Houses

[Leicester_Loyal]

Had a little wage rise at work last week so decided to up my mortgage overpayments, want to absolutely hammer it for the next 3 and a half years when my fixed term comes to an end, will then probably move house.

[Tommy G]

On 27/09/2022 at 17:57, Line-X said:

It's certainly a very nice feeling.

 

The money freed up I'm now ploughing into AVCs.

If you had ploughed more into AVC when younger, with the tax breaks and the pension growth at a median rate of 6-7% you would of outstripped by a long shot of what yiou have saved on interest paying your mortgage off early. Just food for though, everyone is different...

 

Draw backs of large pension conts. in your 50's as an example as the growth period is far less than your 30s. £200 extra a month in your 30's will be the same as £700 a month in your 50's.

Edited 3 October 2022 by Tommy G

[SpacedX]

4 minutes ago, Tommy G said:

If you had ploughed more into AVC when younger, with the tax breaks and the pension growth at a median rate of 6-7% you would of outstripped by a long shot of what yiou have saved on interest paying your mortgage off early. Just food for though, everyone is different...

 

Draw backs of large pension conts. in your 50's as an example as the growth period is far less than your 30s. £200 extra a month in your 30's will be the same as £700 a month in your 50's.

Absolutely, but it was a different world back then, I was a completely different person with totally different circumstances. You're assuming I even had a pension. 

 

You'll find very few people then or now prepared to put money into AVCs in their early thirties. 

[Tommy G]

Just now, Line-X said:

Absolutely, but it was a different world back then, I was a completely different person with totally different circumstances. You're assuming I even had a pension. 

 

You'll find very few people then or now prepared to put money into AVCs in their early thirties. 

Agreed - I think if it was a toss up between chucking £200 at my mortgage at 2.03% or into a pension I'd do the latter. As long as you have some decent equity in your property, if sh!t really did hit the fan you could sell up and cash in - I'd say the cases where that has happened in this country must be less than 0.1%. A mortgage free property is a nice to have and will either be used towards care fees or go to your kids. As long as its cleared at retirement to free up cash when you stop working - I suspect more and more people will have their mortgage well into their 60s

[FoyleFox]

3 minutes ago, Tommy G said:

Agreed - I think if it was a toss up between chucking £200 at my mortgage at 2.03% or into a pension I'd do the latter. As long as you have some decent equity in your property, if sh!t really did hit the fan you could sell up and cash in - I'd say the cases where that has happened in this country must be less than 0.1%. A mortgage free property is a nice to have and will either be used towards care fees or go to your kids. As long as its cleared at retirement to free up cash when you stop working - I suspect more and more people will have their mortgage well into their 60s

I'll be releasing the equity and booking some good holidays

[Leicester_Loyal]

1 hour ago, Tommy G said:

If you had ploughed more into AVC when younger, with the tax breaks and the pension growth at a median rate of 6-7% you would of outstripped by a long shot of what yiou have saved on interest paying your mortgage off early. Just food for though, everyone is different...

 

Draw backs of large pension conts. in your 50's as an example as the growth period is far less than your 30s. £200 extra a month in your 30's will be the same as £700 a month in your 50's.

Certainly is food for thought, thanks!

 

Will have to do some maths on it. I'm 28 years old and already stick in £25 a week in AVCs (for reference)

[Tommy G]

15 minutes ago, Leicester_Loyal said:

Certainly is food for thought, thanks!

 

Will have to do some maths on it. I'm 28 years old and already stick in £25 a week in AVCs (for reference)

So thats topped up by 20% assuming you are a basic rate tax payer, and 40% if you are higher rate - you can claims this via your tax return or just call the tax office. 

 

It is a british mentality that you must pay your mortgage off as soon as possible and its head down for 40 years, there are lots of different strategies or a mixture of both which mean you arent chained to your mortgage for your whole working life. 

[FoyleFox]

4 minutes ago, Tommy G said:

So thats topped up by 20% assuming you are a basic rate tax payer, and 40% if you are higher rate - you can claims this via your tax return or just call the tax office. 

 

It is a british mentality that you must pay your mortgage off as soon as possible and its head down for 40 years, there are lots of different strategies or a mixture of both which mean you arent chained to your mortgage for your whole working life. 

I wonder if it's awareness? Going back to when I was in my 20's (20+ odd years) none of my friends even had pensions. And back then, a company pension scheme only applied for certain types of employer. I had one and made AVC's but now wish I'd made more AVC's as I'm looking to take it at 55/60.  Given that the state pension age keeps increasing, it is more important than ever to sort out your own. I was also very keen to make extra mortgage payments, which has now been paid off, but all of those friends are still paying theirs. I couldn't get them to understand the importance of either, and they're largely not daft people. Although, I'm assuming supporting their hoards of off spring was an expensive business! Not having any kids has been a highly effective cost saving plan.

 

Perhaps it's a generational thing, we're late 40's and into 50's now, paying off the mortgage was always the big aim, but pension planning wasn't mainstream discussion. Perhaps people just assumed the state pension would be adequate then. Now, you need to plan well ahead, and it is discussed more as if you're 25 or 30 now your state pension could be at 75! And to get a mortgage now, it's probably not on the 25-year terms we did.

 

I'm rambling but appreciating my planning and being old. Plus, non of the ridiculous $hit from my youth is on social media

[Tommy G]

Just now, FoyleFox said:

I wonder if it's awareness? Going back to when I was in my 20's (20+ odd years) none of my friends even had pensions. And back then, a company pension scheme only applied for certain types of employer. I had one and made AVC's but now wish I'd made more AVC's as I'm looking to take it at 55/60.  Given that the state pension age keeps increasing, it is more important than ever to sort out your own. I was also very keen to make extra mortgage payments, which has now been paid off, but all of those friends are still paying theirs. I couldn't get them to understand the importance of either, and they're largely not daft people. Although, I'm assuming supporting their hoards of off spring was an expensive business! Not having any kids has been a highly effective cost saving plan.

 

Perhaps it's a generational thing, we're late 40's and into 50's now, paying off the mortgage was always the big aim, but pension planning wasn't mainstream discussion. Perhaps people just assumed the state pension would be adequate then. Now, you need to plan well ahead, and it is discussed more as if you're 25 or 30 now your state pension could be at 75! And to get a mortgage now, it's probably not on the 25-year terms we did.

 

I'm rambling but appreciating my planning and being old. Plus, non of the ridiculous $hit from my youth is on social media

I think those views explain why the average private pension pot is a pitiful £50K or something at the point of retirement, and why so many pensioners are in poverty - the state pension just isn't enough.I read over the weekend that up to a 1/3 of people are opting out of their workplace pension due to the cost of living crisis which just means we will have a pensions crisis in years to come. 

[rachhere]

57 minutes ago, Tommy G said:

I think those views explain why the average private pension pot is a pitiful £50K or something at the point of retirement, and why so many pensioners are in poverty - the state pension just isn't enough.I read over the weekend that up to a 1/3 of people are opting out of their workplace pension due to the cost of living crisis which just means we will have a pensions crisis in years to come. 

That is worrying. I am really fortunate to be attached to a really good workplace pension where I contribute something like 10% and my employer around 21%. Even then I still look at the projections and wonder whether it will be enough. I am still a bit mistrusting of pensions though and the potential of it massively dropping in value, but I am quite a risk adverse about things like that. 

[Tommy G]

13 minutes ago, rachhere said:

That is worrying. I am really fortunate to be attached to a really good workplace pension where I contribute something like 10% and my employer around 21%. Even then I still look at the projections and wonder whether it will be enough. I am still a bit mistrusting of pensions though and the potential of it massively dropping in value, but I am quite a risk adverse about things like that. 

Yeh that is very good contributions both sides - I think as your near retirement age you can de risk it, by moving away from a balanced fund into a less risky fund where the returns are much less - but at that point you arent worried about returns just focused on your overall pot. 

 

Presume you are public sector with those rates?

[rachhere]

5 minutes ago, Tommy G said:

Yeh that is very good contributions both sides - I think as your near retirement age you can de risk it, by moving away from a balanced fund into a less risky fund where the returns are much less - but at that point you arent worried about returns just focused on your overall pot. 

 

Presume you are public sector with those rates?

University, so yes, but not a civil service pension. This is why I think for me personally I would rather spread the risk more as I am already investing a lot in my pension, but I can see for many that don't have such a generous scheme that this is important. 

[Tommy G]

14 minutes ago, rachhere said:

University, so yes, but not a civil service pension. This is why I think for me personally I would rather spread the risk more as I am already investing a lot in my pension, but I can see for many that don't have such a generous scheme that this is important. 

I'd definitely agree with that 

[foxes1988]

Looking at setting up an avc.  Is it just as simple as asking your employer to sort it up or is there more too it. 

 

Currently overpaying on the mortgage but do want to continue that too, I suppose spreading it out feels like spreading the risks a little.

[Tommy G]

14 minutes ago, foxes1988 said:

Looking at setting up an avc.  Is it just as simple as asking your employer to sort it up or is there more too it. 

 

Currently overpaying on the mortgage but do want to continue that too, I suppose spreading it out feels like spreading the risks a little.

Ask your employer and they will take it from your salary and pay it across to the pension provider.

[The Blur]

20 hours ago, Tommy G said:

If you had ploughed more into AVC when younger, with the tax breaks and the pension growth at a median rate of 6-7% you would of outstripped by a long shot of what yiou have saved on interest paying your mortgage off early. Just food for though, everyone is different...

 

Draw backs of large pension conts. in your 50's as an example as the growth period is far less than your 30s. £200 extra a month in your 30's will be the same as £700 a month in your 50's.

 

Would I still get same benefit if I start paying into AVCs when I am in my mid/late thirties?  I cannot afford to at the present due to nursey costs which I can foresee being an issue for next few years as my family potentially grow.

[Tommy G]

3 hours ago, The Blur said:

 

Would I still get same benefit if I start paying into AVCs when I am in my mid/late thirties?  I cannot afford to at the present due to nursey costs which I can foresee being an issue for next few years as my family potentially grow.

Mid to late 30s fine, even 40s, the earlier the better. Set up a simple spreadsheet to work it out, if you put a one off £100 in today at 35 and you want to retire at 60 and assumed growth rate is 6% it would quadruple by the time you retire. Just dont put all your eggs in that basket incase you don't make retirement! Enjoy life and spread some of your income around in different areas to make your life easier as your become older.

[Raj]

@Tommy G just asking, are you a financial  advisor?

[Tommy G]

2 minutes ago, Raj said:

@Tommy G just asking, are you a financial  advisor?

Nope, CFO

[FoyleFox]

I know we've veered slightly off-topic here, but I came across this today, which could be useful for those wanting to see how pension saving will work out.

 

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/pension-calculator

[adam1]

Don't know if this is the right thread but....

 

I am looking at having a window put in on our landing (existing brick wall, window cut out/lintel etc new and a window put in). Reason is simple, there is no natural light on the landing and it is dark.

 

Will this be a simple process and has anyone done similar?

 

Also, any reccomendations of firms who can do this?

 

 

[rachhere]

2 hours ago, adam1 said:

Don't know if this is the right thread but....

 

I am looking at having a window put in on our landing (existing brick wall, window cut out/lintel etc new and a window put in). Reason is simple, there is no natural light on the landing and it is dark.

 

Will this be a simple process and has anyone done similar?

 

Also, any reccomendations of firms who can do this?

 

 

As there isn't a window already and it seems to make good sense to have one, I wonder if there might have originally been issues to do with privacy of your neighbours? I remember a friend of mine looking to get a window put in and they had to compromise and have frosted glass (but this was in a conservation area, so planning permission is tighter). 

[Greg2607]

On 04/10/2022 at 12:46, Tommy G said:

Nope, CFO

everything he is saying is bang on though.  I recruit for Financial Advisers for a wealth management firm, and everything Tom says is the stuff that they tell me. 

 

Honestly, speaking to a financial adviser is worth it's weight in gold at any stage of life. 

 

Having known @Tommy G through my previous work, he is a very straight up guy as well, so you can take comfort in knowing that it's all very genuine. 

[adam1]

43 minutes ago, rachhere said:

As there isn't a window already and it seems to make good sense to have one, I wonder if there might have originally been issues to do with privacy of your neighbours? I remember a friend of mine looking to get a window put in and they had to compromise and have frosted glass (but this was in a conservation area, so planning permission is tighter). 

Shouldnt be an issue as it wouldn't overlook more then what the adjacent bedroom does. 

 

I was expecting to put in opaque/frosted glass anyway (the neighbours have an equivalent).

[Wolfox]

17 hours ago, adam1 said:

Shouldnt be an issue as it wouldn't overlook more then what the adjacent bedroom does. 

 

I was expecting to put in opaque/frosted glass anyway (the neighbours have an equivalent).

Any builder could do that…