Mortgage Vs Pensions?

PaulJJ1981

Is it more financially viable to overpay on your mortgage to pay it off quicker, or pay any excess funds into your pension pot to increase the value?
I am assuming this is not an easy question to answer as it will depend on your individual circumstances.  Is there an online tool available whereby I input my information to gain an accurate answer to this query?

K_S

I hope @getmore4less comments on this thread, he/she compares the two very well.

getmore4less

Generally saving in a pension with tax relief going in and reasonable growth will out weigh the savings in interest over a similar period. 

I did a simple projection on another thread just a few days a go which covered similar subject of how long to keep your mortgage.
Mortgage Term - How do you decide? — MoneySavingExpert Forum

There are lot of factors that may have demands on your cash  especially early in your life like the need to upsize, get a bigger mortgage, try to keep LTV low for the best rates, kids, job security etc.

Once hitting 40% tax  pension is a great place to store spare money.
Still a case at 20%(32% with salary sacrifice) just the returns needed are higher.
Any matching buy employer  or if they also share the employer NI saving  sways pension first overpay second.

Some will go as far as interest only mortgage, all savings/investments, other are  mortgage first then pension.
The mortgage boards tend to be pro overpay, investment boards go the other way where you get the analysis of investing over paying off a mortgage

One thing many forget this is a long game, say you are settled by 40  a 30 year mortgage give 20 years to 60 with 10years wiggle room to still overpay later,  downsize into retirement, many won't be  touching that pension pot.

Plenty of time to adjust where spare cash goes on a long term plan(which needs a long term mortgage).
 

big_saver_5

I do both.
Pension for the long game but also want to retire early so paying off the mortgage early to enable me to do that 

Thrugelmir

Personal circumstances and objectives are key. The overriding factor is the inaccessibility of the pension fund monies until later life. Life is full of uncertainties.  Worth remembering that interest rates are still at emergency levels. One day the tide will change. Possibly more rapidly than people imagine. 

getmore4less

Thrugelmir said:

Personal circumstances and objectives are key. The overriding factor is the inaccessibility of the pension fund monies until later life. Life is full of uncertainties.  Worth remembering that interest rates are still at emergency levels. One day the tide will change. Possibly more rapidly than people imagine. 

Been there. 
High rates, higher inflation the debt goes down relatively.

Having the money in investments can be even better than now with low rates and inflation. 

Thrugelmir

getmore4less said:

Thrugelmir said:

Personal circumstances and objectives are key. The overriding factor is the inaccessibility of the pension fund monies until later life. Life is full of uncertainties.  Worth remembering that interest rates are still at emergency levels. One day the tide will change. Possibly more rapidly than people imagine. 

Having the money in investments can be even better than now with low rates and inflation. 

If people use their spare cash to invest. Then asset prices will rise. That's cause and effect. The danger arises when people don't actually understand what they are investing in. Nor the risks they are exposing themselves too.