Borrow back mortgage overpayment to fund pension?

Kynthia

ex-pat_scot wrote: »

4. Children.
5. Lots of children.


Mine hoover up industrial quantities of cash.
At his (?) level of income, if he has any children at univ, then he's looking at £6,000 student loan contribution per child.
Extra curricular activities in total can be eyewatering.
School fees...


However, in retirement the little darlings should hopefully be off the books, or largely on their way towards, and costs should (I dearly hope) be dropping down to a 2-person level.

Yup. If my children go to university then I'm sure I will be burning through money for at least 6 years in my late 50s. Thankfully those costs won't last throughout retirement. Then in my 60s I'll need to consider whether I want additional capital to assist with wedding costs and house deposits. At least I can save for the latter in a pension in order to benefit from the tax relief.

MallyGirl

Another yep here - DD is about to take GCSEs, then she might go to an Indie for 6th form and then has chosen a 5 (or possibly 6) year degree. We will be 58 when she graduates if she manages to avoid having to do a gap year. Hence the plan to retire at 60 once she is an independent adult. Glad I only have one

ex-pat_scot

MallyGirl wrote: »

Another yep here - DD is about to take GCSEs, then she might go to an Indie for 6th form and then has chosen a 5 (or possibly 6) year degree. We will be 58 when she graduates if she manages to avoid having to do a gap year. Hence the plan to retire at 60 once she is an independent adult. Glad I only have one

This. Precisely this.




Times 4.

Sanxxx

Thanks for the reply’s, my takeaways are..

It probably makes sense.
Consider back filling earlier years.
Avoid riskier investments.

I do intend to retire at SRA and purely saw this as a tax saving opportunity with growth as a side benefit.

As to what my earnings get spent on.. two kids who I am looking to help with savings for marriage and homes, plus my partner earns and has very little....and personally I like the occasional gadget ;j

Thanks all.

enthusiasticsaver

Certainly overpaying your pension makes sense from a tax point of view and at the moment would certainly be more than 2.25% per annum although with investing there is no guarantee.

Make sure the funds are well diversified .

Presumably you will be looking to just withdraw up to the personal allowance or are you going to be looking for a much higher annual income in retirement? Going from £87k gross to a pension will be a big drop even allowing for no mortgage, no NI and no pension contributions.

Are you maximising your partners allowances too? She can transfer 10% of her tax allowance to you as well. Not a huge amount but better than nothing.

kidmugsy

ex-pat_scot wrote: »

However, in retirement the little darlings should hopefully be off the books, or largely on their way towards, and costs should (I dearly hope) be dropping down to a 2-person level.

The Bank of Mum and Dad is expected to trade for many years. If "trade" is quite the verb for a bank that sees only outflows.

atush

I am thinking of shutting the doors of th bank of mum and dad.

Uni finished, and sprogs all gainfully employed in good jobs with good pay and pensions. They dont need me.

They are even talking about moving out of the house! That will be sticker shock over the pittance I charge them lol

kidmugsy

"Uni finished, and sprogs all gainfully employed in good jobs with good pay and pensions. They dont need me."

Buying a house in London? "Aw, mum, I can't afford the deposit." And then there's weddings.