The Mortgage Free in Three - Take 4 challenge (MFiT-T4)

I've updated but if I manage to pay any more off I will fill in another update form.
I'm going to be in the yellow, but...
I'm sub 50k :j :j :j

Hi trix a belle

Form submitted. Please to be in the £202ks - hopefully that keeps us well on track for this challenge and our aim to be under £200k in November

Thanks for keeping us right on the challenge

MIB x

Annaharky wrote: »

Not having the best month. First my car broke down followed by the washing machine and finally the boiler. Aaaaargh! Good job we still have 2 and a half years!

Sounds like our household:

TV stopped receiving Free Sat
Dishwasher - broken and filling randomly with water
Stop valves behind it are now leaking
Tubledrier - door handle broken
Car 1 - Sat-Nav upgrade failed - attempt 2 tomorrow
Car 2 - Air Con broken (either £10 Relay or £1000 Compressor)
Car 2 - 2 new front tyres
Car 2 Puncture, rear tyre
DH's Bike - Big Service and review after "laying it down" on a bend (£450)
DH's Bike - MOT & 2 tyres
Just paid deposit for replacement windows
Son's house (our rental) - Boiler fault
Son's house - replacement bath and shower waiting fitting in spare room
Son's house DG deposit taken

I tell you, the emergency fund looks pretty depleted at the moment.

It's all timing though, as you say. We just happened to commit to spend just as all white goods seem to be EOL

Hi FG

I'm a basic rate tax payer, only have an employer pension, no SIPP, but am contributing well beyond the employer match level. I guess that's comparable to just hitting the max employer match and investing the excess separately in a SIPP?

Everything paid into an ISA is already net of income tax, with the benefit of income from it being untaxed (unless the rules change in future). The pension is tax deferred, and if you are BR tax now and BR tax in retirement, it seems like a zero sum game (though if income lower in retirement, thanks to tax free allowance it usually isn't the case assuming you draw down over more years than you paid in, plus there's the 25% tfls to consider). Then again, ISAs are so much more flexible, especially if you are considering early retirement. Pros and cons to both.

At the moment I favour the pension, but can imagine in a few years time I will reduce what I pay into the pension and boost my ISA. Not for efficiency, rather to allow for the possibility of early retirement. There's also the fact that I don't like my money being held hostage, and there are no guarantees that the age at which pensions can be accessed won't go up in future. I think it's quite a personal decision, no "right" or "wrong" approach as it all depends on your plans for the future, how much premium for liquidity you're willing to pay, and how well you trust yourself to save not spend.

There's an excellent article weighing up ISAs and pensions on monevator. Well worth a read

Edit: Here's the article http://monevator.com/pensions-versus-isas/ - the first comment by ermine adds something that I missed - even at basic rate, salary sacrificing to a pension reduces the NI you have to pay. I don't think this applies to SIPPs, but my knowledge is extremely limited on this whole area so could well be wrong!