SWT Wealth Management
Advertising feature: When you pay off your mortgage, you have money that’s freed up by no longer having mortgage payments. Rather than see this money dissolve into the household budget or day-to-day spending, consider how powerful it could be if you invested it. Completing the repayments on your mortgage is a major personal achievement. You may have spent 25 years or more setting aside income, considering interest rates and calculating mortgage deals. It’s a life changing event. Not only will you own outright what is probably your biggest asset, you also will have access to a sizeable sum each month that previously was earmarked for your mortgage lender. While it might be tempting to use this new found cash on a holiday, a car, or a home extension, it’s a golden opportunity to talk to an adviser to review your current budget, savings and retirement plans to see if you’re using it in the most effective way.
Plan for your retirement
As with all financial planning, it’s never too early to start thinking about how to balance paying off your mortgage with saving for retirement. If, for example, you pay off your mortgage at 57 and work until you’re 66, you will have nine years of monthly savings to contribute towards your retirement. If that retirement goal is the one to which we all aspire, those additional funds may be vital. If you are a 50-year-old man of average health today, the Office for National Statistics life expectancy calculator suggests you will live until the age of 84;1 if you’re a 50-year-old woman with the same reasonable health, you are forecast to live until 871. Thus, meaning there are many years after retirement that will need to be funded.
If you save £500 per month after your mortgage has finished, this will add up to £60,000 over 10 years – possibly significantly more depending on how it is invested and allowing for tax relief on your contributions.
The importance of advice
Even if you wait until your mortgage is nearing its full term before considering future options, it’s sensible to have a financial adviser in your corner. We can help you navigate through the different choices if you’re not sure where to start and help your money to work as hard as it can.
Not only will we check up on your short-and long-term savings and spending needs, and the current state of your pensions, ISAs, Investments, and other assets, but we can also look at the most tax-efficient use of the extra money to achieve your retirement goals. For example, increasing your pension contributions or making better use of ISA allowances.
We can help you plan for the retirement you want. Contact us now for advice and support.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
Source: 1 Office for National Statistics www.ons.gov.uk June 2023
SWT Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
To find out ways we can help visit: www.swtwealth.co.uk or contact us on 029 2252 0168 or 07946183512
SJP Approved 02/05/2023