Fat Pension Vs Paying off mortgage early

[GreenerGrass]

I'm intrigued how many IT contractors value paying off the mortgage early ahead of building up a big pension, or indeed any pension.
The reason IT contractors tend to be "different" to the general population is we tend to have a higher disposable income, but no employers pension contributions. For permies with a generous pension scheme its more of a no brainer.

For contractors the temptation to make big mortgage overpayments, and into easy access investments like funds/ISAs, rather than into a pension is thus greater, especially if you think a bear market is looming and you have little control over exactly how its invested. Some pension funds are using bonds which are going to barely outperform inflation.

Any opinions?
Obviously a £500,000 pension is not much use if you drop dead at 67, whereas if you pay the mortgage off early you can go into semi-retirement a lot earlier, while you're still physically active and have your health.
After all, if you end up with naff all the government will bail you out in the end.

[milanbenes]

question is how big a pension pot do we need if we want to retire ?

then, what is the earliest age we can retire at with the pension pot ?

Milan.

[bogeyman]

FWIW I decided to freeze my pensions and pay the mortgage off 13 years ago.

Never regretted it.

[sasguru]

No brainer. Pay off mortgage early. If you're in your 30s when you do that then plenty of time to build up pension pot, especially if no mortgage payments

[DimPrawn]

As Tony Bliar would say

"look, it's like this. Everyone has a finite income. You can put money into a pension or you can max out your borrowing, buy the biggest house you can afford and concentrate on paying it off early."

"One one hand, you (may) have a pension and live in a crappy little house all your life and risk my mate Gordon swiping the pot in the name of 'fairness' or you enjoy a large spacious home with a big garden and then trade down the property ladder (or even better leave the UK) with a big wad of cash in your pocket (tax free)."

HTH

[sasguru]

As Tony Bliar would say

"look, it's like this. Everyone has a finite income. You can put money into a pension or you can max out your borrowing, buy the biggest house you can afford and concentrate on paying it off early."

"One one hand, you (may) have a pension and live in a crappy little house all your life and risk my mate Gordon swiping the pot in the name of 'fairness' or you enjoy a large spacious home with a big garden and then trade down the property ladder (or even better leave the UK) with a big wad of cash in your pocket (tax free)."

HTH

Only a matter of time before they introduce CGT on your main (sole) property.

[DimPrawn]

As Churchil would say

"Oh Yes".

[GreenerGrass]

Yes, trade down to a smaller house. Or even better a same size house outside the south east.
I've never understood people who live in an absolute tuliphole and spend loads on holidays. Why not just live somewhere nicer in the first place.
Often these are the same people who have a brand new, but rubbish, car every other year on finance.

IMO, if Labour try to introduce CGT on main residences, they will be voted out at the next election and banished for decades. I don't doubt the b*stards are thinking about it though.
That would be treble taxation, on income needed to buy, stamp duty and then when you sell.

[sasguru]

Yes, trade down to a smaller house. Or even better a same size house outside the south east.
I've never understood people who live in an absolute tuliphole and spend loads on holidays. Why not just live somewhere nicer in the first place.
Often these are the same people who have a brand new, but rubbish, car every other year on finance.

It's only fair. Everyone has a new car, innit?

[DimPrawn]

Yes, trade down to a smaller house. Or even better a same size house outside the south east.
I've never understood people who live in an absolute tuliphole and spend loads on holidays. Why not just live somewhere nicer in the first place.
Often these are the same people who have a brand new, but rubbish, car every other year on finance.

IMO, if Labour try to introduce CGT on main residences, they will be voted out at the next election and banished for decades. I don't doubt the b*stards are thinking about it though.

They can do it easily by stealth like they always do in the name of "fairness".

"We believe it is wrong for the rich to sell their large expensive houses without paying CGT"

"Therefore we will introduce CGT on wealthy individuals where their house are sold for over £1M pounds".

The stupid thick ***** known as the electorate will lap it up.

"Yeah rich scum, take that"

..before they realise that in a few more years even a modest house in the south will exceed the £1m mark.

tw@ts.