What to do with savings ! ?

Hopefully I'm posting this in the correct place.

In the next few weeks we will have approx £210,000 in our savings account and I'm trying to work out what is best to do with it.

Our mortgage has approx £130,000 left on it over 19 years and the fixed rate runs out in May 2024. Currently we pay around £650 per month, that will go up.

I've an NHS pension ( 10 years ), works pension ( 5 -7 years ) and 2 other pensions that have been combined into one with around £40,000 in it. Partner has Gov pension of ( 30+ years )

I plan to pay some money in the the pension and I'd like to pay some off the house before remortgaging. But what's best.  Ideally I'd like some cash in the account to do work on the house, and for helping the kids etc.

Would I be best to pay the mortgage and use the money I'm saving each month to pay into the pension ? or pay some towards each etc ?

Any suggestions for a confused 54 year old.

Thanks
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  • eskbanker
    eskbanker Posts: 29,932
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    There's no right or wrong answer, but if the mortgage could be entirely cleared on expiry of the fixed rate, leaving £80K for other things, plus all the monthly surpluses from not having mortgage debt, then that would seem a desirable position to be in.

    However, only you know how much disposable income you have, how generous your existing pensions are, how much you'd want to spend on the house/kids, etc, etc....
  • born_again
    born_again Posts: 13,684
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    As above. I would pay off mortgage at end of fixed term. 
    End of the day, that is at least £650 a month in your pocket a month to play with. Would you get that amount of interest a month on the £130K?
    Life in the slow lane
  • Albermarle
    Albermarle Posts: 21,193
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    There is no black and white answer as everybody's situation is different and the details are important. For example.
    I plan to pay some money in the the pension how much? and I'd like to pay some off the house before remortgaging  How much ?. But what's best.  Ideally I'd like some cash in the account to do work on the house, How much ?and for helping the kids How Much ?etc.

    Would I be best to pay the mortgage - how big is it and at what interest rate ?and use the money I'm saving each month to pay into the pension ? or pay some towards each etc ?


     However the usual answer is to do a bit of everything, which seems to be the way your are thinking anyway.
  • Bigwheels1111
    Bigwheels1111 Posts: 2,255
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    The mortgage question is easy, but hard.
    What rate will your new mortgage be ?.
    Are fixed rate savings higher, if so savings should be the best option.
    The hard bit tax on savings.
    Personally I would pay off the mortgage and over pay your pension.
    But keep an emergency fund in easy access or an isa each with low access penalties, 60 or 90 days interest if possible.

    You have quite a few things you want to do, I would narrow them down a bit.
    What is most important to you right now.
    19 year of mortgage or paid off next month, let me think.

    I took out my mortgage at 31, paid it off at 42.
    Was a fantastic feeling.





  • JeffVader
    JeffVader Posts: 10
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    Hi,
    Thanks for the replies.

    The current rate is fixed until May 2024 at 1.59%, after that the best deal they are offering me is 4.44% fixed for 2 years. I like the idea of either paying it all off in full or paying a good amount off.

    I'm thinking of keeping around 40k in the bank / premium bonds to help the kids and do bits around the house and the reset into my pension.

    Any other thoughts ?
    Thanks

  • Archerychick
    Archerychick Posts: 194
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    I would not be paying that off until your fix ends because you’ll be able to earn more in savings at the moment. 
  • Andyjflet
    Andyjflet Posts: 524
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    Being mortgage free would be my goal here, 100%, that frees you to have all your income for yourself which you can then invest monthly elsewhere. You also eliminate thousands of pounds of interest! It will also help you plan for the future and gives you so many more choices in life. Go for it 
    Baby Step 6/7 - £63000 saved for emergency fund DEBT FREE !!!
  • JeffVader
    JeffVader Posts: 10
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    I've spoken to the bank this morning and if I pay it off now there will be nearly £4000 in early settlement fees.  If I pay it off on the day the fix rate ends then there are no fees.

    I'm planning to do this on that day and get the mortgage cleared :smile:

    I plan to add some of the remaining money to my pension and then pay in monthly using some of the money I'm saving not paying the mortgage.. That's the thinking so far.

    I have a meeting with a financial advisor on Monday so it will be interesting to see what he says.

    Thanks
  • Archerychick
    Archerychick Posts: 194
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    Nice! I’ve too got my calendar reminder set for the day my fix ends to pay mine off!
  • badger09
    badger09 Posts: 11,061
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    JeffVader said:
    I've spoken to the bank this morning and if I pay it off now there will be nearly £4000 in early settlement fees.  If I pay it off on the day the fix rate ends then there are no fees.

    I'm planning to do this on that day and get the mortgage cleared :smile:

    I plan to add some of the remaining money to my pension and then pay in monthly using some of the money I'm saving not paying the mortgage.. That's the thinking so far.

    I have a meeting with a financial advisor on Monday so it will be interesting to see what he says.

    Thanks
    BIB
    Hmm. Do you mean FA or IFA? The former may be no more than a sales person who can only ‘advise’ you to invest in products from his own company. An I (Independent) FA can look at the whole market. 
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