brilliant as always, confirmed my position not to pay off mortgage early, and fortunately managed to get 10 year fix at circa 2% last year.. and will have just 1 year left at the end of the term .. happy smug and grateful
Great video, this is what I tell alot of my IT contractor colleagues who often go contracting late 40's, early 50's to pay off mortgage/build up pension/put kids through Uni etc. They see these decisions as binary i.e. if mortgage then take net wages today, rather than allocate to pension and pay down later tax efficiently. I think the government has alot to answer for as the minimum pension age for SIPP has moved from 50, to 55, and now to 57 - however keeping the TFC at 50 would have given people more flexibility.
Thanks Gary and I agree. I don't think there's an issue with the tax-free cash age remaining at 55 (instead of changing to 67). In fact, having the ability for it to be closer to that type of age as opposed to the State Pension Age can help incentivise pension saving. Appreciate you watching and taking the time to comment. 🙌
Thanks George I thought this was an excellent video and something to definitely think about, Especially as a 50 year old with a large mortgage and now that you can put up to 60K into pension
i have two years left on my fixed rate mortgage 1.6% and i have started takeing tax free cash every month from my SIPP its only £350 a month when my fixed rate ends i have a five year term left andi have worked out i can fund the mortgage out of my tax free cash for another 5 years them my mortgage is repayed age 70 I wil then start and take my taxable income from the SIPP so its worked out well for me
I think a dilemma many are facing right now is whether to cover the unexpected £200-300+ a month when exiting a fixed deal, by reducing DC pension contributions by a couple of percentage points?
The answer is a fine line of balancing here !!to retire with a mortgage will be a ball and chain around your neck option is to downsize use pension if enough and adjust your lifestyle my wife and I managed to be mortgage free 4yrs before retirement we both had small amounts in a superannuation fund and use that for items that have to be replaced if needed and a few holidays we intend to downsize our home as it’s very large and the maintenance will eat into any spare monies so common sense prevails
Thanks for watching. The issue with the NHS Scheme is as a defined benefit scheme the tax-free cash cannot be separated from the income. So depending on if you are 1995, 2008 or 2015 (slightly different rules for each), there may be earlier retirement factors which could reduce your pension income. I have overviewed this briefly at 3:35.
@@PrinciplesPersonalFinance Great Video, George. I foolishly withdrew my pension contributions under the 1995 scheme twenty years ago due to financial hardship and only received a refund of eight hundred pounds at the time. Fast forward, rejoined the scheme a few years ago. Never had an ISA but have paid 97 percent of my mortgage, My mortgage interest rate is 8.74 percent Standard Variable Rate from August 2023. The current Mortgage balance is 3393 pounds and the term left is 16 months. NPA is 68 which is in 11 years. I missed out on a year of not paying the full NI contribution so have been asked to consider paying the voluntary contribution of £824.20 before April 2025. Is it advisable to make the payment while on the DB Scheme ? I have 22 years of full NI contribution so far. As a part-timer, Is it better to just focus on additional pension purchases to make up for all the years of opting out? How would the Annual Allowance affect the pension contributions if I consider paying in installments for the next ten years? Could you create a video to help many Single parents in the scheme facing these challenges, Pls? Is it necessary for me to also focus on the ISA Cash buffer?
brilliant as always, confirmed my position not to pay off mortgage early, and fortunately managed to get 10 year fix at circa 2% last year.. and will have just 1 year left at the end of the term .. happy smug and grateful
Thanks for your kind words!! Glad also that you managed to avoid the pain of higher rates.
Appreciate you watching and taking the time to comment 🙌
Great video, this is what I tell alot of my IT contractor colleagues who often go contracting late 40's, early 50's to pay off mortgage/build up pension/put kids through Uni etc.
They see these decisions as binary i.e. if mortgage then take net wages today, rather than allocate to pension and pay down later tax efficiently.
I think the government has alot to answer for as the minimum pension age for SIPP has moved from 50, to 55, and now to 57 - however keeping the TFC at 50 would have given people more flexibility.
Thanks Gary and I agree. I don't think there's an issue with the tax-free cash age remaining at 55 (instead of changing to 67). In fact, having the ability for it to be closer to that type of age as opposed to the State Pension Age can help incentivise pension saving.
Appreciate you watching and taking the time to comment. 🙌
Brilliant content from Principles Personal Finance! Well thought out and explained.
Thanks David, as ever. Very grateful for your support 🙌
@@PrinciplesPersonalFinance My pleasure, George!
Thanks George I thought this was an excellent video and something to definitely think about, Especially as a 50 year old with a large mortgage and now that you can put up to 60K into pension
Thank you!
Very grateful for your kind words and for watching the content 🙌
i have two years left on my fixed rate mortgage 1.6% and i have started takeing tax free cash every month from my SIPP its only £350 a month when my fixed rate ends i have a five year term left andi have worked out i can fund the mortgage out of my tax free cash for another 5 years them my mortgage is repayed age 70 I wil then start and take my taxable income from the SIPP so its worked out well for me
Quality, do you work with an IFA?
I am an ex IFA so i do it myself with fidelity platform@@Equitybonds24
Sounds like it's worked out well! (Though this is not personal advice or an endorsement here! 🙃)
Thanks for watching 👍
I think a dilemma many are facing right now is whether to cover the unexpected £200-300+ a month when exiting a fixed deal, by reducing DC pension contributions by a couple of percentage points?
That's a good point!
Damn, wish I'd included that in the video. 🤔
Thanks for watching and appreciate the insight.
The answer is a fine line of balancing here !!to retire with a mortgage will be a ball and chain around your neck option is to downsize use pension if enough and adjust your lifestyle my wife and I managed to be mortgage free 4yrs before retirement we both had small amounts in a superannuation fund and use that for items that have to be replaced if needed and a few holidays we intend to downsize our home as it’s very large and the maintenance will eat into any spare monies so common sense prevails
Agree! It's certainly not an easy trade-off so is highly individual.
I appreciate you watching and taking the time to comment. 👏
Really good video, this gives a lot to think about. Thank you.,
Thank you, very grateful for you watching 🙌
Great videos as always from George.👍
Thanks Michael, appreciate you watching and your support!
All the best on your journey and let me know if I can help 🙌
Would this strategy not work for an NHS pension?
Thanks for watching. The issue with the NHS Scheme is as a defined benefit scheme the tax-free cash cannot be separated from the income. So depending on if you are 1995, 2008 or 2015 (slightly different rules for each), there may be earlier retirement factors which could reduce your pension income. I have overviewed this briefly at 3:35.
@@PrinciplesPersonalFinance Great Video, George. I foolishly withdrew my pension contributions under the 1995 scheme twenty years ago due to financial hardship and only received a refund of eight hundred pounds at the time. Fast forward, rejoined the scheme a few years ago. Never had an ISA but have paid 97 percent of my mortgage, My mortgage interest rate is 8.74 percent Standard Variable Rate from August 2023. The current Mortgage balance is 3393 pounds and the term left is 16 months. NPA is 68 which is in 11 years. I missed out on a year of not paying the full NI contribution so have been asked to consider paying the voluntary contribution of £824.20 before April 2025. Is it advisable to make the payment while on the DB Scheme ? I have 22 years of full NI contribution so far. As a part-timer, Is it better to just focus on additional pension purchases to make up for all the years of opting out? How would the Annual Allowance affect the pension contributions if I consider paying in installments for the next ten years? Could you create a video to help many Single parents in the scheme facing these challenges, Pls? Is it necessary for me to also focus on the ISA Cash buffer?
why does he keep saying LOOK. we are looking.