Put money into mortgage or pension?

ManicMum

Hello

I have 38k outstanding on offset mortgage 2.49%. Monthly payment (interest only) is about £89 so can afford to pay about extra £600 at present off capital each month. Also have about 16k in savings offsetting.

Might sound daft but am I best to pay as much off mortgage as possible or should I put into my private pension? Only paying about £230 month into this and know it isn't enough. Getting mortgage down is tempting but then the pension is long term investment.

can anyone advise?

Thanks v. much

alwaystryyourbest

It might help if we knew how old you are?,,if that not being to noisy..

jnb_2

When I took out my first mortgage I was advised to put as much as possible into a pension. I'm glad that I ignored that advice and paid off the mortgage because even now the stock market is below where it was when I was given that wonderful advice (1999 FTSE was around 6000, now around 5000!)

Obviously pension is a long term investment but recent track record suggests they're not nearly as good an investment as the people selling them would have you beleive. Downside is that my retirement plan involves grubbing for roots in the back garden of a house which was paid off years ago but I like most of us can not afford to do both.

wynnvegas

I'd agree that this is an age-dependant choice and will also rest on variables such as your mortgage rate and such. We've taken the decision to forego any real investments or pension planning (although my girlfriend has the luxury of a gold-plated final salary pension) and have instead hammered the mortgage. We know we've saved around £21k by hammering down the mortgage but we also know that we've lost the opportunity to have those chunks of money appreciating in long-term investments.

I'm also slightly biased as none of the men in my family have ever made it to 65 so sticking money into a pension is a potentially massive waste of my time!

Cheers,

Billy

dimbo61

This all depends on so many factors, age, type of mortgage deal ? is it fixed or a tracker ?
You will like myself be paying out a fair amount of commission on the pension payments each month and if you do have the mortgage cleared long before retirement then you can live cheaper ( the mortgage is usually most peoples biggest bill each month) and save in ISA,s and other investments and not just a private pension

ManicMum

Hi, I am 39 but pension in hubby's name and he is 40. Mortgage is offset 2.49%.

Mortgage could be paid off in 3 or 4 years, I think but if we moved back south would take out new mortage just to get same house. But if stay here, then will take out new mortgage at some point anyway to get larger house. All bit dependent on hubby's job.

Pension been going about 2 years with Scottish Life. Changed to that as cheaper charges. Was in Scottish Widows before but have not put any more into that and only had about 7-8k in it anyway.

hope that helps. any advice appreciated.

:beer: