Advice on my best options

griffinsaver26

Looking for some advice on the best way to plan for retirement as well as use my savings wisely. 

Current situation, 44 years old, £150k mortgage with 18 years left to pay. Got 6 months buffer savings in various regular savers and premium bonds 

Have approx £5k additional savings sat in an account going to 0.01% interest this month!

Opened a S&S isa last month as my first step into investing - £100 month plus £1500 deposit. I’d like to build this to £5k this year then leave for 5-10 years and use for a dream holiday/travel

Pension wise I have a local government pension since 2000. 8,5% contribution, employer pays about 14%. Part is final salary and since 2014 it changed to average earnings. 

I’ve just started over paying on the mortgage - £200 per month fir now, upping to £350 from Jan

In terms of what I’m aiming for, my pension reduces massively if I take it early but I can’t face retiring at 67 so I’d like to go at 60.

Really confused as to my best options. Pension wise should I make more voluntary contributions or leave as is because it will be really decent at current levels. Over pay more on the mortgage? Invest in a S&S isa with vanguard for 15 years? Really confused! 

barnstar2077

I am 43, I don't think I can access my state pension until I am 68, possibly later.  I want to retire at 55 though.  I am putting money into a SIPP every month which I will eventually combine with the funds from my company pension to get me from 58 to 68 (I will keep withdrawing from it after I get SP, but greatly reduced amounts.)  I am also putting money into a S&S ISA to bridge the gap from 55 to 58.

You could do something similar, but assuming you would be penalised for taking your work pension earlier you could use a SIPP to bridge the gap and also overpay just enough on your mortgage so that your house is paid off for just as you hit 60.

thenewcomer

how much are you charged by the platform to invest £100 monthly?
i agreed with your intelligent plan of overpaying mortgage.
im also going to look into SIPP. thanks both.

Albermarle

Every platform has a different set of charges . Some suit high value investors, some suit regular investors , etc 
https://monevator.com/compare-uk-cheapest-online-brokers/

DiggerUK

You've got a good pension scheme, with a few promotions you will have a decent pension.  LGPS schemes can usually be claimed before state retirement age. Working into your sixties isn't as bad as imagined anyway, what they gonna do....fire you? would you care?

The mortgage needs paying asap, those 18 remaining years can easily be reduced to 8/10 years. Overpaying will give you a better cash flow and make it even easier to overpay. You have plenty of time left to decide what extra plans can be made for retirement with that extra cash. 

We are both retired LG workers and have all our retirement savings in gold, no regrets. Might not be for you, but an option to consider.

I see no real need for rainy day funds, no more than £6k max if you feel better with the idea. Clear the mortgage..._

grumiofoundation

DiggerUK said:

 Overpaying will give you a better cash flow and make it even easier to overpay. 

How does that work?

barnstar2077

I don't know what your current mortgage rate is, but most people would find it hard to find a cheaper way to borrow money than a mortgage.  Maximising over payments on your mortgage will make you feel better, but will it help you to achieve your goal of retiring at 60?  If you cannot decide you could always split your money between the different options.  Time to crunch some numbers!

griffinsaver26

Thank you for the comments so far. I think my strategy might be about right - a mixture of over paying the mortgage with some investments as well. 

A lot of my cash savings are budgeted to be spent throughout the year - annual insurances, car repairs, Christmas, holidays etc and I do like having a bit of a cash buffer for unexpected expenses but I’ve realised that I have surplus available that really should be used better. 

AlanP_2

Take a look at the AVC scheme you can have alongside your LGPS. Tax free on the way in and tax free on the way out (within generous limits).

Are you a Basic Rate or Higher Rate taxpayer? HR really benefits increased pension contributions of some kind.

Single or in a partnership? Look at overall situation if there is an "other" to consider.

griffinsaver26

Thanks AlanP.  I’ve read about over paying on the pension and got a bit mixed up with the two options. I’m a higher rate tax payer and got a partner whose pension is rubbish. If that helps. I’ll look into this AVC scheme. 

mooneysaver

How much of your portfolio is currently in gold? If you buy gold coins you pay no CGT and it has consistently been a profitable investment. I would recommend ensuring 60-63% of your property is in physical gold or gold ETFs.