Debt / Retirement

rymanskid

I will try not to make this to long winded ,,I plan to retire at 63 in 2 years time at present myself and wife both work, I also have a private pension each month,, we rent the house we are in the only debt we have is a car loan, repayable over 5 years,, we have savings in both an ISA and normal savings account that could pay the debt off now,, what I want to know is ,, would I be better doing that or as I am doing now which is making an over payment each month which should clear the loan by the time I retire, the loan is at 4.2% and the best I can get on a regular saving account is 2.5%, we are able to save money each month even with the over payments on the loan ..

On_my_way

You are probably better off clearing the loan now as the interest is against you not for you. Although it would be hard to get 4.2% interest on your savings at least that would be on your side.

KirstyO

Unless you get a TSB classic plus current account which gives you 5% on in-credit balances but only up to £2000, might help with part of the savings?

andyfromotley

Make sure you leave yourself enough for an emergency fund if you use the savings.