What to do with Bonus

newbie2013

Hi, I am due to receive a bonus through work and wonder where is the best place to place it to get the best out of it?
I can take it out as cash, or put it into the pension, which the employer will add to via National Insurance Contributions.

I have no urgent need for the cash, but an emergency fund would be good.

Would taking half out and putting half into the pension sound like a good idea?
Although it will be 30 years before I can take out my pension!

Thanks in advance for your thoughts

good_advice

It would depend on how much we are talking about?

First pay off any dept.

If it is a good amount, I would be thining along the lines of paying off some of the mortgage.

newbie2013

good_advice wrote: »

It would depend on how much we are talking about?

First pay off any dept.

If it is a good amount, I would be thining along the lines of paying off some of the mortgage.

Thanks Good advice -
It is around 1000 but depending on performance, could be up to 2000, but if I work with minimum 1000 then I won't be far wrong.

So take out as cash and pay mortgage...
I guess I could put it against the offset so I at least have it if needed...

I have no card debt or loans

patman99

£500 in to a savings account somewhere like TSB (good interst rate) and £500 in Zopa or Ratesetter ( social lending with a good annual return).

Ebe_Scrooge

Paying a chunk off your mortgage ( if there are no penalties for doing so ), or else putting it into your pension are both very good options ( pension being particularly tax-favourable, and even better if your employer will be matching part of it ). I guess the mortgage option will reap medium-term rewards, whilst the pension will be longer-term. But either is a good option, and good on you for not just wanting to blow it on a holiday or whatever

newbie2013

Thanks everyone for your replies. Things have changed somewhat since the post. We have had to fix our garage so the question was whether to put bonus to contribute to mortgage or use it for the repairs.... either way, we have to spend the bonus.
I guess putting it to the mortgage would mean lowering the term...