Mental health is a huge factor and "keep it simple-stupid" is not a bad self motto.
If paying off mortgage makes you feel happy, secure and life becomes more fun- do it.
It’s basic financial planning either through any pension arrangements or through a yearly form with HMRC.
If you're a higher rate tax payer, you can only get the extra 20% back via your tax return unless your company pays in gross (salary sacrifice).
Unless of course you know a better return than an instant 20%/40%.
Not quite that simple. It's really tax deferral. You get to pay into a pension tax free, but the money taken from the pension is then subject to tax at the time when you take it (and various key crystallisation stages). Currently you can take 25% (of up to just over £1m) tax free at 55. Given most higher rate tax payers probably won't be higher rate payers from their pension, you are still likely to pay less tax using a pension; but it's not guarenteed e.g. tax rates / thresholds could easily change etc.
Yes you get half the 40% via tax return every year. Its still 40%.
As for it being a tax deferral, yes partially, hence the need to a balanced strategy to maximise the fiscal incentive beyond the 0% on 25%. It is still a brilliant investment that easily beats paying off a 2% mortgage.
Footflaps is also forgetting that the extra 40% invested shoud be growing with the investment. 40% extra money working for me for a few years at little cost sounds ok to me.
Been overpaying for years now, come may we'll be into the last 2 years of our mortgage.
Having almost a grand a month to save will be worth the hard work. Granted, we could've invested and paid less and done better maybe, but I think the freedom of not having this round our necks will be so refreshing.
40% extra money working for me for a few years at little cost sounds ok to me.
All depends on the final tax rate when you draw it. Thanks to the falling pound, my SIPP is now over the lifetime allowance, so any gains will be taxed at over 55%. However, if we get a big stock market correction, that problem will go away.
If you are over the lifetime allowance why are you still in high risk investments such as equities?