Advice please

happymum37

So I have posted on and off in here for a few years.  I have previously taken a career break and had planned to return to work in Jan.  Unfortunately the in-laws took ill so I have been caring for them. 

Current situation.  I'm 39 and have 5 years in a police pension. I have 21 years national insurance contributions so far so I will get a state pension if it exists then. 

Hubby has a small pension.  He's 44 and until this year contributed 5% into a pension and his company 3% . He's just now increased to 7% and company 3% 

His pot at the moment is £85,000.

Our remaining mortgage is 48k
We have 32k savings


So I'm now heading back to work on a further reduced wage as I will be caring for the in-laws. 

I will be working 18 hours a week.  With the spare income- 
Hubby wants to over pay the mortgage.  I want to overpay pensions. 

We will have 400 spare a month.  

My plan was 100 extra into my pension a month to plug my 6 year career break gap. 

Is it worth putting an extra 100 into hubbys and investing the rest in the mortgage or would you put more in our pension pots? Or invest elsewhere?

I'm so grateful for any advice. Thank you

Marcon

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Albermarle

The pension vs mortgage discussion is a very regular one on this forum and there are numerous threads about it .
There is no fixed answer and often comes down to personal preference .

Often the compromise is doing a bit of both.

so I will get a state pension if it exists then.  There is no obvious reason why it would not exist, so in the absence of being able to predict the future , then you should assume that it will . Although the age it will start to pay could well be 70  by the time you get there . 

happymum37

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

happymum37

Albermarle said:

The pension vs mortgage discussion is a very regular one on this forum and there are numerous threads about it .
There is no fixed answer and often comes down to personal preference .

Often the compromise is doing a bit of both.

so I will get a state pension if it exists then.  There is no obvious reason why it would not exist, so in the absence of being able to predict the future , then you should assume that it will . Although the age it will start to pay could well be 70  by the time you get there . 

Thank you for your reply. You have always replied to my posts I am very grateful

LHW99

happymum37 said:

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

Interest rate on the mortgage is one factor. But don't forget to check what would happen to the survivor in each case, given your current positions, because state pensions are now mainly not inheritable, so that could be quite a drop in survivor income. Also, you need enough pension to be able to use up all your tax free allowance (as well as him using his).

MX5huggy

Pension and/or LISA before you are 40. 

https://www.moneysavingexpert.com/savings/lifetime-isas/

You have enough savings to pay off the majority of the mortgage should interest rates rise significantly.

Marcon

happymum37 said:

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

Well, having read the thread you started 3 months ago saying you wanted to be mortgage free in 7 years...just wondered why something that was such a burning ambition so recently isn't quite so high on the shopping list now? I think you're right to consider sloshing some extra cash into your pension, so why not do both? Then the decision is simply how much in which...

jamesd

For financial efficiency the pension wins. Optimal is interest only or longest repayment term then repaying out of the pension tax free lump sum. This gets you pension tax relief and investment growth on your capital repayments, something you lose if you overpay with after tax money.

I retired a couple of years ago with a smallish interest only mortgage. About ten years to repayment date. If it bothered me, my investments are about nine times the mortgage and I can clear it whenever I like. It doesn't bother me so I stay invested, or last year, fully offset. The offset feature provides handy flexibility.

TVAS

The person who is gong to produce the better pension on full time earnings should be the one working and the other should be the carer. This looks like you should return to work full time as you have a DB pension. He will only be giving up a 3% employer cont (reduced to to pro rata for part time work. Have you considered this?

happymum37

LHW99 said:

happymum37 said:

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

Interest rate on the mortgage is one factor. But don't forget to check what would happen to the survivor in each case, given your current positions, because state pensions are now mainly not inheritable, so that could be quite a drop in survivor income. Also, you need enough pension to be able to use up all your tax free allowance (as well as him using his).

Thanks for the reply.  Mortgage rate is 0.85

We have life insurance that would mean the survivor would have no mortgage and not need to work ever ever again.  

What is the tax free allowance please? I'm basic rate tax payer so is he

Thank you