Time to get my house in order!

MovingForwards

I've read so many of the pension threads, but a lot of the advice is based on those being near or above the bigger tax brackets, which I fully get as there's the option to get reduced tax etc.
For those on lower incomes, renting or with a mortgage, there isn't much guidance. 

For me the idea of having a paid off mortgage would mean a roof over my head for life. Losing a job wouldn't have a huge impact as only food and utility bills would need to be paid, not trying to find a mortgage payment each month on top of it especially if there was the need to rely on benefits for a while until finding a new job, being able to work PT instead of FT etc. 

What I have done is used a pension calculator, to see what happens if:
- I pay in a small amount for now, increase it and then do proposed amount after paying the mortgage off until retirement. 
- small amount now, increased each year until retirement.
For me, there wouldn't be a noticeable life changing amount due to retirement age and the amount I can realistically put away each month. 
If you do clear the mortgage, then pay higher sums into pension, you have to be disciplined to do it, without fail each month.

Have you had a play with pension calculators to see the difference? I've been using the vanguard one as it's easy to use.

LeighofMar

"For me the idea of having a paid off mortgage would mean a roof over my head for life. Losing a job wouldn't have a huge impact as only food and utility bills would need to be paid, not trying to find a mortgage payment each month on top of it especially if there was the need to rely on benefits for a while until finding a new job, being able to work PT instead of FT etc."

I was reading a thread where the daughter was asking for guidance because her father was close to retirement. He is debt free, house is paid off, and he has $140,000 in retirement plus Social Security (US). You would not believe how many people were screaming that he's doomed, he'll never retire, he'll eat cat food for the rest of his life. A few pointed out the fact that with SS, his paid-off home, relative good health, and a very modest withdrawal of his 140k, it's doable. It won't be fancy or luxurious. There will be tight times, but it is doable. Heck, 140k divided by 30 years is 4666.00 a year which is 388.00 a month. Figure taxes depending on his setup, 300.00 a month which isn't life-changing but it isn't nothing either. In his case, the paid mortgage is instrumental in his retirement.

So as others have said, do not get discouraged by others' progress or what they say. Do Your best and keep figuring it out along the way the balance between OPs and pensions/savings. You'll get there. 

Durban

I mostly live on the pension board but the priority is to pay the mortgage off , which it will be next year. This is more for my husband as he feels uncomfortable prioritising pension over mortgage so we have compromised. 

We are both basic rate tax payers on ordinary salaries and the tax relief is still very good for pensions.

It does make more financial sense to prioritise pension over mortgage.  However , you can't beat the security and psychological factor of having your mortgage paid off.
Especially in these uncertain times

Thick_n_Thin

It’s good to know that I’m not the only one who thinks that the mortgage being paid off 1st is a good idea. I was hopeful for early retirement at 55 but was told on the pension board that my figures looked to low but I honestly think it’s doable. It will give me more of an incentive to get this mortgage gone in 3 years or as close to it as I can anyway, my lifestyle will have to be curtailed but I am prepared to do that and will happily go without certain things if it meant I could stop work or at the very least reduce them to very part time! 

Thick_n_Thin

So I’ve been completely neglecting my diary of late! Tiredness, lack of motivation and crappy work stuff all going on in the background has meant I’ve been awol! Still managing to keep hold of any spare cash I have and my biggest triumph this month is paying for OH’s car insurance in full! Never done that before! Payday tomorrow, not sure what this months overpayment will look like as I’m still on pay reduction and OH is still on furlough but as OH keeps reminding me we are lucky compared to some! 

MovingForwards

How fantastic paying the insurance in full! Don't think about O/P for this month, keep the money to one side each payday and when things are back to normal at work make the O/P, gives you a bit more financial stability in the interim 😉

Thick_n_Thin

so we managed a £100 overpayment and then to make the balence a nice round number I paid an additional £11.24. I really wanted to keep the momentum going with the overpayments so I have decided no matter how small amount it is something will be getting paid off extra each month. 

We have had news that our gym will be reopening at the end of the month however every session has to be booked in advance so no just turning up, this combined with the fact that I still don’t feel completely safe in busy places has lead me and OH to cancel our membership for the time being, it’s £56 per month for both of us so we have decided to pay that off the mortgage each month so I did that this evening so another overpayment made! I’m going to challenge myself to find another £33 this month and that will be a £200 overpayment this month when I originated thought I wouldn’t be able to make any! 

Grogged

That's great progress and a good repurpose of the gym money.
Like you I've kept the OP going by tidying the bank balance to the next £5 weekly. The usual (much bigger!) monthly OP is topping up our EF. Once things are more settled I'll repay the OPs back to the mortgage.
ATB G.

South_coast

Great MFW action - just when you think there is no more money to squeeze, you find a bit more 😀 The obsession is setting in!

Thick_n_Thin

Thanks south coast. I’m still being rubbish at updating my diary. Redundancy meetings are now taking place, fortunately my department hasn’t been affected just yet but I have absolutely no doubt that we will be in the next phase, I think possibly next year. Im not going to worry about it though until it happens, there’s so much uncertainty at the moment and I really haven’t got the energy to worry about something that may or may not happen. All I can do is focus on my plan and hope for the best and try to come up with a plan b just in case my fears are realised .