Moneymakeover Pension Scheme Advice

M

moore82

Registered User
Messages
25
Age:

41

Spouse’s/Partner's age:

41

Annual gross income from employment or profession:

79k

Annual gross income of spouse:

45k

Monthly take-home pay:

4300

Type of employment:

Private sector

In general are you:
(a) spending more than you earn, or
(b) saving?

Saving.

Rough estimate of value of home:

Renting.

Amount outstanding on your mortgage:

n/a

What interest rate are you paying?

n/a

Other borrowings – car loans/personal loans etc:

None.

Do you pay off your full credit card balance each month?

Yes.

If not, what is the balance on your credit card?

n/a

Savings and investments:

120k Prize Bonds
43k Investments (amount I've invested, not the value of my portfolio)

Do you have a pension scheme?

Yes. Company contribute 10% and I have put in variable amounts throughout the years. Currently contribute 5%. Value of the pension is 100k.

Do you own any investment or other property?

No.

Ages of children:

None.

Life insurance:

None.

What specific question do you have or what issues are of concern to you?

We're looking to buy in the near future so putting away as much as we can to build up a decent deposit. Hence why I've got a large chunk of my savings in prize bonds. I had a look back over the past eight years (when I started taking this more seriously and tracking everything) and I've managed to save 50% of my take home pay since then.

In terms of the pension scheme, as I've passed the 40 year mark the scheme has automatically moved me into a less risky fund (Zurich Dynamic Fund (91% equities, 7% bonds, 2% cash) to the Performance Fund (81% equities, 18% bonds, 1% cash). Guess this is all down to risk appetite but does it make sense the stay in the Dynamic Fund for another couple of years?

Thanks.
 
Congrats on saving so much money living within your means. Yes it's wise to own your own home. Personally I would try not to overspend on a home. Leave yourself a very manageable mortgage so you still have cash flow for other things. With your company contributing 10% you could be shovelling 35% of gross salary into your pension and getting 40% tax relief on your own (25%) contributions. This is where you can really build wealth until your retirement. Of course you should have a rainy day fund as well. Probably most others on AAM would recommend being 100% in equities at your age.
 
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Yes I would definitely stay in the dynamic fund until 55 at least. Thats assuming you want to retire at 65. I would reassess at 55 but I wouldn't give it a second thought until then.
 
moore82 said:
Do you have a pension scheme?

Yes. Company contribute 10% and I have put in variable amounts throughout the years. Currently contribute 5%. Value of the pension is 100k.
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Since you're saving to buy a house you should probably only put the minimum amount into your pension that is required to secure the maximum employer contribution. If you don't need to contribute anything to get the employer 10% then it might make sense to do that (contribute nothing) and prioritise saving for the house.

This key post is worth reviewing:

Key Post - Overpay mortgage or contribute to pension or do something else?

This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...
www.askaboutmoney.com
moore82 said:
In terms of the pension scheme, as I've passed the 40 year mark the scheme has automatically moved me into a less risky fund (Zurich Dynamic Fund (91% equities, 7% bonds, 2% cash) to the Performance Fund (81% equities, 18% bonds, 1% cash). Guess this is all down to risk appetite but does it make sense the stay in the Dynamic Fund for another couple of years?
Click to expand...
Personally I would be 100% in equities at your age. In fact I still am (MSCI World Equity Index tracker for most and similar index funds for the balance) touching 60 and easing into an early retirement. And I have no plans to change the asset mix as I start splitting some of the pension off info smaller PRSAs and then taking the pro-rata tax free lump sum and a modest annual income.
 
moore82 said:
Hence why I've got a large chunk of my savings in prize bonds. I
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You might be better off with the money on deposit.

What percentage interest rate is paid in prizes on Prize Bonds

Here is their press statement for the Annual Report but it does not mention the percentage - I can work it out,but is there an official figure? Sales of Prize Bonds at €350m as fund totals €4.46bn 26th of June 2025. The Prize Bond Company DAC, which administers Prize Bonds on behalf of...
www.askaboutmoney.com

Best Buy - Savings Best Buys

Savings Best Buys: There are 3 savings best buy threads on AskAboutMoney that are updated frequently. Instant Access and Notice Accounts - Lump sum variable rate savings. Fixed Term Deposits - Fixed Lump Sum Term Deposits from a few months to a few years. Regular Savings - Smaller sum...
www.askaboutmoney.com
 
Fair point on the prize bonds. Started investing in them approx 4 years ago and have a return of 2.8k, works out at around 0.60% per year.
 
What’s your target price for your desired home? Having 163k savings/investments suggests you’re ready to go. Why have you not pulled the trigger already, just waiting for the ideal property or some other reason?

I ask because while I agree with the advice from @ClubMan generally, I wouldn’t over-save for a deposit either. I’d personally prefer to pay 3% interest on an extra 30-40k of mortgage debt and then max out AVC’s for this year and last, assuming your 163k represents about 20-30% of your purchase price.
 
Target price is between 500k-600k. Bear in mind my partner has approx 100k in savings also. As to why we haven't pulled the trigger yet, not necessarily waiting for the ideal property...it's more that what's out there currently from what we're seeing is hard to justify parting with such a large sum of money. We also have a reasonable rent (1800) in a good location which is playing into things also.
 
With a deposit of 260k and an income of 125k I would really focus on finding a property that suits. Might not be perfect, might not look as the best value but long term it would probably be a good decision. I am a Celtic tiger buyer, bought in 2006. At some point, our house was valued 40 per cent less than we paid for. Don't get me wrong, I would have loved buying it for that price. The reality is we needed accommodation in 2006. At that point, it was affordable for us and we still have a roof now paid for. The fact that you are saving for a house and that this is your current financial goal means that you are limiting your opportunity to save through your pension and you are paying 21k in rent that could be used to start paying for an asset.
 
moore82 said:
We also have a reasonable rent (1800) in a good location which is playing into things also.
Click to expand...
moore82 said:
Target price is between 500k-600k.
Click to expand...
moore82 said:
120k Prize Bonds
43k Investments (amount I've invested, not the value of my portfolio)
Click to expand...
moore82 said:
Bear in mind my partner has approx 100k in savings also.
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The mortgage repayments on c. €350K over 25 or even 20 years at current rates will be well below what you are paying in rent right now. Probably c. €1-1.2K.
 
Asking prices up 7% YoY according to MyHome.ie report today, that’s a ferocious inflation rate to be eating away at your 0.6% on prize bonds.

Your inaction here is costing you serious money - find a place, keep some money aside for renovations if you have to, but get off the fence and either get moving on buying your home or get that money working harder for you elsewhere if you’re going to continue with this wait-and-see approach.
 
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