Paying off our mortgage early

TheAble

[Deleted User] said:

tigergambit said:

Are you both making maximum pension contributions each year? Hard to get 20% on anything these days.

Or even 25%. An £8000 contribution, for example, is grossed up to £10000. 

If a higher rate taxpayer a £10000 addition to a pension pot could end up costing £6000!

Thought is needed here too though. If you have catching up to do on your pension contributions, then yes this is a great deal.

On the other hand if you've more in your pension than you're ever going to be likely to spend (there's growth to bear in mind both before and during your retirement; additionally your outgoings in retirement are likely to be lower) then piling up even more into the pot, for all it saves tax now, is also questionable.

Put it this way. Would you rather have £6 net to spend now, or £10 gross, plus growth, that you may never need later? The latter option may save on today's tax bill, but then today's net may yet be more valuable to the individual.

MEM62

TheAble said:

[Deleted User] said:

tigergambit said:

Are you both making maximum pension contributions each year? Hard to get 20% on anything these days.

Or even 25%. An £8000 contribution, for example, is grossed up to £10000. 

If a higher rate taxpayer a £10000 addition to a pension pot could end up costing £6000!

On the other hand if you've more in your pension than you're ever going to be likely to spend (there's growth to bear in mind both before and during your retirement; additionally your outgoings in retirement are likely to be lower) then piling up even more into the pot, for all it saves tax now, is also questionable.

Very, very few would be in that position at the OP's age and I very much doubt that the OP is.  .  

tigergambit

TheAble said:

[Deleted User] said:

tigergambit said:

Are you both making maximum pension contributions each year? Hard to get 20% on anything these days.

Or even 25%. An £8000 contribution, for example, is grossed up to £10000. 

If a higher rate taxpayer a £10000 addition to a pension pot could end up costing £6000!

Thought is needed here too though. If you have catching up to do on your pension contributions, then yes this is a great deal.

On the other hand if you've more in your pension than you're ever going to be likely to spend (there's growth to bear in mind both before and during your retirement; additionally your outgoings in retirement are likely to be lower) then piling up even more into the pot, for all it saves tax now, is also questionable.

Put it this way. Would you rather have £6 net to spend now, or £10 gross, plus growth, that you may never need later? The latter option may save on today's tax bill, but then today's net may yet be more valuable to the individual.

Yes, I think the OP really needs some professional advice from a good IFA. They are fortunate to be in such a good position financially and making the right choices now should secure their future.