Saving for pension - any regrets?

[BolshieBastard]

Those of you folks that are locking away funds in pension, ever regretted it ? I mean not being able to access that money and all associated opportunity cost (like property perhaps)?
curious of you guys and gals approach to retirement

Regrets? Yeah, not putting enough money into a pension and instead relying on a Civil Service pension (22 years worth so good, inflation proofed but not the full monty) and state pension.

However much you're putting into your pension, double it but keep an eye of the LTA.

Once you retire, you're on your own. Our house is Council Tax Band E which according to Government should now be worth upto £579,000 so not eligible for the £150 quid handout for energy bills! Where I live in the North West, Band E houses are worth sub £300,000 not that 150 quid does much with these energy prices but the point is, you fall in that middle ground where the Government ignores you.

[otherkid89]

I've read through this thread and the general consensus seems to be investing as early as possible or a combination with other investments (i.e. property).

Any thoughts or experience on reducing pension contributions and using on overpayments for a mortgage? My logic for this scenario is that I'm 30, been contracting 4-5 years and have recently taken my first mortgage - the sooner I start overpaying, the sooner my interest rates will drop (or comparatively drop, given the BoE increases) and the sooner it's paid off.

As an aside, has anyone come across a general comparison in returns from Stakeholder Pension vs SIPPs? Currently deciding which route to pursue.

This has turned into a cry for advice, so I'm happy to be redirected to another thread if necessary.

[northernladuk]

I've read through this thread and the general consensus seems to be investing as early as possible or a combination with other investments (i.e. property).

Any thoughts or experience on reducing pension contributions and using on overpayments for a mortgage? My logic for this scenario is that I'm 30, been contracting 4-5 years and have recently taken my first mortgage - the sooner I start overpaying, the sooner my interest rates will drop (or comparatively drop, given the BoE increases) and the sooner it's paid off.

As an aside, has anyone come across a general comparison in returns from Stakeholder Pension vs SIPPs? Currently deciding which route to pursue.

This has turned into a cry for advice, so I'm happy to be redirected to another thread if necessary.

Mortgages are the cheapest way to borrow money by far. Even with the increases and potential future ones (well a few) a well invested ISAs and SIPPS can beat the interest on a mortgage let alone the savingo on tax so I'm more than happy to not pay it off early. That said I'm very careful about ringfencing my money. The money I've invested instead of paying of the mortgage stays separete and is not 'dipped in to' to any great extent. So many people save instread of overpaying and then spunk it on something they didn't really need or want until they found out they can afford it if you get me.

I'd save rather than pay mortgage off quicker but for it to work you've got to be pretty regimented. If you'll end up getting a new car with it when you fancy then I'd maybe go for the mortgage option.

All IMHO.

[WTFH]

Mortgages are the cheapest way to borrow money by far.

I agree.

I have taken a different approach (which may not make me a smart investor, or the richest), where I would prefer to have as few borrowings as possible. Borrowing is great if you're confident of repayment. When I was single I had less issue with borrowing than I have now, because any debt I may go into would potentially have to be paid off by my family if something happened to me. Since my wife's income is considerably less than mine, that would leave her in a difficult situation.
The same thing happened to one of my friends. He died age 49, and his wife was left with a huge mortgage, it's taken 8 years to get her finance problems down to a level where she could sell the house and buy a considerably smaller one in a cheaper location to make the mortgage bearable

[northernladuk]

He died age 49, and his wife was left with a huge mortgage, it's taken 8 years to get her finance problems down to a level where she could sell the house and buy a considerably smaller one in a cheaper location to make the mortgage bearable

Wouldn't life insurance cover this situation though?

[WTFH]

Wouldn't life insurance cover this situation though?

In her case, it only covered up to a point.

[northernladuk]

In her case, it only covered up to a point.

AH OK. With my plan to not pay the mortgage off until the last minute I've also made sure I'm well covered if anything happens to either of us so in the worst case it's covered and a bit. Should have made that point in my reply to OtherKid

[otherkid89]

I appreciate your opinions, it's definitely food for thought. That approach lends itself to what a high percentage seem to have followed; an ISA and SIPP.

I definitely agree on the life insurance aspect, regardless of any other investments.

[JoJoGabor]

Also do some maths if you're comparing a pension to an ISA and what your plans for retirement are. When you are on the younger side and if you are planning on taking a high income during retirement an ISA often works out a better investment. You dont get your 40% topup now in an ISA but if it grows as planned, the income at retirement is all tax free making it a much better investment

[BolshieBastard]

I appreciate your opinions, it's definitely food for thought. That approach lends itself to what a high percentage seem to have followed; an ISA and SIPP.

I definitely agree on the life insurance aspect, regardless of any other investments.

Get yourself a 'flexible' or repaid repay mortgage if you can. Best thing I ever did although good ones are incredibly hard to find now. When I approached Yorkshire Bank about extending the life of the facility about 10 years ago, they said they had replaced the product with a new version which wasnt as good and recommended I retained it until the end of term which is November this year.

I swapped a traditional repayment mortgage for a £100,000 Yorkshire Bank Rapid repay one late 1999 - 2000. Instead of paying £400+ a month on a £67,000 repayment mortgage, once we converted to the Rapid Repay, we were monthly 'repayment' free after about 18 months.

We had the ability to draw down on the RR any time we wanted without further reference to the bank upto the mortgage limit although this dropped by a couple of grand from the £100k every year. With contracting income, we never did do a further draw down.

It used to be financial advice was to retain a mortgage for the full term but frankly, Id rather stop paying a monthly mortgage and put the money to other uses.