Pension or pay off mortage

jimnew

Hi does anyone have any advice

i pay tax at 40% .I have about £12000 i can pay into my pension.Would i be better off paying the tax and paying off sume of my interest only mortage

Thanks

dunstonh

How do you intend to pay your mortgage off ?

atush

And what rate is the interest?

12K would buy more pension, plus you will get additonal tax relief returend to you with your self assessment or thru your tax code.

but it is always important to know just how you will pay off your mtg, and to realise that everyday you don't pay off anything you pay more in interest. If you think you will have a pot of 400K, and have a mtg of 100K then you could pay it off with your 25% tax free lump sum. But the interest paid between now and then might curdle your stomach.

If you have 3-6months salary in cash saved seperately, I might be inclined to split your 12K between pension and mtg. If that is your only cash, you are sailing far too close to the wind and need to slim down your spending.

jimnew

Thanks

the interest rate of the flexible mortage 2.49%

The mortage lasts another 20 years and i will still owe over a 100,000