April 5th 1960

dunstonh

I think dunstonhs comment about frying pan and fire has hit the nail on the head. i dont think I'm in a frying pan, but I have a little instinct that says 'if I stopped / reduced my pension paymnets for a while, and used the money against current loans/mortgage right now, I'd be better off ..

Most serious investors or decent advisers will look to for annual returns that average in excess of 10% a year on average over the long term. Even if you invested a lump at the worst point before the last stockmarket crash you could have achieved that now with a half decent fund spread.

So, unless your mortgage rate is in double digits, I'm not sure thats a good idea.

Your pension needs reviewing and updating. It doesnt mean it should be chucked in the bin. Investments are not things you can ignore. They need an service just like the car otherwise they can start to go wrong.

jamesd

Current loans and mortgage might be better, depending on interest rates and investment returns. If you're taking fair investment risk on money put into a stocks and shares ISA those will probably do better than a mortgage at a decent rate. But if you want almost no risk, paying off the mortgage is useful - you end up losing money compared to the investment alternative but with low risk the difference isn't as big as it could be.

Trouble is, you can get more interest than a mortgage today by putting overpayments into a cash ISA, so if you have a competitive mortgage deal it's hard to justify overpaying on purely financial grounds.

Paying other loans might be more interesting, assuming they have rates above 6%. But as dunstonh has said, you can expect to do better from investments, even being cautious.

There's a strategy that's probably better: try to put 7000 for you or 7000 each into stocks and shares ISA funds between now and age 55. For you only that's potentially 56000 more in ISA funds. Not overpaying on the mortgage or switching to interest only mortgage can help to do this. They you pay that money back later from the tax-free sum from the pension and keep the ongoing benefit of the extra 56000 of ISA tax break. When you retire the income from this instead of taxable pension will help to keep you away from losing the age allowance.

Milarky

I know some people will say they have to draw the line somewhere (so under15s loses out) but I don't agree. You can do many things about your situation financially (and otherwise) but you can't change your date of birth!

This use of the '5th/6th April' as an absolute determinate of what you may or may not do is an anachronism. The start of the tax year is itself a by product of ancient history - yet, like moving the clocks twice a year - it somehow compels us to accept its 'logic'.

People also lose out on state second pension, I believe - the benefits only accruing up to the last complete tax year before individual gets to 65. True, that does mean than someone in under15s' position actually 'wins' - because they complete a tax year shortly before their birthday rather than just after. But there should not be arbitrariness within the pension system full stop. (What if someone wants to align tax years with calendar years in the future, for example - will we be stuck with 'April 6th' as some virtual point of reference still?)

No, they state pension system is set up to serve the needs of the state rather than individuals. It would not take too much effort to strip out these anomalies but anything resembling independent thought seems to be excised from the Treasury down.

[rant over]