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    • Escapar2020
    • By Escapar2020 5th Dec 17, 9:05 PM
    • 75Posts
    • 151Thanks
    Escapar2020
    OP mortgage or put money elsewhere
    • #1
    • 5th Dec 17, 9:05 PM
    OP mortgage or put money elsewhere 5th Dec 17 at 9:05 PM
    Hi all

    Retirement feels a very long way off, but I've been thinking about my financial planning so I can improve my worklife balance, possibly achieve early or semi retirememt sooner rather than later. I've got a thread over on the MFW board at http://forums.moneysavingexpert.com/showthread.php?t=5755807

    would love to hear any pearls of wisdom from here too

    Thanks
    Escapar2020
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
Page 1
    • atush
    • By atush 5th Dec 17, 9:17 PM
    • 16,700 Posts
    • 10,405 Thanks
    atush
    • #2
    • 5th Dec 17, 9:17 PM
    • #2
    • 5th Dec 17, 9:17 PM
    What is iur mtg rate? Do you have a work pension? Your tax rate?

    All things being equal- what you wont hear on the mtg free board is paying off a cheap mtg will bring you far less than pension saving.

    All things being equal means no debt apart from mtg, and an emergency savings cash pot of 3-12 months outgoings depending on age and circumstances.
    • kidmugsy
    • By kidmugsy 5th Dec 17, 9:26 PM
    • 10,539 Posts
    • 7,219 Thanks
    kidmugsy
    • #3
    • 5th Dec 17, 9:26 PM
    • #3
    • 5th Dec 17, 9:26 PM
    I've been overpaying on my mortgage for some years, but in earnest for the last 12 months, since I gained a promotion (and became a high rate tax payer). ...My current balance is [31,804], I'm on the SVR at 2.29% currently, the house is worth about 140k and I don't have any plans to ever move. ...
    Originally posted by Escapar2020

    Contribute enough to a pension of some sort to escape the 40% income tax. After that look around to see if there's still a better bet than overpaying. ISAs, maybe? High interest regular saver accounts?

    Why are you paying 2.29% on an LTV of about 20%? If anyone still provides remortgages on a sum as small as 30k consider getting one, and with a long life.
    Last edited by kidmugsy; 05-12-2017 at 9:31 PM. Reason: last para
    Free the dunston one next time too.
    • westv
    • By westv 5th Dec 17, 10:57 PM
    • 4,525 Posts
    • 2,122 Thanks
    westv
    • #4
    • 5th Dec 17, 10:57 PM
    • #4
    • 5th Dec 17, 10:57 PM
    I thought most lenders had a minimum value of 25k for mortgages but that might be out of date info.
    • Escapar2020
    • By Escapar2020 6th Dec 17, 7:29 AM
    • 75 Posts
    • 151 Thanks
    Escapar2020
    • #5
    • 6th Dec 17, 7:29 AM
    • #5
    • 6th Dec 17, 7:29 AM
    Thanks atush

    Ive put all my details in the MFW thread here: http://forums.moneysavingexpert.com/showthread.php?t=5755807, let me know if ive missed anything though
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
    • Escapar2020
    • By Escapar2020 6th Dec 17, 7:36 AM
    • 75 Posts
    • 151 Thanks
    Escapar2020
    • #6
    • 6th Dec 17, 7:36 AM
    • #6
    • 6th Dec 17, 7:36 AM
    Thanks kidmugsy

    I hadn't thought about paying more pension, so thanks, I'll look into it!

    Ive looked at switching mortgages, but have been put off by thenupfront setup costs and the limited ability to op
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
    • atush
    • By atush 6th Dec 17, 9:44 AM
    • 16,700 Posts
    • 10,405 Thanks
    atush
    • #7
    • 6th Dec 17, 9:44 AM
    • #7
    • 6th Dec 17, 9:44 AM
    As a 40% taxpayer, every 100 into your pension costs you 60.

    Isnt that a far better deal than overpaying?

    Stop overpaying.
    • Escapar2020
    • By Escapar2020 6th Dec 17, 8:45 PM
    • 75 Posts
    • 151 Thanks
    Escapar2020
    • #8
    • 6th Dec 17, 8:45 PM
    • #8
    • 6th Dec 17, 8:45 PM
    As a 40% taxpayer, every 100 into your pension costs you 60.

    Isnt that a far better deal than overpaying?

    Stop overpaying.
    Originally posted by atush
    Good point, well made! It would potentially mean that my money would be lcoked away for 20+ years, so would it help me to quit this job and change my lifestyle in a couple of years time?
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
    • Thrugelmir
    • By Thrugelmir 6th Dec 17, 8:59 PM
    • 58,475 Posts
    • 51,848 Thanks
    Thrugelmir
    • #9
    • 6th Dec 17, 8:59 PM
    • #9
    • 6th Dec 17, 8:59 PM
    Good point, well made! It would potentially mean that my money would be lcoked away for 20+ years, so would it help me to quit this job and change my lifestyle in a couple of years time?
    Originally posted by Escapar2020
    Spread your money across the options. Then you change easily direction as the future unfolds. The one certainty in life, is uncertainty.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • atush
    • By atush 6th Dec 17, 9:14 PM
    • 16,700 Posts
    • 10,405 Thanks
    atush
    Thanks atush

    Ive put all my details in the MFW thread here: http://forums.moneysavingexpert.com/showthread.php?t=5755807, let me know if ive missed anything though
    Originally posted by Escapar2020
    Sorry not a link chaser.

    Put relevant details in your OP here- copy and paste if you like.
    • atush
    • By atush 6th Dec 17, 9:18 PM
    • 16,700 Posts
    • 10,405 Thanks
    atush
    Good point, well made! It would potentially mean that my money would be lcoked away for 20+ years, so would it help me to quit this job and change my lifestyle in a couple of years time?
    Originally posted by Escapar2020

    Again, not a link chaser- age?

    Given you cant get at pension before 55, you do need cash pot and perhaps S&S isas too- esp if your escape to a less stressful job is to be before 55.'

    But who knows how long 40% TR will last? I say fill your boots while you can.
    • Thrugelmir
    • By Thrugelmir 6th Dec 17, 9:44 PM
    • 58,475 Posts
    • 51,848 Thanks
    Thrugelmir
    esp if your escape to a less stressful job is to be before 55.'
    Originally posted by atush
    Sometimes losing one's career job isn't a voluntary decision. Once off the ladder can be tough to get back on. .
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • AnotherJoe
    • By AnotherJoe 7th Dec 17, 8:25 AM
    • 9,406 Posts
    • 10,393 Thanks
    AnotherJoe
    Good point, well made! It would potentially mean that my money would be lcoked away for 20+ years, so would it help me to quit this job and change my lifestyle in a couple of years time?
    Originally posted by Escapar2020
    It wouldnt be 20 years. At present it would be 10*, when you are 55. In return for that youd get a massive tax benefit, one which, BTW, is unlikely to last much longer (the extra tax relief on high rate taxpayers) so OP now and saving more into a pension later is a risky proposition, the other way round ensures you take the substantial tax benefit whilst you can.

    IMO posting on the MFW board is unlikely to be helpful to you, as it seems mostly populated by people self congratulating themselves on the sacrifices they are making to get rid of their mortgages, and ignoring other options such as significantly improving their pension position via tax relief.

    My apologies to the MFW denizens if Im doing them a disservice but you rarely see anyone there pointing out how much money they lost by forgoing 40% tax relief, instead its all about how they sold something on eBay for a tenner and how thats reduced their mortgage.

    Any more comments on what to do with the money is really dependent on the age you plan to retire and how youd bridge the gao between then, being able to claim private pensions at age 55, works pensions at various later ages, and then SP at 67 or so. Eg you need a plan. And that plan should most likely factor in being able to take 20% free money sav3 now, at age 55 .


    *Nothings guaranteed but it also seems likely that you are safe for it remaining 55 for you since they would most likely give 10 years notice.
    Last edited by AnotherJoe; 07-12-2017 at 8:27 AM.
    • atush
    • By atush 7th Dec 17, 9:00 AM
    • 16,700 Posts
    • 10,405 Thanks
    atush
    Sometimes losing one's career job isn't a voluntary decision. Once off the ladder can be tough to get back on. .
    Originally posted by Thrugelmir
    Stating the obvious.

    But But op wants a plan. And using a pension as a higher rate taxpayer is a good one. Losing your job is what your emergency cash pot and non pension investments are for.
    • justme111
    • By justme111 7th Dec 17, 9:34 AM
    • 2,987 Posts
    • 2,879 Thanks
    justme111
    when you know that you sorted from 55 onwards it takes the pressure off now so it does benefit now .
    • Escapar2020
    • By Escapar2020 7th Dec 17, 7:30 PM
    • 75 Posts
    • 151 Thanks
    Escapar2020
    It wouldnt be 20 years. At present it would be 10*, when you are 55. In return for that youd get a massive tax benefit.
    Originally posted by AnotherJoe
    The penny is starting to drop
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
    • Escapar2020
    • By Escapar2020 7th Dec 17, 7:33 PM
    • 75 Posts
    • 151 Thanks
    Escapar2020
    IMO posting on the MFW board is unlikely to be helpful to you, as it seems mostly populated by people self congratulating themselves on the sacrifices they are making to get rid of their mortgages, and ignoring other options such as significantly improving their pension position via tax relief.

    My apologies to the MFW denizens if Im doing them a disservice but you rarely see anyone there pointing out how much money they lost by forgoing 40% tax relief, instead its all about how they sold something on eBay for a tenner and how thats reduced their mortgage..
    Originally posted by AnotherJoe
    That's why I thought I'd drop in here, glad I did
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
    • Escapar2020
    • By Escapar2020 7th Dec 17, 7:41 PM
    • 75 Posts
    • 151 Thanks
    Escapar2020
    Any more comments on what to do with the money is really dependent on the age you plan to retire and how youd bridge the gao between then, being able to claim private pensions at age 55, works pensions at various later ages, and then SP at 67 or so. Eg you need a plan. And that plan should most likely factor in being able to take 20% free money sav3 now, at age 55 .


    *Nothings guaranteed but it also seems likely that you are safe for it remaining 55 for you since they would most likely give 10 years notice.
    Originally posted by AnotherJoe
    You're right about needing a plan, thats partly why Im here so I can work out what my options are. I'm not sure what sort of retirement I want, semi or full, I think semi ASAP, possibly leading to full much later. What ever plan I make now will probably change, the main thing I want is the flexibility to make more choices about life and work.

    Oh, and if anyone can tell me how tonuse the multiquote tool on here, id be grateful!
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
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