Pension savers can add up to £52,000 to their retirement pot by completing their mortgage repayments as early as possible, Standard Life has found.

Many homeowners are seeking longer mortgage terms in an attempt to boost monthly budgets as interest rates continue to rise.

However, following analysis by the retirement savings firm, Standard Life has said that paying off mortgages as early as possible will not only mean that housing costs will not need to be factored in when planning retirement, but money that can go towards a mortgage can instead be used to increase pension contributions.

Furthermore, the firm has said that increasing pension savings towards the end of your career also has the potential to significantly boost the value of your eventual pot, as your salary is likely to be higher and you have the biggest chance of benefitting from potential compound investment growth.

The analysis by Standard Life has found that those who begin working on a salary of £25,000 per year and pay the standard monthly auto-enrolment contributions (5% employee, 3% employer) from the age of 22, could build up a total retirement fund of £461,000 by the age of 66, not taking inflation into account.

However, topping up contributions by 4% for ten years from the age of 55, the age at which a 25-year mortgage term taken out at the age of the 30 would be paid off, could result in a total pot of £513,000 – £52,000 more than if no tops up were made.

Managing director for retail direct at Standard Life, Dean Butler, said: “Interest rates have rocketed since the middle of last year and so it’s understandable that people are looking for longer mortgage terms to ease the monthly strain. It won’t be possible, or even sensible, for everyone to stick to a shorter mortgage term, however it’s worth considering the potential retirement impact of any decision. There are obvious benefits to being mortgage free in retirement itself, but additionally having the option to swap mortgage payments for pension contributions in those valuable years leading up to retirement can have a significantly positive impact on your pot, and as a result on your standard of living in retirement.

“Having a think about what you’d like when you do retire is an important first step to inform your financial planning and helps to visualise decisions like these. The retirement living standards tool from the Pensions and Lifetime Savings Association can help, which shows what life in retirement looks like at three different levels - minimum, moderate and comfortable. As well as everyday costs, the tool factors in what’s needed for extras- gifts, holidays and large purchases etc., as well as the one-off expenses that come up through life.”

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