Starting pension at 38

[Brookville]

Hi All,

Hoping to get some advice on myself and my wife's pension situation, just coming out the far side of the recession where we both lost our jobs due to the industries we were in.

I am changing jobs next month and my new employer will contribute 10% of my salary to my pension. Currently I have no pension.

Mortgage: LTV 81% 24 yrs remaining

No savings.

I am 38 with a salary of 55k.

My wife is 40 with a salary of 40k. She has a 12k sum that was put into a retirement bond 5yrs ago from a previous employer scheme.

Basically we both want to start contributing to pensions. Should we max contributions or focus on mortgage or do both?

Would appreciate any advice or tips.

 

[Sarenco]

A few quick questions:-

1. What is your mortgage rate and could you move to a lower rate if you brought the LTV below 80%?
2. Do you have to make any contribution to get the 10% employer match and, if so, how much?
3. Does your wife's employer provide a matching pension contribution and, if so, how much? Would she have to make a contribution to get this match?
4. When you say you have no savings do you mean you are currently just living pay cheque to pay cheque? Is there a danger you could slip into expensive personal debt if anything unexpected cropped up?

 

[Brookville]

Just moved from 4.5 to 4.2 with PTSB plan to pay a lump sum of 2k to get under 80% this month also talking to EBS about switching.

I don't need to make any contribution employer will pay 10% regardless.

Wife's employer does not provide a pension scheme.

Pretty much were living from pay cheque to pay cheque but have started saving 250 pm in last few months

 

[Sarenco]

Thanks.

If I was in your shoes, I would prioritise getting your mortgage rate down to something more reasonable. At less than 80% LTV you should hopefully be able to get down to 3.5% with EBS (with 2% cashback) or 3.1% with KBC (with €3k cashback).

After that I think you should try and build up a cash reserve equal to around six months of your typical household expenses.

Once those immediate priorities are sorted, I would prioritise making AVC pension contributions (to the extent that you get tax relief at the higher rate) ahead of paying down your mortgage ahead of schedule. Your wife might consider starting a PRSA at that stage.