How much debt you in ?

[dazzer6666]

Absolutely this.

Plan to be unencumbered by mid fifties. This changes evening at this point as to what I have to do or not.

100%………as well as the increased flexibility it has a huge psychological impact too. For me it meant a complete change of mindset at work which I hadn’t anticipated - from ‘I have to keep this job/do well to pay the mortgage’ etc to ‘I don’t actually have to stay here, they probably need me more than I need them’. Became much better at my job as a result (and moved fairly soon after).

 

[Paulie Gualtieri]

100%………as well as the increased flexibility it has a huge psychological impact too. For me it meant a complete change of mindset at work which I hadn’t anticipated - from ‘I have to keep this job/do well to pay the mortgage’ etc to ‘I don’t actually have to stay here, they probably need me more than I need them’. Became much better at my job as a result (and moved fairly soon after).

Absolutely, I suppose the flip side is, if I can still stomach the job mid fifties (assuming hybrid still!) can look to maximise my 40k a year pension allowance for a few years - which adds more comfort when the time comes.

 

[Ding Dong !]

Two properties mortgage free, no loans , no debt, and six figure + sum in savings. All good thankfully.

 

[Weststander]

I am wrestling with the dilemma of using some of my tax free lump sum in August to zap all my remaing debts/some of my debts/not at all.

I won't be retiring for a few years and will still be paying into my other pensions until then, but that lump sum is a tempting silver bullet, although I get the "taking money from my future self" argument.

However, resetting my finances once and for all is also surely benefitting my "future self". Oh well, 6 months to keep changing my mind on the matter.

A purely personal view, I believe that all interest-bearing debts should be paid off as earliest as possible. It doesn't appear that investments will grow exponentially anytime soon.

But don't draw more than the tax free lump sum, without first carefully considering:
https://www.moneyhelper.org.uk/en/p...nnual,the MPAA, this reduces to £4,000 a year.

 

[Shropshire Seagull]

Also no point in being the richest man in the graveyard

Very true ...

But equally not good to be early to the graveyard by worrying about debts?
I think the mental health aspect of living with debt should not be underestimated.

 

[Audax]

I am wrestling with the dilemma of using some of my tax free lump sum in August to zap all my remaing debts/some of my debts/not at all.

I won't be retiring for a few years and will still be paying into my other pensions until then, but that lump sum is a tempting silver bullet, although I get the "taking money from my future self" argument.

However, resetting my finances once and for all is also surely benefitting my "future self". Oh well, 6 months to keep changing my mind on the matter.

I guess a lot depends on how big an impact that reset has. How much of your monthly budget gets freed up as a result of clearing the debts? What proportion of the total budget is it? If you clear it, how much of it can you then shovel into savings/ (safe) investments without having an adverse impact on your current quality of life?

My wife and I are looking at clearing off our mortgage early (via 10% yearly overpayments that don't attract a penalty fee) within the next few years. That'll free up around 8% of our combined take-home budget. Some of that, I'll then shove into increasing my voluntary pension contributions (because I'm behind on where I should be at this point in life thanks to a late start in a proper career). Some we'll put into long term savings, and some will go directly into a holiday fund so I can get back to Australia to see my family more frequently than every 8th year...

 

[Herr Tubthumper]

Two properties mortgage free, no loans , no debt, and six figure + sum in savings. All good thankfully.

You are nothing compared to @Steve Foster

 

[Cornwallboy]

Absolutely this.

Plan to be unencumbered by mid fifties. This changes evening at this point as to what I have to do or not.

How much will a lender allow you to overpay each year? Is it 10%? Or does it vary per lender?

 

[dazzer6666]

How much will a lender allow you to overpay each year? Is it 10%? Or does it vary per lender?

Varies per product, let alone lender…….need to check the specific T&C of the actual mortgage

 

[Cornwallboy]

Varies per product, let alone lender…….need to check the specific T&C of the actual mortgage

Thanks Dazzer.

 

[dazzer6666]

Thanks Dazzer.

Good explanation here, plus a link to a useful calculator that allows you to see how overpaying affects the term

https://www.moneysupermarket.com/mortgages/mortgage-overpayments/

 

[Cornwallboy]

Good explanation here, plus a link to a useful calculator that allows you to see how overpaying affects the term

https://www.moneysupermarket.com/mortgages/mortgage-overpayments/

Cheers. It's got me thinking.

 

[The Seagull]

Either everybody is brilliant with their finances OR the ones who are shit are staying well clear of this topic ! Never seen so many goody goody financial wizards on here before

 

[dazzer6666]

Either everybody is brilliant with their finances OR the ones who are shit are staying well clear of this topic ! Never seen so many goody goody financial wizards on here before

….or they’re old

 

[Tim Over Whelmed]

A purely personal view, I believe that all interest-bearing debts should be paid off as earliest as possible. It doesn't appear that investments will grow exponentially anytime soon.

But don't draw more than the tax free lump sum, without first carefully considering:
https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/money-purchase-annual-allowance-mpaa#:~:text=This is known as the Money Purchase Annual,the MPAA, this reduces to £4,000 a year.

Have to say my pension pot has caught up with where it was before Ms Truss decided to smash it into the deep sea!

 

[Tim Over Whelmed]

A purely personal view, I believe that all interest-bearing debts should be paid off as earliest as possible. It doesn't appear that investments will grow exponentially anytime soon.

But don't draw more than the tax free lump sum, without first carefully considering:
https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/money-purchase-annual-allowance-mpaa#:~:text=This is known as the Money Purchase Annual,the MPAA, this reduces to £4,000 a year.

Yes, haven't touched the lump sum as yet, it would've been a lot less than it is now. Feel really sorry for anyone that's ill advised and / or has had to take theirs, there are an awful lot of very poor financial advisers out there, and a few very good ones.

 

[dazzer6666]

Have to say my pension pot has caught up with where it was before Ms Truss decided to smash it into the deep sea!

Odd times…….the traditional ‘low risk’, conservatively-invested portfolios (ie lots of pension funds) got hammered relative to those spread across higher risk investments. Was chatting to an IFA earlier in the week who has had many difficult meetings in the last few weeks.

 

[WATFORD zero]

Either everybody is brilliant with their finances OR the ones who are shit are staying well clear of this topic ! Never seen so many goody goody financial wizards on here before

I left school at 15, did some really stupid stuff and got into debt when I was young and never ever considered my pension until I was 40. But I did learn from my mistakes

 

[timbha]

Odd times…….the traditional ‘low risk’, conservatively-invested portfolios (ie lots of pension funds) got hammered relative to those spread across higher risk investments. Was chatting to an IFA earlier in the week who has had many difficult meetings in the last few weeks.

Luckily I’m in a defined benefits pension scheme. Out of curiosity I requested a transfer value in Jan 22 and then again in Jan 23. The TV has fallen by around 30%. I had no intention of transferring and certainly won’t be changing my mind. Little wonder the pension provider asked me if I was being pressured into transferring out!!

 

[dazzer6666]

Luckily I’m in a defined benefits pension scheme. Out of curiosity I requested a transfer value in Jan 22 and then again in Jan 23. The TV has fallen by around 30%. I had no intention of transferring and certainly won’t be changing my mind. Little wonder the pension provider asked me if I was being pressured into transferring out!!

It was a DC transfer in this case (hence the call was a waste of time really). Would struggle to find an IFA prepared to advise anyone in a DB scheme to transfer out now - so tightly regulated they won’t take the risk (probably rightly). Glad I pulled my modest DB scheme out when I did though, worked for me