are two entirely different things meeting two different needs.

You'd be mad not to take your employer up on their offer.

The Cautious Investor

dunstonh

My question is would it be better to pay the approx 125 pound of my salary a month into the pension and receive the additional 125 from the company, or pay 125 a month off the mortgage. With possibly extending the mortgage term.

You wont be paying £125. You will be paying £100 because of tax relief making up the difference. Then the company double it. So, for £100, you get £250.

Absolute no brainer.