Advice requested for income

EdInvestor

Of course this is all very familiar to me too, the FTB's lot is always like this.

But the difference in those days was that it made a lot of sense to borrow as much as possible, because the debt got inflated away quite quickly and big pay rises made it much easier to cope with.

That doesn't happen now with low interest rates and low inflation.The burden lasts for years ( hence the "pay off mortgage early" movement)

I think we also need to remember that young people are also now forced to pay for their university education ( and far more of them now go to uni).So they are already seriously in debt before they even start working.

Many people in their 20s and 30s will have to choose between starting a pension or saving up for a deposit and then buying a home.They won't be able to afford both (particularly if they plan to start a family.)

My view is that those who have to choose should go for the pay off debt/accumulate savings/buy house route, but at the same time pay close attention to their NI record for the state pensions ( pay up any missing years, get an annual forecast to check on the S2P).

Then look to top up the pension and/or other retirement savings and investments later when salary would be higher and the much better pension deal given to HRTs might be obtainable.If there's any spare money try to use the full annual ISA allowances.

Two main reasons for preferring the house and ISA savings/investment route first:

-you can't live in a pension

and (back on topic),

- if it all goes pear-shaped at the last minute (as it has done recently for many, let's not forget) at least the house can probably provide you with a top-up income as well, via equity release without you needing to move.

I would also suggest that anyone who has access to a good company pension makes an effort to pay into it, even if only a small amount.

It's just my view - others will differ.Trouble is there's not much room for error these days......

ReportInvestor

EdInvestor wrote:

I think we also need to remember that young people are also now forced to pay for their university education ( and far more of them now go to uni).So they are already seriously in debt before they even start working

And today's 18 year olds are having an extra £6K added to that debt in future if they do a 3 year course at uni.

Student debt is set to get much bigger in five years time and will impact on age of first time buyers and UK family size.

jem16

EdInvestor wrote:

Two main reasons for preferring the house and ISA savings/investment route first:

-you can't live in a pension

I still feel the earlier you think about it the better even if it's a small amount - gets you in the correct mindset.

I would also suggest that anyone who has access to a good company pension makes an effort to pay into it, even if only a small amount.

Now that I agree with.

I think we also need to remember that young people are also now forced to pay for their university education ( and far more of them now go to uni).So they are already seriously in debt before they even start working.

Yes I'm astounded at some of the debts I hear about. I'm glad to say that in Scotland it's not so bad as the majority of students live at home ( it's normal here unlike England ) and fees are paid for. My son is about to graduate this summer and has only a graduate endowment to pay back - around £2000. Fees were paid and he hasn't needed a student loan. I know some of his friends took a loan but then squandered it on a new hi-fi etc. I tried to make sure that he understood it meant starting off working life in debt. He doesn't usually listen to me but in this case he seems to have.

ReportInvestor

£30K+ is the expected cost of getting through uni (fees and living expenses) for next year's cohort.

Significantly more in London.

jem16

Think I'll stay in Scotland then.

ReportInvestor

jem16 wrote:

Think I'll stay in Scotland then.

Even Barnet has said his formula is out of date and a con against the rest of the UK. How Scotland gets away with it, I don't know.

Actually, looking at the number of Scots in the cabinet and the Celtic Fringe backing for the current UK government, I do.

Now what did the OP ask, again ?

jem16

Jus when I thought we could actually agree on something, you come up with this comment.

ReportInvestor wrote:

Even Barnet has said his formula is out of date and a con against the rest of the UK.

Since when was England the rest of the UK? The Barnet formula applied to Scotland, Wales & Northern Ireland, as well as England.

How Scotland gets away with it, I don't know.

Actually, looking at the number of Scots in the cabinet and the Celtic Fringe backing for the current UK government, I do.

Ah the "Big Lie"!

http://www.siol-nan-gaidheal.com/tt7.htm

In the end how Scotland chooses to spend its money is down to the Scottish Executive and its people, the voters. Scotland obviously felt it important to look after its young people - so could England.

Please let's not go down the England v rest of UK route.

ReportInvestor

Free personal care for the elderly.
Subsidised university education for the young.

All paid for from the vibrant Scottish economy :rolleyes: struggling in the face of depopulation.

Roll on Scottish independence, I say .

Chrismaths

Nah, they're worth it for the entertainment they provide whinging about the English. What would they do if they had no one to blame?

jem16

ReportInvestor wrote:

Free personal care for the elderly.
Subsidised university education for the young.

Oh for heaven's sake - at least get your facts right.

"Free" personal care for the elderly - if only :rolleyes:

Anyone with capital of over £11,500 - including the value of their home - will not get "free" care.

http://www.seniorsnetwork.co.uk/freecare/index.htm

Many Scottish Councils are also faced with legal action for not even providing as much as "free tea and toast" to those who do qualify.

Subsidised university education for the young

Fees at present are approx £1100 p.a. so a 3 yr course will be approx £3300. The graduate endowment, more popularly known as graduate tax, will pay back £2216 - a "saving" of about £1000. That will certainly be a big help to that student debt of £30k you mentioned earlier The main savings come because most Scottish students stay at home, just as I'm sure could be achieved in England.