AVC/new investor help please

AliceBanned

Thanks cloud_dog, I think I need to do some research before I move the pot but I'm keen to learn enough to choose funds for my self, and safely as it's quite daunting! But I agree a more concerted effort is needed and I am in a position to save now but I am also weighing up whether to throw more at my mortgage as it's £176k. I could downsize later on but in reality wouldn't want to downsize too much and might not want to move to a cheaper area though I'm in Hertfordshire so the property is quite a good investment too.

I'd like more in early retirement too, maybe flexible retirement before 65 if I can but I can't see it happening at the moment.

I am close to the HRT threshold so with inflation will go over it soon so the AVC makes a lot of sense, but mortgage interest has gone up to 4.99% for the next two years..so tempted to throw spare funds at that..I may have to do a bit of each.

cloud_dog

It is a bit of a tricky one TBH, and how you choose utilise your available money is going to come down to personal choice.  With a mortgage rate of 4.99% I might be tempted to give that some focus as I wouldn't want to be having that sized mortgage outstanding entering retirement.  As you say you could downsize but is that something you want to do or is that a forced consideration due to finances?

AliceBanned

It would probably be a forced consideration - at least I would prefer it to be a choice. The difference in property values around the country does make it look a good option but in reality socially it could be terrible. I’m tempted to overpay the mortgage but also pay into an AVC. 

AliceBanned

On that note I have a spare room so am considering getting a lodger for 6 months or so. Not sure I could do it long term.

AliceBanned

Hi I just came back to my thread as I am reviewing the situation again. My DC pension has increased by almost £10k in less than a year - I saw earlier in the thread it had lost as much so it is now standing at almost £100k. I presume this is typical and taking into account inflation may not be as good as it made me feel.

So my situation hasn't yet improved much but I've continued with the £200pm into the AVC for now, and some regular savings at 8% with Nationwide but it is taking a while to get things off the ground, due to credit cards and mortgage. In theory I should have plenty of disposable income but I need to pay off over £10k credit cards (at 0%) and trying to do this quickly, and live as frugally as I can because they are preventing me from saving and more importantly are stressful. I think I'm on the right track, but it's a long one..

I've looked back at the advice I was given on this thread and it's so helpful when I need a reminder of my options.

bucksman

From bitter expereince (with an old PRU AVC) do check the investment plan that you are enrolled on and review the costs associated with this product.