Pensions as a repayment vehicle

Thrugelmir

SomeUser wrote: »

whilst I can do better in savings than I pay in interest,

That's a different question. As the pension is merely the wrapper. My concern would be the over optimism with rewards to the investment aspects. Along with timing of the exit from the pension fund. As markets do dip. Something that you've experienced little of in your lifetime until now. Given we've had 8 years of sizable Government and Central Bank intervention in the markets.

SomeUser

No you're right - and obviously I can't access the pension in order to pay off the mortgage, but I can use my ISA to pay it off significantly should I not be able to outperform the mortgage interest.

I'm asking about pensions because with potential pensions savings equivalent to the mortgage at aged 33, I figured that would be an easier way to back an interest only mortgage than an ISA.

Before moving to DC pensions, I was an actuarial analyst in the DB world so probably know a bit more than the average person in historic investment, assumption setting, the impact of small variations over the long term and market dipping. I was in the pensions world in 2008.

Some of my job now involves designing investment strategies so the average person investing in a default pension fund isn't screwed through the markets dropping immediately before retirement, although this work has been slightly muddied by the budget and what a *new* default should look like. I have access to the very cutting edge in investment strategy, design and research that corporates pay a lot of money for. I'm also qualified and have the equivalent of CertFP but pensions specialist qualification, APMI, including being RDR compliant.

And as for risk - my mum's business failed in the early 90s, she went bankrupt and we nearly lost the house.

If someone asks me if they should do what I'm planning to, the answer would be no in 99.9% of cases.