Over pay on mortgage or NHS pension

german_keeper

Sorry to labour the point but are you happy that your CS pension has been calculated correctly?

Sounds like it is the Classic scheme. Very rough calc but 30 years service, £20k salary when you left would be £20k x 30/80, £7,500 pa, £22,500 lump sum. Those figures would then have been increased by CPI these last 6 years, and would continue to do so till you are 60. However if you have been part time at some point that would explain the apparently low figures.

I have been told of several examples of MyCSP getting things wrong but to be fair they have been quite unusual situations. Yours I would think is reasonably straightforward so I would expect them to have got it right.

GunJack

I'd also check how much you can overpay the mortgage without penalty before you decide how to allocate your funds..

badmemory

I am biased. When you have paid off your mortgage it doesn't matter what happens you always have a roof over your head. I have a friend who has an interest only mortgage, he is over 70 & still working & does not have the money to pay it off & the investment he did have paid for what everyone knew was a waste of money attempt at a cure for cancer of his now late wife (not a criticism, I wish someone cared enough about me to do that). But in a couple of years he is going to be homeless. He is lucky, he has children in reasonably affluent circumstances & between them they will sort him out. But not everyone is so lucky.

crv1963

OP have you considered when you would be able to access your NHS Pension? Combining them all into the NHS Pension may not be the best way forward because if you take the NHS early it and so they will be reduced if this is before your SPA.

You have one due to start payment age 60, another due to start age 65 and then NHS and SP due to start at SPA. I'd work through the figures again and double check that you are going to retain the maximum amount of pension income.

It may be better to keep CS Pension starting at 60, have a reduced NHS Pension at 60 and then get the LA one start at 65 with SP starting at 67/68?

WarrenStean

Very simplistically, as interest rates on mortgages are historically very low, and without delving into too much detail I would personally pay more into my pension.

GingerJim

Get the mortgage paid off, or maybe you could downsize and end up owning the new property and be able to save all spare money into either pension or other scheme.

If you are now in the 2015 NHS pension, what are they considering your pension age to be? I suspect 67, which means if you retire at 60, your NHS Pension will be about 35% less because of early retirement. So if you are currently on say £26,000 and will be for the next 8 years, you'll bild up 1/54th of that each year, so £480 a year, in total 480 x 8 = £3,840 annual pension. Less the 30-35% for going early = £2,496 annual pension. If you stayed on £26,000 until age 65 in the 2015 scheme, you'd build up 13 x 480 = £6,240, and the early retirement deducation would only be about 10% for going two years early, so your new annual pension would be £5,616. If you stayed until 67 on a salary of £26,000, your annual pension would be 15 x 480 = £7,200 with no deducation for early retirement. It pays NOT to retire early on the 2015 scheme. The other option would be to work full time until 60 and then less than full time for as long as you could tolerate it, just to avoid the early retirement penalty, and you could live on other pension which may be paying out at 60, plus your part time earnings, and then fully retire at say 65. It is all a balance of wanting / needing to retire and how much money you can live on. I think having the roof over your head being your own is a massive bonus, and would be the first thing I would want to secure in your situation if it was me. Good luck with the new job.