Assets or savings

[singularsausage]

I'm driving myself mad about this. We have a nice house with a big but affordable mortgage. We have enough space which is important because we both work from home. We also have a good quality of life - holidays and nice food. We have no debt.

But we don't save anything much.

If we downsized and had no mortgage we could seriously save and we want to have decent savings to support our DD into her adult life.

We are coming up to 50, one primary aged school child, good incomes and good pensions.

Should we (a) focus on paying off mortgage (b) downsize and put what we would have been paying into mortgage into savings and investments (c) a bit of both (d) pay off as much as possible of mortgage and then downsize when we or DD actually need money.

Pay off mortgage and look at that as your investment as you’ll make more on that than savings at the current rate. Downsize when you’re ready.

How long is left on your mortgage? Personally at approaching 50 with a primary age child id be saving hard and fast, do you have savings from before you had her?

Exactly this … your home will be your investment.
Overpay as much as you can and clear it .

If your DD is still only primary age, why on earth would you downsize now in preparation for helping her in 10 years in the future, or more? It sounds like you value and need the space in your current home and the cost of moving is considerable.

Focus on paying off the mortgage as soon as possible, enjoy your home, and then make the decision about downsizing when she is a young adult if you still want to release some equity in order to help her.

How is your pension? I am late 40's and we paid off our mortgage in our early 40's so we can focus on building saving and pension. Like you, we also only have one primary school aged children. But we have regularly saved for her since she was born. Having said that, our house is just OK, nothing to be bragged about. We do have holidays and eat out now and then, but I put a budget in mind for those.

If your pension is sorted, then you could focus on saving for your child and overpay the mortgage so it is paid off earlier by reducing the budget for holiday and nice food.

Depends on so many things, but why put yourself through the upheaval of moving if you don't need to?

Unless your income is unstable and you'd be fucked if you lost your job, or you've not much in the way of pensions and the mortgage won't be paid off by the time you want to retire, I don't see the need to change things.

If it really bothers you, you could probably save more by making a few tweaks - spending slightly less on holidays or food/eating out, or cutting other spending on things like mobiles, broadband, subscriptions, beauty/grooming, cars or whatever your less frugal than you could be might be a way to save a bit more before you press the nuclear button of downsizing now.

When will the mortgage be paid off if you let it run it's course? It's going to be 10-15 years or more before DD starts needing money for university/house deposit so if you've paid the mortgage off by then and/or your income has increased then you'll be able to help her out of income if not savings.

Ah lots of wise advice. Thank you.

Pensions are very good - defined benefits and looking healthy.

Mortgage has about 15 years to go.

I think if I'm honest with myself I don't want to compromise on our lifestyle. We work hard and try and put a lot into family life. I think the pleasures of holidays / eating out etc stop life feeling like a grind.

However there's always ways to cut back on costs so - will try and build up savings / pay down mortgage that way.

We're in a similar position to you. Large house, large but affordable mortgage, enough equity to buy another property outright and be mortgage free. Our pensions are decent. Not much in the way of savings.

We see our house as part of our pension plans/savings. Once the kids are settled in careers we plan to downsize.

We've just finished all the major house renovations we wanted so the money we would have spent on that we plan to split between paying off the mortgage earlier and savings.

We can only overpay 10% on the mortgage so that limits that and we will put a similar amount into savings.

Saving we are always advised to spread money about -don’t have all eggs in one basket - the housing market isn’t a 100% guarantee, so some in pension some in savings/ shares/ ISAs etc

You need some cash savings for things like having to go private for medical treatment, or living expenses for a few months if one if you looses their job or becomes too ill to work but not ill enough to claim your occupational pension (which would likely be less than current salary anyway). If you have that in place, carry on enjoying your lifestyle. If not, I guess it depends on your tolerance for risk. Some folks want security and are happy to live a simple life to save more and others can't bear the thought of "wasting" opportunities to live the good life by saving for a rainy day. Getting the balance right is a very personal decision.

You know if you want to save you can do that thing where when you spend it rounds it up to the nearest £. It soon adds up. You could leave that running in the background.
Enjoy life, sounds like you have everything just right. If things change, you can too. Nothing is ever set in stone.
I personally don’t like pensions. You are paying for the privilege of having money and have no means to do what you want with it when you want. But everyone is different.

Huh? Pensions are a great tax efficient way of saving for retirement.