Pension health

Dazed_and_confused

Isn't 62 a reference to the percentage the op is willing to sacrifice?

pensionConfusion

Dazed_and_confused wrote: »

Isn't 62 a reference to the percentage the op is willing to sacrifice?

Yes.
I have got a reply from HR. We do have a Salary Sacrifice in place.

pensionConfusion

You have a spouse / partner by the sounds of it to get £6k p/m family income so don't just look at your own situation, do it in it's entirety.

What is the overall pension situation?
Spouse has a finally salary pension. Expected to get around 30000/year on retirement. Including state pension

What is your mortgage rate / term? Any benefit to be gained by paying a lump sum off that to get a lower interest rate due to reduced Loan To Value?
12 years to go. We pay 1428/month. Is there any reason to not pay off mortgage?

When do you hope to retire, and on what level of income in retirement?
Approx 50000/year. At 65

Are you both on schedule for full State Pensions?
Yes

Any need /plans to assist children with Uni fees / house deposit etc?
Yes. Both but hopefully before retirement

JoeCrystal

pensionConfusion wrote: »

When do you hope to retire, and on what level of income in retirement?
Approx 50000/year. At 65

Is your hopeful income of £50,000 is gross (before taxes) or net (after taxes)?

BoGoF

pensionConfusion wrote: »

What is your mortgage rate / term? Any benefit to be gained by paying a lump sum off that to get a lower interest rate due to reduced Loan To Value?
12 years to go. We pay 1428/month. Is there any reason to not pay off mortgage?

But what is your interest rate?

Reason to not pay it off - you will likely get a better return paying into a pension or S&S ISA.

AlanP_2

Dazed_and_confused wrote: »

Isn't 62 a reference to the percentage the op is willing to sacrifice?

Yes, apologies. Having reread it I see that now.

pensionConfusion

JoeCrystal wrote: »

Is your hopeful income of £50,000 is gross (before taxes) or net (after taxes)?

After tax.

JoeCrystal

pensionConfusion wrote: »

After tax.

So basically, you need a gross income of £56,250 assuming you are both using personal allowance then. Of course, who knows what the tax brackets are going to be in twenty-five years!

Triumph13

It looks on those numbers as though your spouse must be well into the higher rate tax band to get to £6k a month coming in. Depending on spouses salary and number / ages of kids you MAY get a lot more bang for your buck making contributions in their name if it means you get to keep your child benefit eg with 2 kids CN clawback adds 18% to marginal tax rates between £50k and £60k.

pensionConfusion

Yes that does make sense.
I save 43000 in interest if I pay off my mortgage of 162000 now.
If I invest 162000 I will need to make more than 43000 over 12 years.

BoGoF wrote: »

But what is your interest rate?

Reason to not pay it off - you will likely get a better return paying into a pension or S&S ISA.