Mortgage, Isa or pension fund?

Q I am 29 years old and own two and a half flats. My parents own the other half! However, ever increasing debt (due to a reasonably low salary and flat expenses) has meant I have had to sell one flat. This has been a godsend, as now I have cleared off my debts, put ?20,000 into one of the other mortgages and now have a total of ?10,000 left.

I know I should invest this wisely. Should I put the rest of the money into my mortgage, or should I get a mini cash individual savings avvount (Isa), or should I just add it to the pension fund (?100 a month) that I have just started as I don't get a pension from work? What is the best option? Sorry for the multitude of questions!

FW

A The best investment is likely to be the pension fund, although you probably couldn't just add ?l0,000 in one lump if your salary is low. The tax relief on pensions means that you start with a 22% gain. Even though that may be eroded by charges, it should provide the highest return over the longer term. However it does mean locking money away until you are 50 at the earliest.

Alternatively you could put ?7,000 into a maxi Isa, with about the same kind of investment risk as a pension fund, and the benefit of tax-free withdrawals whenever you like.

Bearing in mind your "ever increasing" debts, which suggest you are living beyond your means at present, I would put the remaining ?3,000 in a high interest deposit account. Together with the Isa, this would provide a safety cushion against getting into debt again.