To pay off my mortgage or save for pension ?

Have you overpaid at all?

If not, I'd consider doing that first so that you can take a mortgage holiday if you need to without affecting your credit rating if things were ever to get difficult.

What are/were the tax advantages of a mortgage? Can't think what they are if you are in the UK, unless you go back the the Thatcher years and MIRAS.

It doesn't have to be all or nothing.

Given you have 20 years until retirement, it's very likely that the right answer (from a purely financial perspective) is to put money into your pension- you will get the tax back on on it so it's immediately worth at least 25% more, and it's very likely to grow at a rate that exceeds the interest rate on your mortgage. This is the approach DH and I have taken- when we were younger we put everything into investments and let the mortgage just tick along. Now we are about 5 years off retirement we're overpaying the mortgage. Doing it that way round has been massively the right thing for us as we've gained a huge amount of investment growth which has compounded over 20 years.

However, there are things to consider other than the purely financial. The feeling of security that will come from paying your mortgage off is genuinely valuable and not to be discounted, especially as you are a freelancer.

In your shoes I think I'd probably make sure I had a decent emergency fund first (at least 3 months' expenses), then focus on the pension, but you wouldn't be crazy to overpay the mortgage as well if this would increase your quality fo life now by making you feel more secure.

Just in general, run the tax savings and compound interest on pensions - you can take it at 57 for a dc pot. I freelanced through my 30s and didn’t make pension contributions - I lost 10 years of compound interest on pension gains.
the average stock market return has been 8 percent pa in that time.

Money and savings isn't a question of Maths alone we all have different ways of thinking for some the peace of mind from being mortgage free outweighs other things, the average age of death from birth for a woman is 80, however if you are in good health at 65 the average life expectancy is over 85, the vast majority of people reach pension age over 85%, (the 15%that don't includes infant mortality and accidents etcs)so saving for retirement is sensible

Paying off your mortgage makes no difference when it comes to moving, you would be a cash buyer.

Mathematically it is true that money in a stocks and shares ISA say a FTSe 100 tracker will grow at roughly 8%per year , this being the average annual growth of stock market over decades, will yield far more money than what you gain from repaying mortgage but being completely debt free matters more to some.

I would suggest a hybrid approach make some overpayments on mortgage but invest in a pension as it counts as before tax so the equivalent of 20% boost you can shorten term of mortgage so instead of 25-30years go for 15years .

If at all possible I would aim to be mortgage free by 55, if you are still healthy you have 10-12years to save that money for retirement, if you are struggling the lack of a mortgage payment could allow you to work less hours or even retire early

Money invested at 8% doubles roughly every 9years but at 3.5% the average savings account rate it takes 20years to double

My elderly mum lives in a self contained annexe to our bungalow and although I don't want to think of life without her, when the time comes we would consider renting her bungalow as an Airbnb. When you're old, expenses for holidays/socialising/hobbies are far less than when you're young/middle aged. We've been there, done that, and now live a far more relaxed life which costs nothing!

Just be aware that a private pension is taken off any benefits you may ever claim. While mortgage free, or having a low mortgage, you will always gain. As a single person you may need top up benefits in the case of illness/disability etc.

I'd probably try to do some of each. There are big tax advantages to saving into your pension, but it's a long way off for you. And as another freelance, the security of knowing you are securely housed if work dries up is very comforting.

If I had my time again, I would have either aggressively invested in stocks and shares ISA OR upsized my property and ridden the capital gain. However that latter option now makes no financial sense given the market is tanking.

A previous poster is right: investing in shares now through an ISA would give you the option to pay off lump sums once it grows.

There are so many variables here and it really depends on what your objective is. From a purely financial perspective, it's almost certainly best to contribute to a SIPP given the tax relief and the potential for growth while you're still young. If you wait until your mortgage is paid off, compounding will have much less of an effect.

You don't say whether you're a higher rate tax payer, but if you are this argument is even more compelling. If it's security and peace of mind you're looking for then that's a strong argument for paying off the mortgage. That being said, with my current rate low, I've been focussing on the pension to such an extent that I could stop contributions and still have enough income at 60- compounding will do the heavy lifting for me now. That in itself is enormous peace of mind.

Finally, it may be worth asking ChatGPT your exact query, it will ask additional relevant questions and help you come to a decision.

There are lots of considerations. How are you going to fund your retirement? Can you sell and downsize to free up some cash? Would state pension be enough to pay your bills and give you a quality of life that you want? I'd probably have said pay off the mortgage if you were living in something like a four bed where you could easily downsize to a two bed flat and have cash to live off.

In the last 12 months I increased my pension payments and then got a terminal diagnosis. I'll never see the benefit of my pension and I can't take it all until I have less than 12 months left to live. I'm still adding to it whilst working because the returns on it are still higher than if I put the money into a savings account. However we still have a mortgage of 200k left, maybe we should have overpaid on it. Thankfully I have life insurance so the mortgage will be paid off.

So many things to think of including ill health before state pension age and not being able to work and losing your job as examples.

We paid off our mortgage by downsizing many years ago against the advice of our accountant who wanted us to maintain the then tax advantages of having a mortgage. I cannot begin to tell you how freeing it was to have our housing costs gone!

And if you do live past state pension age… what will you do to fund yourself, given you currently at present will only have access to a state pension?

I'd overpay it, without making yourself short for leisure/entertainment. To be mortgage free at 44 sounds great. You will be young enough to enjoy holidays/leisure pursuits etc., without the problems that old age can bring eg. arthritis/rheumatism/other health concerns. So many of my friends had plans for their retirement, only to be plagued by illness or worse dead. Make the most of being young and fit, old age creeps up on you before you know it. Not having a private pension isn't a concern of mine, recent circumstances have given me a YOLO attitude, I'm 7 years away from getting a state pension and I'll reassess things then (if I'm lucky enough to still be here.)

How much is your income / how much is servicing the debt costing you?

IMO paying your mortgage off isn’t worthwhile.

Given your position as a single person and freelancer - I’d probably prioritise some pension saving (tax efficient), plus put money in a S&S ISA so you have cash you can access before you are 57. Maybe 50/50 on these - this gives future cash but also accessible cash for anything before retirement age (and which you can pay your mortgage off with at some point if you so wish).

You will get very differing opinions on this from an economic/financial point of view. But I will offer a self employed, single person's view. The day I paid off my mortgage was so satisfying and an enormous relief. Knowing that, whatever shit life throws at you, you will always have a roof over your head takes an awful lot of stress away. I paid off my mortgage as fast as I could and then, once that was done, I now shove every spare penny into a pension. My pension isn't great but none of us know how long we will live. I would rather be happy and stress/mortgage free whilst I'm young(ish) and definitely still alive than paying off a mortgage forever, building a big pension then falling off my perch when I'm 70. (My thinking is possibly skewed by two close members of my family dying before pension age so never got the benefits of all that saving).

The sensible answer is probably both. Maybe if I had my time again, even if it was only £50 a month, I would probably have paid a tiny bit into my pension but not at the expense of getting rid of the mortgage.