Save or pension?

Miss_Penelope

I am currently going through a separation, but unfortunately we are having to live together until we put the house on the market and sell it. I have an emergency fund of 6 months expenses.  A paid off car and no other debt but a mortgage.  Should I stop pension contributions and just stash cash until I have bought a new home or continue paying into it and have a bigger mortgage? I’m in my 50s and having to start over again. 

tacpot12

I think I might well stop any pension contributions that were above the standard level of contributions to your workplace pension (if you are working), but you should keep paying into your pension a bit if you can do so.

not2plan

Really depends on how much savings you have, how much pension you have, if your separation includes financial benefit or detriment to you, how much a house if going to cost you, how much you earn, when you want to retire, etc etc

Too many variables.

LHW99

Have you worked out how much you would need to get something you would be happy with in your area - small flat, small terraced house?

1) What would be the maximum mortgage you would be likely to need? Could you afford the repayments from salary and deposit from savings/ 50% house funds?

2) If not, and you stopped your pension payments would you then be able to increase the deposit from the extra savings / 50% house and then afford the mortgage repayments.?

The answers should tell you if additional savings or continuing pension will get you where you want to be.

However, as tacpot12 says, doing both savings and pension would be the ideal, if you can still get somewhere to live. Having a pension means you can likely retire at least at SP age, even if no earlier.

Albermarle

Have you agreed with your ex partner, exactly the terms of the financial split?
We see many problems coming up on the forum, where couples have agreed to sell the house but not addressed any other issues, and this can come back to haunt them later.
This mainly relates to married couples getting divorced, but the general point is valid for all splitting couples.

Bostonerimus1

Your 6 months emergency fund is exactly for times like this. I would keep doing pension contributions because of the tax advantages and this "separation" won't change you needing a retirement pension pot.