Pension payment or mortgage pay off?

Ping_Man

Hi,

My wife is a non tax payer. Currently we are not paying into any pension for her, however I understand we can put in £2880 a year for her to make the most of this.

Our mortgage has £17K left on it which we currently pay £470 a month to and at this rate it'll be paid off in 3 ish years. Mortgage interest is currently 1.5%, When I worked it out recently, even if I could pay it off tomorrow I'd be approx £500 better off than letting it run the 3 years (the mortgage can run for another 14 years if necessary).

I think I've worked this out already, but would there be more benefit in paying into a pension for my wife at £240 a month and letting the mortgage run longer paying it off at £230 a month? Guess I'm assuming that mortgage rates don't go up too much in the next 6 years though!!

Thanks for reading/replying

atush

I would start a pension for your wife if she doesn't have one and your mtg is only 1.5 %. Overall, you could expect better than than from a pension esp with 20% uplift from TR. As your wife will have a personal allowance so you should aim that she has enough pension to use it in full otherwise you are wasting her TF allowance.

Once the mtg is done, you should think of S&S isas for you both too if you aren't using your allowance.