This is an absolutely clear case of maxing your pension contributions now.
Forget about the mortgage. Forget about college funds. Absolute priority is to max your pension
1) You have a very comfortable mortgage
€180k mortgage with a salary of €130k is a loan to income of 1.4
€180k mortgage on a €400k house is less than 50% LTV.
Your net borrowing is even more comfortable as you will be able to set the stock of €80k against it in 4 years
2) You have just started your pension so you are way behind. Catch up as quickly as possible.
3) You have a variable income. In future years if your income falls, you won't be able to contribute as much
The only potential exception to this is if you plan to trade up within the next 5 years. But even then, with €220k of equity and a good income, I am sure that maxing your pension is the right idea.
After maxing your pension contributions, you should pay down your mortgage
You should not be contributing to a children's education fund. You can get a guaranteed return of 3% tax-free by paying down your mortgage. That is what you should do.
Do you really need rainy day money. It is costing you 3% of €20,000 or €600 a year. If your employment outlook changes or if you anticipate some expenditure like a new car, then by all means start saving for it.
If your earnings might fall if your sales fall, then it might be worth building up a rainy day fund.
It’s worth considering saving for college fees through pension
Max your pension now. Don't worry about how you will fund the kids' education fees. If you have a healthy pension fund and you have cleared your mortgage early, you can then plan on how to fund the education fees.
Brendan