Pay off mortgage or invest/save

AnotherJoe

annabanana82 wrote: »

One last thing, I am risk adverse so not prepared to risk the capital.

Then pay the mortgage off first.


And then educate yourself because by, for example putting it in an ISA at say 1.5% or PB's at about 1.2% real unless you are one of the one in a zillion that wins a big prize, you are not just risking the capital but assuredly losing the capital by perhaps 1% or more a year, dependent on inflation

atush

I have always been very loathe to pay into a personal pension as I was led to believe that the return wasn't particularly great. My Mum for example only gets £80p/m but I have no idea how much she paid in.

You were led to believe something that is false.

Every 100 into a DC pension costs you 80. An immediate increase of 25%. Where can you do that?

Your mothers pension is small because she paid in too little, and she perhaps bought an annuity. However, how would she get by w/o that 80/m?

Your OH possibly should have a pension with his employer, but there is nothing stopping you from opening a pension for him. he can pay in as much as he earns or 2880/3600 whichever is higher.

Fatbritabroad

atush wrote: »

You were led to believe something that is false.

Every 100 into a DC pension costs you 80. An immediate increase of 25%. Where can you do that?

Your mothers pension is small because she paid in too little, and she perhaps bought an annuity. However, how would she get by w/o that 80/m?.

It constantly amazes me even at my work which is a financial services company how many people bemoan their awful pensions while not at all equating the amount they've paid in

MEM62

annabanana82 wrote: »

I have always been very loathe to pay into a personal pension as I was led to believe that the return wasn't particularly great.

And there lies a bad financial decision waiting to happen. Led to believe by who - not by anyone that knows what they are talking about.

MaxiRobriguez

Fatbritabroad wrote: »

It constantly amazes me even at my work which is a financial services company how many people bemoan their awful pensions while not at all equating the amount they've paid in

Probably relates to the old thing about people caring more about not losing their money than gaining. Sacrificing salary pre-tax is in someways losing that money because you don't get the choice of spending it in the near future.

strawb_shortcake

I completely get all what's been said with regards to the private pensions, for myself it's not something I've considered with having such a good work pension. For my Husband and myself, we made the decision to have one parent at home knowing that with that came financial sacrifices, and that included accepting that my pension would suffice for the both of us; notwithstanding that it was and is assumed that he will be in full time employment and have 20 years to contribute to a pension. Through child benefit he gets his state pension credits so this will not be affected by his time at home.
In my Mum's case; she was primarily a stay at home parent, when she started her private pension paying in what she could afford; she fully acknowledges that it's a reflection of what she paid in, but on consideration she would rather of had the money she was paying in at the time as additional disposable income. As it is both my parents have state pensions, and my Dad has an Army, council and other work pension the £80 my Mum gets does not play a huge part of their joint income.
I do have access to an IFA through work so before we make any decisions I would seek advice from there first, I just wanted to get an idea of what else was on the market before doing so. Admittedly I hadn't thought through the net present value of capital and what it would be worth in future; primarily because I've never had enough money to cause me concern.

atush

I completely get all what's been said with regards to the private pensions, for myself it's not something I've considered with having such a good work pension.

The reason you should have one, is if you want to retire before you scheme age. ie do you want to work til 65-67? if not, using a DC pension will help you do to so.

or my Husband and myself, we made the decision to have one parent at home knowing that with that came financial sacrifices, and that included accepting that my pension would suffice for the both of us;

Well that is fine, but how many hours does he work now (you said PT) that his employer doesnt have to pay into a pension? And no2, he could earn zero and still have a pension (you guys pay in up to 2880 and the Govt will add tax relief even if no tax paid and push it up to 3600). A nice little earner. And every little bit helps as he will have a full PA that will go to waste in some respect.

strawb_shortcake

atush wrote: »

The reason you should have one, is if you want to retire before you scheme age. ie do you want to work til 65-67? if not, using a DC pension will help you do to so.

My thought process had been to plough money into a something, possibly a holiday home at 50, then if desired cash in at 60 to fund an earlier retirement, but my work pension I can take earlier but there is a penalty of 5% a year.

Well that is fine, but how many hours does he work now (you said PT) that his employer doesnt have to pay into a pension? And no2, he could earn zero and still have a pension (you guys pay in up to 2880 and the Govt will add tax relief even if no tax paid and push it up to 3600). A nice little earner. And every little bit helps as he will have a full PA that will go to waste in some respect.

He has been working 5 hours a week, on the minimum wage so it would be most of his wages going to a pension, we live in quite a rural area so jobs are limited without purchasing a second car.

Once we have a decision on the insurance and we have a clearer idea what our finances are going to be then we will look into a pension. Thank you for your time and advice