Buying house and retirement planing

peterhjohnson

thegreenone said:

Once the children have left home you can always downsize to a smaller house to help provide for your retirement.  

Yet another option at that point might be to take Equity Release

JJG1984

Does your employer offer salary sacrifice; with this you reduce your gross salary meaning you pay less NI. more money into your pension with less impact on your NET pay 

as said never stop a work based pension as saving for retirement before tax with relief is far greater than anything you save post tax in the current market 

if your a 20% tax payer £100 pension cost you £80, 60% the same £100 costs you £60 

ProDave

Buy the large house now for the familly.  Pay as much into your pension as you can, even if that is less than if you had bought the small house.

When you want to retire, the familly will have left home. Sell the large house, buy a smaller one, possibly moving to a cheaper area as well (now the need for employment is not keeping you there) and you will have a pot of tax free money to suplement your retirement.

Sistergold

Buy big house now, with time you will find paying for mortgage will somehow get lighter, children will grow and wife can start working thus increasing family income and also reason why not to buy small house now. So basically in a few years all children will be in school and thus you can quickly start saving for retirement so best max out now based on one salary get the most space so as to not need to move again soon. 

abdus

JJG1984 said:

Does your employer offer salary sacrifice; with this you reduce your gross salary meaning you pay less NI. more money into your pension with less impact on your NET pay 

as said never stop a work based pension as saving for retirement before tax with relief is far greater than anything you save post tax in the current market 

if your a 20% tax payer £100 pension cost you £80, 60% the same £100 costs you £60 

Thanks you, great point about Salary Sacrifice.

I think my employer do this scheme. But need to find out if my pension based on this or not.

abdus

Sistergold said:

Buy big house now, with time you will find paying for mortgage will somehow get lighter, children will grow and wife can start working thus increasing family income and also reason why not to buy small house now. So basically in a few years all children will be in school and thus you can quickly start saving for retirement so best max out now based on one salary get the most space so as to not need to move again soon. 

Thanks SisterGold.

I feel very incline towards the max value i can afford for mortgage. My fear of having big house and not able to save for retirement is slowly fading away

Although I have permanent job but some other fears surrounds me like what will happen if I lost the job and not able to pay mortgage? - if i had small monthly mortgage payment then easy to pay with temporary jobs.

nicknameless

As I said earlier if you ask on a different board you will get different answers.  A house is not an income.

abdus

nicknameless said:

As I said earlier if you ask on a different board you will get different answers.  A house is not an income.

Thanks Nicknameless.

Yes, its worth get opinion from Pension forum on this matter.

georgehere

The answer is you have to balance both!

There is some great property advice here - now post in Pensions Forum

At the minimum, keep up the work pension AND if that scheme allows you to add more that is matched with more by your employer - do that (or at least some of that). With that in place, you have the makings of a good retirement plan as you also have the state pension.
Then whatever you have left goes to the mortgage.

As time goes on you may be able to add more to savings through ISAs or other tax free savings vehicles. Or buy a bigger house if you think property is a better investment/savings mechanism.