Would second pension damage my affordability

Legacy_user

I have a second pension set up which I believe is a vastly better place to put spare cash than mortgage overpayments, and this is completely discretionary.

Would this be an issue when I come to remortgage to a new rate at the end of my current fix?

If so I'm not sure whether to suspend contributions for a while beforehand, but that'd be a costly thing to do.

Access to 2nd pension balance in 27 years

AnotherJoe

As long as your pension payments are discretionary as you say then in theory it shouldn't matter. I suppose it's possible that a lender might question a large payment going out every month.

When you say it would be expensive not to pay in for few months, can you explain, as that implies it's not discretionary ?

amnblog

Whether this is an issue depends on the Lender and your overall affordability.


Some Lenders will ignore pension contributions, some will ignore them if they have stopped, some if you say they are being stopped. Other Lenders will include them whatever.


If the whole thing is affordability with the pension contribution allowed for, it is not an issue anyway.

System

Joe - expensive as in lost opportunity, the fund performs well:

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000005OPT

And half of what I put in comes back as extra tax credits

I suppose I could just top it up later, or use a broker maybe

Have been tempted to borrow more to invest but am saving that for crash opportunities

System

Earn 17.5k a year, pension 1 £80 a month, pension 2 £300 a month, s&s isa £100 a month

Current mortgage £72000 for 35 years
£250 a month

Keep_pedalling

MatthewAinsworth wrote: »

Joe - expensive as in lost opportunity, the fund performs well:

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000005OPT

And half of what I put in comes back as extra tax credits

I suppose I could just top it up later, or use a broker maybe

Have been tempted to borrow more to invest but am saving that for crash opportunities

For a pension that is not a very balanced fund. You may have done well so far, but having everything in small cap stocks is risky, so maybe you need to review that before putting more in anyway.

Never borrow to invest,

System

My isa is in a FTSE all share, and most of what I own is the house

System

And the other pension is DB so I felt a little room to speculate

The small cap fund is quite diverse, no more than 0.16% on one company, safer than the jobs market I reckon

System

. Never borrow to invest,

I understand but its what we're already doing if you ever choose to put into pension rather than mortgage, and then its seeing a loan that's not much different in rate than the mortgage

And then its more about the safety of the investment
Has to be better than borrowing to spend?

I have 5% current accounts and regular savers I could use to guarantee a profit, I could do this to build up credit rating and clear it shortly before remortgage time

Not sure I'd be allowed to borrow anything with putting into pension

Leverage is a powerful too but so is tax credit efficiency, and I can't have both, if I couldn't secure a good mortgage fix I don't think that would be enough to deter me from pensions, will try a broker!

Keep_pedalling

MatthewAinsworth wrote: »

And the other pension is DB so I felt a little room to speculate

The small cap fund is quite diverse, no more than 0.16% on one company, safer than the jobs market I reckon

True but it is still 100% stock and 93% of that is non UK stock, which will will have done very nicely with the brexit vote with the fall of the £, but it could equally flip the other way.

Might be worth posting a question about your strategy over on the pensions forum.

System

Its my hedge against an uncertain UK future!
At the moment I'm still extremely heavily UK biassed with my house and small FTSE isa, I don't think individual products need to be balanced as long as the federal picture is

Won't touch it for 27 years so hope currency will stabilise