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  • FIRST POST
    • Alan_Brown
    • By Alan_Brown 12th Mar 17, 4:59 PM
    • 169Posts
    • 226Thanks
    Alan_Brown
    Six Years To Freedom
    • #1
    • 12th Mar 17, 4:59 PM
    Six Years To Freedom 12th Mar 17 at 4:59 PM
    This is my freedom blog.

    A few years ago I was in a safe and relatively stress free job and had a low mortgage on a small home. I decided to take advantage of low cost mortgages and buy a larger home. Fast forward a few years and I'm in a better paid but massively stressful job that I can literally feel killing me. I can't leave the job because I need the large salary to pay my mortgage and I can't sell the house because we would lose everything (long story). I feel trapped under the crushing weight of a house that I used to love and which I am now beginning to hate.

    I want to dig myself free, so step 1 is to pay off a home improvement loan that I took out to try and get the house a little bit warmer (it's a freezing cold pile of stone). The house soaked up that money (and much more besides) like a sponge with very little positive results. We are just as cold, and now a little more in debt. The outstanding balance of the loan is £20,000, while the mortgage on the house is £209k.

    I want to leave my job and do something more interesting and less stressful, however as this will entail a large pay cut, I first need to reduce my outgoings which are large not only due to the mortgage but also the massive utility bills for this cold storage locker we call home.

    I hit 55 in 6 years time and I want to get rid of my loan and have my mortgage down to £150k by then so that I can get a different job and hopefully live long enough to actually retire at some point.

    I got myself into this mess and I'm going to get myself out of it. Every long and difficult journey starts with a single step, so this is mine.
    Last edited by Alan_Brown; 12-03-2017 at 7:07 PM.
Page 1
    • squirrelgirl
    • By squirrelgirl 12th Mar 17, 5:12 PM
    • 77 Posts
    • 251 Thanks
    squirrelgirl
    • #2
    • 12th Mar 17, 5:12 PM
    • #2
    • 12th Mar 17, 5:12 PM
    Good luck!!

    I'll cheer you on - I've had a number of job changes over the years and have jumped off the cliff at times to save my sanity so I know where you're coming from!

    You'll get lots of support and some good advice here... plus its a great place to vent when you need to!
    CC £0/£2000; OD £2000/£2000; Relative Debt £0/£6000; Car fund £3500/£8000; Sofa Fund £0/2000; GC £322.34/£3600 MFW £50/£22968.96
    • katep23
    • By katep23 12th Mar 17, 6:16 PM
    • 1,142 Posts
    • 8,729 Thanks
    katep23
    • #3
    • 12th Mar 17, 6:16 PM
    • #3
    • 12th Mar 17, 6:16 PM
    What a tough situation, will be cheering you on!

    • Jessy103
    • By Jessy103 12th Mar 17, 6:46 PM
    • 166 Posts
    • 559 Thanks
    Jessy103
    • #4
    • 12th Mar 17, 6:46 PM
    • #4
    • 12th Mar 17, 6:46 PM
    Good luck with your journey and I have subscribed so I can cheer you on!
    Original Mortgage Amount 2007 - £87,310.50
    Mortgage Amount December 2016 - £69,000
    Overpayment Target for 2017 - £5,000 /£1,327.71
    Jan - £873.26 Feb - £185.38 March - £269.07
    • Alan_Brown
    • By Alan_Brown 12th Mar 17, 7:02 PM
    • 169 Posts
    • 226 Thanks
    Alan_Brown
    • #5
    • 12th Mar 17, 7:02 PM
    • #5
    • 12th Mar 17, 7:02 PM
    Thanks guys, it feels good to have people rooting for you when you're on a difficult journey.

    I have done some rough calculations and I think our standard mortgage payments reduce the loan by £750 a month, so in 6 years it would be down by £54k to £156k anyway. This is the first time I've actually calculated how much I pay off the mortgage each month and I'm very pleasantly surprised.

    The loan reduces by a measly £60 a month (its connected to the mortgage and so has a long term). I know I can repay much more than that each month, so that's cheered me up too.

    I have reduced my work pension contributions, flex benefits and I've sold some of my annual leave (which I never find time to take anyway), so that will increase my take home pay by an extra £300 per month. All of that and hopefully more besides will go onto the loan. I'm allowed unlimited overpayments, so I can just drop as much as I like onto it.
    Last edited by Alan_Brown; 12-03-2017 at 7:08 PM.
    • EatingTheElephant
    • By EatingTheElephant 13th Mar 17, 6:30 AM
    • 762 Posts
    • 3,731 Thanks
    EatingTheElephant
    • #6
    • 13th Mar 17, 6:30 AM
    • #6
    • 13th Mar 17, 6:30 AM
    Good luck on your journey. I will be cheering you on as well.
    • DesignNotDefault
    • By DesignNotDefault 13th Mar 17, 2:45 PM
    • 34 Posts
    • 62 Thanks
    DesignNotDefault
    • #7
    • 13th Mar 17, 2:45 PM
    • #7
    • 13th Mar 17, 2:45 PM
    Welcome and good for you on starting your freedom journey

    I can really relate as I'm in a similar situation to you myself; my job can be really stressful and the shifts gruelling. It's not as bad as my previous role, but it's starting to take a toll on me physically and mentally now.

    I want to be mortgage free in a similar time frame to yourself, however work needs doing to the house, and I also need the income to meet current outgoings. The house seems like a never ending money pit, but it's my forever home and I have to remind myself of why I bought it.

    Have you had all possible insulation put into your house to try to counteract heat loss? Just out of curiosity, what work did you have done to the house? Forgive the assumption, but it sounds like you're living in a stone cottage in the middle of nowhere!
    Mortgage @ May 2014 £103,347.24. Mortgage @ 2%, O/P @ £250 p/m from March '17: £93,316.68, £92,949.95, £92,314.97
    CC @ 0%: £5473.72, £5419.72, £5365.72
    Home Improvement Loan @ 0%: £602.68, £559.62, £516.56
    Intending to be mortgage-free by 2022
    • freshcotton
    • By freshcotton 13th Mar 17, 9:10 PM
    • 181 Posts
    • 470 Thanks
    freshcotton
    • #8
    • 13th Mar 17, 9:10 PM
    • #8
    • 13th Mar 17, 9:10 PM
    Good plan. Taking control of my work life has always been the main motivation for paying my mortgage off.

    I never want to stop working, but would also like something less stressful and certainly not full time.

    Ps stone houses look beautiful (I'm trying to be positive)
    Mortgage Start - August 2013 £145,000 ************ Balance at December 2016 - £73,000
    Target - Overpay by £2,500 each month ************** Mortgage free by December 2018!
    • dave23
    • By dave23 13th Mar 17, 10:12 PM
    • 42 Posts
    • 11 Thanks
    dave23
    • #9
    • 13th Mar 17, 10:12 PM
    • #9
    • 13th Mar 17, 10:12 PM
    I would not have reduced pension contributions, instead you should consider increasing them again and then when you are 55 you could take the 25% tax free to reduce your loan. This makes even more sense if you are a higher rate tax payer.
    • Jo Blogs
    • By Jo Blogs 13th Mar 17, 11:32 PM
    • 324 Posts
    • 767 Thanks
    Jo Blogs
    Sounds as though you have a plan Alan

    The one area I'm dubious about is.........

    Thanks guys, ........I have reduced my work pension contributions, ...........
    Originally posted by Alan_Brown
    I find myself in agreement with dave23

    Wishing you well with you mortgage free journey
    Saved Nitty Gritty £2333.72 [46.67%]/£5,000-[Apr] £488.81 for the 'Save 12k in 2017' #157
    2017 Wom #35 £1956.34 March NSDs 18/15
    • confused_kid
    • By confused_kid 14th Mar 17, 1:42 PM
    • 47 Posts
    • 34 Thanks
    confused_kid
    all the best Alan, hope the plan works and good luck with doing something more enjoyable/less stressful when you are able!


    Also, no expert, but regarding pensions may be worth speaking to some pension/financial advisor to see what is best for your situation.
    • Alan_Brown
    • By Alan_Brown 17th Mar 17, 10:13 PM
    • 169 Posts
    • 226 Thanks
    Alan_Brown
    Thanks for the comments. I'm still contributing to a pension, just not making the additional voluntary contributions.
    • Happier Me
    • By Happier Me 18th Mar 17, 7:29 AM
    • 350 Posts
    • 752 Thanks
    Happier Me
    I can relate to your situation at work Alan. I am in my fifth job for three different employers in six years now, the aim of moving being to find a job I enjoy with less stress. But I use a formula for job searching (I need a certain amount of pay, flexibility, holidays etc) and its the formula that needs to change, because I have no option but to take on the stress to achieve my formula. On paper I have a fantastic job that pays wells and gives me lots flexibility, in reality I feel like I am trying to deliver the completely impossible most days both at work and at home.

    So our aim is to become MF and DF too and we are hoping to get there by November 2019, at which point I can change my formula.

    I would say, don't lose sight of the bigger picture though. Our ultimate aim is to retire early. I am in a good pension scheme but my husbands could do with a boost and I am very conscious that we are choosing to throw money at our mortgage and debts in the short term over saving extra for retirement. This will no doubt cost us in the long run. I have decided that my health comes first, though, because you have to actually make it to retirement age to reap the benefits.
    • Alan_Brown
    • By Alan_Brown 18th Mar 17, 7:55 AM
    • 169 Posts
    • 226 Thanks
    Alan_Brown
    I can relate to your situation at work Alan. I am in my fifth job for three different employers in six years now, the aim of moving being to find a job I enjoy with less stress. But I use a formula for job searching (I need a certain amount of pay, flexibility, holidays etc) and its the formula that needs to change, because I have no option but to take on the stress to achieve my formula. On paper I have a fantastic job that pays wells and gives me lots flexibility, in reality I feel like I am trying to deliver the completely impossible most days both at work and at home.

    So our aim is to become MF and DF too and we are hoping to get there by November 2019, at which point I can change my formula.

    I would say, don't lose sight of the bigger picture though. Our ultimate aim is to retire early. I am in a good pension scheme but my husbands could do with a boost and I am very conscious that we are choosing to throw money at our mortgage and debts in the short term over saving extra for retirement. This will no doubt cost us in the long run. I have decided that my health comes first, though, because you have to actually make it to retirement age to reap the benefits.
    Originally posted by Happier Me
    Your comments really resonated with me. In order to afford to pay for our house, I have to work in a more supervisory/managerial role which really is not suited to my personality or capabilities. The strain of constantly working outside of my comfort zone is really impacting my physical and mental health and could end up shortening my life. Diverting AVC money to mortgage overpayments may not be tax efficient, but it will make me feel more secure and help alleviate my current feelings of being trapped with no avenues for escape.

    P.s. I'm still contributing 10% of my income to a pension.
    • Alan_Brown
    • By Alan_Brown 19th Mar 17, 3:49 PM
    • 169 Posts
    • 226 Thanks
    Alan_Brown
    I had a ponder over the weekend about the points some people raised about increasing my pension contributions so that they pay off the mortgage when I turn 55. It's appealing because as a higher rate taxpayer, I get 40% tax relief on my pension contributions.

    This means that if I went interest only on my mortgage and paid £750 a month into a pension plan, the tax relief would add £300 per month, taking it up to £1050. If I also added in extra money, say £300 per month the tax relief would be £120, taking that to £420. Over 6 years, that would be £1470 x 12 x 8 =£141,000. I could take out 25% tax free when I reach 55, which would be a £35k mortgage payment.

    Alternatively, I could keep things as they are, with my £750 mortgage repayments and £300 per month overpayments = £1050 per month. Over 6 years, that would be £1050 x 12 x 6 =£75,600.

    Unless my figures are wrong, I don't see how increasing my pension contributions will help me reduce my mortgage enough to enable me to change to a less stressful job? Unless I also start taking an income from the crystalised pension, though this would be taxed at 40%, eliminating much of the tax relief?

    To pay off the same amount over the 6 years with a pension, I'd have to accumulate a £302k pension (i.e. 25% of 302 = £75.6k), which would require a monthly pension payment of £2513 per month. I can't imagine the pressure of work, coupled with trying to sustain that much investment over 6 years of hating my job?
    Last edited by Alan_Brown; 19-03-2017 at 3:57 PM.
    • Freddykrueger69
    • By Freddykrueger69 19th Mar 17, 4:24 PM
    • 8 Posts
    • 10 Thanks
    Freddykrueger69
    Hi Alan

    Most of the things you mention resonate with me. I was channelled down the management route and all it seems to do is cause me stress. I also have a good work pension scheme but can't comment on pensions as it's not my forte. Suffice to say I pay in 8% total and get 12% from the employer making a total of 20%. I have some money tied up in a SIPP which I believe was not the right product for me and intend to try and close this and move to the work pension.

    My aim is to get me to mortgage neutral where my offset balance equals the mortgage outstanding. I will be cheering you along the way as I'm in a similar situation to you.
    • Alan_Brown
    • By Alan_Brown 19th Mar 17, 5:06 PM
    • 169 Posts
    • 226 Thanks
    Alan_Brown
    Thanks Freddy, it's nice to know that others are sharing the same journey
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