I have savings to pay off mortgage - but should I?

kidmugsy

A word on pensions: i see no need for you to start saving in a pension now, but when NEST pensions become available you may well want to open one, since they will attract an employer contribution. In other words, it will pay you to be patient about pensions.

jamesd

kidmugsy, the NEST product is the worst of the auto-enrollment-specific pension options that an employer could choose once auto-enrollment becomes required. Now:Pensions is a better choice for employees with an interest in pensions because they can transfer the money to a pension with more choices. NEST bans all transfers out.

Or put somewhat differently, it's best to write about auto-enrollment becoming required, because the NEST product is just one of many ways of meeting the requirement, and not a good one.

pheonixrising21

Davenottingham, I notice you have taken MPPI @ £40 per month? May I ask who this is with and what it covers. Is it payment protection (covers the cost of the mortgage payment for 12 months) or income protection (gives you your current income for 12 months, not just the mortgage payment). At £40 a month I am guessing it is income protection or you are being over-charged! I have payment protection for 125% of my monthly mortgage costs and I pay less than £8 a month!

If the payment protection is from your mortgage provider then its highly likely you are paying over the odds. When I took my mortgage in 2006 I was offered MPPI from the provider. It was £39 per month and was provided through my provider by a company called Cardif Pinnacle. I called them directly and they offered me the same cover for just over £13 a month. Since then, my mortgage payments have come down and hence so has the MPPI cover.

davenottingham

Hi Phoenix
To clarify the insurance is 'income' protection and covers the cost of the mortgage plus any other bills (to a max £1k/month) for 12 months max- and covers accident, sickness and unemployment.
I didn't take it out with the mortgage- only in the past couple of years.
As you say, £40 is a lot per month and this could be reduced by:
- getting competitive quotes
- increasing the excess time (30 days)
- reducing to cover to just cover the mortgage payments (approx £400).
...or by ditching it completely.

davenottingham

ps the cover is through getmy.com