Early-retirement wannabe

hugheskevi

FIREDreamer said:

@hugheskevi

Are you sure you can access your DC at age 55? The access age goes up to 57 in 2018.

Protected Minimum Pension age.

Both my wife and I have protection on most of our DC assets, and as we are not drawing them all at 55 it doesn't matter that not quite all of them are protected as we would be drawing the unprotected bits after 57 anyhow.

SarahB16

hugheskevi said:

My wife and I have now found our next home! It will be almost exactly 15 years of living in London when we move, other than the 18-month trip across the Americas, and a 3-month trip for me across Africa, which my wife accompanied me on for the first month.

We had planned to spend about £450-600K on a new house, but found somewhere for around £700,000 which is insanely big for our needs, but ticks every box we could imagine, so we decided it was worth it. So in the new year we should be moving to Cheshire, a bit south of Manchester. The sale is not yet complete, but there is no reason to think it will not proceed through to completion in January or maybe February.

Our London house is on the market, and it should sell for about £550-575K. The additional house cost and Stamp Duty put a bit of a dent in the financial plans, but nothing that a bit more work cannot smooth out. We plan to have fully moved (both bought and sold) by April, and then work until about Christmas 2025. I will review the financial position once we have moved and make more definite plans. There may be offers of redundancy at work, which either or both of us would take without hesitation, putting any payment subject to higher rate tax into our pensions.

As things stand, we have an income (after tax) of around £6,000 p/m from age 55 from a combination of DB, DC and State Pension. Once all the moving costs are sorted, I should have about 3-4 years of that level of income in SSISAs. We will both be 47, which is a shortfall of about 4 years.

We already have enough DC pension to fully smooth our post-55 income. However, we also will have an offset mortgage. That will be used effectively as a bridging loan initially, then 100% offset as soon as we sell our London home. It will then serve its second purpose in about 6 years, as I reduce the offset prior to age 55, and then either fully offset or repay the mortgage at age 55 using DC pension. That will effectively mean we can access pension prior to age 55. That is enabling me to be in the unusual position of contributing slightly more than 100% of salary (including employer contribution) into a DC pension between November and March this year. My wife is similarly piling into DC. Between us we will put a bit over £60,000 into DC pension this year all with higher rate relief, and my wife also is accruing a DB pension.

If we were to quit work immediately, we would either have about £35,000 p/a between age 47-55, or if we used the offset mortgage to spread the shortfall over the period 47-68 we would have about £58,000 p/a (after tax) increasing to £72,000 from age 68. I think with another year of work we should have something like £50,000 p/a between age 48-55 which should be sufficient, especially with the offset mortgage and pension standing ready. Working another year will also reduce the risk of unforeseen expenditure during and shortly after moving.

I think that after buying and selling, assets and liabilities (excluding property and pensions) our balance sheet will be something like:

Assets

Cash ISA	£36,354
SSISA	£344,635
Net proceeds from house sale	£560,000
Stamp Duty refund (2nd home)	£35,000
	£975,989

Liabilities

Total non-mortgage debt (mostly 0% credit cards)	£63,714
Mortgage	£587,000
New car	£20,000
National Trust lifetime membership	£2,735
Furnishing, new electronics, etc	£25,000
	£698,449

I have put under liabilities things I would plan to purchase during or after moving, but are not time-critical. The proceeds from the house sale plus Stamp Duty refund will be used to 100% offset the mortgage. I do not want to touch our SSISA, so earnings and/or cash ISA will fund the non-time-critical items, perhaps taking advantage of flexible ISA rules to use the cash ISA on those items and then use earnings to return the funds later in the year.

I was pleased that the £54K of nil-fee, 0% interest credit card debt we have didn't cause any mortgage application problems. The only question that was asked was whether they would be repaid or not, and either answer was fine, it just impacted the total lending limit.

It will be interesting to see if I can roll-over the credit card debt with a mortgage. I rather suspect I won't, in which case the cash ISA will initially go toward credit card repayments as some offers expire in April and May.

So all a bit of an awkward balancing act for the next 6 months or so between liquidity and tax efficiency, but I think I have every contingency covered now. The SSISA stands as a back-up if necessary, but ideally, it will go untouched.

Thank you for sharing the area where you are moving to.  Of course, 'Cheshire' covers a very wide area however I do believe you will be very happy with your new location.  

Please do continue to post updates as I'm sure I won't be the only one who will wish to hear your updates.  

Hoping everything goes well and wishing you the very best.  

hugheskevi

SarahB16 said:

hugheskevi said:

My wife and I have now found our next home! It will be almost exactly 15 years of living in London when we move, other than the 18-month trip across the Americas, and a 3-month trip for me across Africa, which my wife accompanied me on for the first month.

We had planned to spend about £450-600K on a new house, but found somewhere for around £700,000 which is insanely big for our needs, but ticks every box we could imagine, so we decided it was worth it. So in the new year we should be moving to Cheshire, a bit south of Manchester. The sale is not yet complete, but there is no reason to think it will not proceed through to completion in January or maybe February.

Our London house is on the market, and it should sell for about £550-575K. The additional house cost and Stamp Duty put a bit of a dent in the financial plans, but nothing that a bit more work cannot smooth out. We plan to have fully moved (both bought and sold) by April, and then work until about Christmas 2025. I will review the financial position once we have moved and make more definite plans. There may be offers of redundancy at work, which either or both of us would take without hesitation, putting any payment subject to higher rate tax into our pensions.

As things stand, we have an income (after tax) of around £6,000 p/m from age 55 from a combination of DB, DC and State Pension. Once all the moving costs are sorted, I should have about 3-4 years of that level of income in SSISAs. We will both be 47, which is a shortfall of about 4 years.

We already have enough DC pension to fully smooth our post-55 income. However, we also will have an offset mortgage. That will be used effectively as a bridging loan initially, then 100% offset as soon as we sell our London home. It will then serve its second purpose in about 6 years, as I reduce the offset prior to age 55, and then either fully offset or repay the mortgage at age 55 using DC pension. That will effectively mean we can access pension prior to age 55. That is enabling me to be in the unusual position of contributing slightly more than 100% of salary (including employer contribution) into a DC pension between November and March this year. My wife is similarly piling into DC. Between us we will put a bit over £60,000 into DC pension this year all with higher rate relief, and my wife also is accruing a DB pension.

If we were to quit work immediately, we would either have about £35,000 p/a between age 47-55, or if we used the offset mortgage to spread the shortfall over the period 47-68 we would have about £58,000 p/a (after tax) increasing to £72,000 from age 68. I think with another year of work we should have something like £50,000 p/a between age 48-55 which should be sufficient, especially with the offset mortgage and pension standing ready. Working another year will also reduce the risk of unforeseen expenditure during and shortly after moving.

I think that after buying and selling, assets and liabilities (excluding property and pensions) our balance sheet will be something like:

Assets

Cash ISA	£36,354
SSISA	£344,635
Net proceeds from house sale	£560,000
Stamp Duty refund (2nd home)	£35,000
	£975,989

Liabilities

Total non-mortgage debt (mostly 0% credit cards)	£63,714
Mortgage	£587,000
New car	£20,000
National Trust lifetime membership	£2,735
Furnishing, new electronics, etc	£25,000
	£698,449

I have put under liabilities things I would plan to purchase during or after moving, but are not time-critical. The proceeds from the house sale plus Stamp Duty refund will be used to 100% offset the mortgage. I do not want to touch our SSISA, so earnings and/or cash ISA will fund the non-time-critical items, perhaps taking advantage of flexible ISA rules to use the cash ISA on those items and then use earnings to return the funds later in the year.

I was pleased that the £54K of nil-fee, 0% interest credit card debt we have didn't cause any mortgage application problems. The only question that was asked was whether they would be repaid or not, and either answer was fine, it just impacted the total lending limit.

It will be interesting to see if I can roll-over the credit card debt with a mortgage. I rather suspect I won't, in which case the cash ISA will initially go toward credit card repayments as some offers expire in April and May.

So all a bit of an awkward balancing act for the next 6 months or so between liquidity and tax efficiency, but I think I have every contingency covered now. The SSISA stands as a back-up if necessary, but ideally, it will go untouched.

Thank you for sharing the area where you are moving to.  Of course, 'Cheshire' covers a very wide area however I do believe you will be very happy with your new location.  

Please do continue to post updates as I'm sure I won't be the only one who will wish to hear your updates.  

Hoping everything goes well and wishing you the very best.  

I'd really like to share the house advert itself, but that would share my exact future address, and along with all the extremely detailed financial information I share that wouldn't be wise. Sadly even sharing the area more precisely would make it quite easy to identify. So east Cheshire is about as accurate as it is safe to be!

SarahB16

Lifematters said:

I would’ve thought a house move from London to Northwest would bag you a bigger but much cheaper home. I can only imagine the new home must be amazing. Best of luck for the move.

There are pockets of areas within the North West (some areas in south Manchester, some areas within Cheshire and some areas on the Wirral) that are comparable to London prices.  

robatwork

SarahB16 said:

Lifematters said:

I would’ve thought a house move from London to Northwest would bag you a bigger but much cheaper home. I can only imagine the new home must be amazing. Best of luck for the move.

There are pockets of areas within the North West (some areas in south Manchester, some areas within Cheshire and some areas on the Wirral) that are comparable to London prices.  

I don't think Alderley Edge or the rest of the "footballer belt" regions are a particular secret. Lovely part of the country even if you're a Londoner!

Ibrahim5

There are loads of YouTube videos of blue penguins.

FIREDreamer

hugheskevi said:

FIREDreamer said:

@hugheskevi

Are you sure you can access your DC at age 55? The access age goes up to 57 in 2018.

Protected Minimum Pension age.

Both my wife and I have protection on most of our DC assets, and as we are not drawing them all at 55 it doesn't matter that not quite all of them are protected as we would be drawing the unprotected bits after 57 anyhow.

Good to hear. 

Did you get a letter from the government confirming the increase in pension access age? 😂😂😂

FIREDreamer

hugheskevi said:

SarahB16 said:

hugheskevi said:

My wife and I have now found our next home! It will be almost exactly 15 years of living in London when we move, other than the 18-month trip across the Americas, and a 3-month trip for me across Africa, which my wife accompanied me on for the first month.

We had planned to spend about £450-600K on a new house, but found somewhere for around £700,000 which is insanely big for our needs, but ticks every box we could imagine, so we decided it was worth it. So in the new year we should be moving to Cheshire, a bit south of Manchester. The sale is not yet complete, but there is no reason to think it will not proceed through to completion in January or maybe February.

Our London house is on the market, and it should sell for about £550-575K. The additional house cost and Stamp Duty put a bit of a dent in the financial plans, but nothing that a bit more work cannot smooth out. We plan to have fully moved (both bought and sold) by April, and then work until about Christmas 2025. I will review the financial position once we have moved and make more definite plans. There may be offers of redundancy at work, which either or both of us would take without hesitation, putting any payment subject to higher rate tax into our pensions.

As things stand, we have an income (after tax) of around £6,000 p/m from age 55 from a combination of DB, DC and State Pension. Once all the moving costs are sorted, I should have about 3-4 years of that level of income in SSISAs. We will both be 47, which is a shortfall of about 4 years.

We already have enough DC pension to fully smooth our post-55 income. However, we also will have an offset mortgage. That will be used effectively as a bridging loan initially, then 100% offset as soon as we sell our London home. It will then serve its second purpose in about 6 years, as I reduce the offset prior to age 55, and then either fully offset or repay the mortgage at age 55 using DC pension. That will effectively mean we can access pension prior to age 55. That is enabling me to be in the unusual position of contributing slightly more than 100% of salary (including employer contribution) into a DC pension between November and March this year. My wife is similarly piling into DC. Between us we will put a bit over £60,000 into DC pension this year all with higher rate relief, and my wife also is accruing a DB pension.

If we were to quit work immediately, we would either have about £35,000 p/a between age 47-55, or if we used the offset mortgage to spread the shortfall over the period 47-68 we would have about £58,000 p/a (after tax) increasing to £72,000 from age 68. I think with another year of work we should have something like £50,000 p/a between age 48-55 which should be sufficient, especially with the offset mortgage and pension standing ready. Working another year will also reduce the risk of unforeseen expenditure during and shortly after moving.

I think that after buying and selling, assets and liabilities (excluding property and pensions) our balance sheet will be something like:

Assets

Cash ISA	£36,354
SSISA	£344,635
Net proceeds from house sale	£560,000
Stamp Duty refund (2nd home)	£35,000
	£975,989

Liabilities

Total non-mortgage debt (mostly 0% credit cards)	£63,714
Mortgage	£587,000
New car	£20,000
National Trust lifetime membership	£2,735
Furnishing, new electronics, etc	£25,000
	£698,449

I have put under liabilities things I would plan to purchase during or after moving, but are not time-critical. The proceeds from the house sale plus Stamp Duty refund will be used to 100% offset the mortgage. I do not want to touch our SSISA, so earnings and/or cash ISA will fund the non-time-critical items, perhaps taking advantage of flexible ISA rules to use the cash ISA on those items and then use earnings to return the funds later in the year.

I was pleased that the £54K of nil-fee, 0% interest credit card debt we have didn't cause any mortgage application problems. The only question that was asked was whether they would be repaid or not, and either answer was fine, it just impacted the total lending limit.

It will be interesting to see if I can roll-over the credit card debt with a mortgage. I rather suspect I won't, in which case the cash ISA will initially go toward credit card repayments as some offers expire in April and May.

So all a bit of an awkward balancing act for the next 6 months or so between liquidity and tax efficiency, but I think I have every contingency covered now. The SSISA stands as a back-up if necessary, but ideally, it will go untouched.

Thank you for sharing the area where you are moving to.  Of course, 'Cheshire' covers a very wide area however I do believe you will be very happy with your new location.  

Please do continue to post updates as I'm sure I won't be the only one who will wish to hear your updates.  

Hoping everything goes well and wishing you the very best.  

I'd really like to share the house advert itself, but that would share my exact future address, and along with all the extremely detailed financial information I share that wouldn't be wise. Sadly even sharing the area more precisely would make it quite easy to identify. So east Cheshire is about as accurate as it is safe to be!

Sounds enormous, about 3 times the size of a modern 4 bed detached.

Hope you have factored in the energy bills, the north west has some of the highest tariffs despite not being a generally high earnings area. At £6,000 a month income, it’s a non issue I suspect.

Pat38493

hugheskevi said:

Lifematters said:

I would’ve thought a house move from London to Northwest would bag you a bigger but much cheaper home. I can only imagine the new home must be amazing. Best of luck for the move.

My house in London is only a very typical 3-bed 1930s semi-detached house, with a shared driveway at the side of the house leading to our garage and our neighbour's garage. About 100 square metres in total. It is in zone 3 in south London, not near Tube but quite close to a rail station that is 20 minutes into central London. It is ideal for cycling, being about 30 minutes cycle to the centre, and that has given extremely cheap commuting down the years, but doesn't affect house price. We never moved as there was never really any need to, just being the two of us, and so while a lot of our friends moved further out for bigger places, we remained as we did not want rail commutes into the centre.

The house I am buying is close to 300 square metres, and although the garden is not huge, it is still a decent size. Plus the location is much more desirable, being next to a country park, at the end of a very quiet cul-de-sac (compared to a non-descript semi in a typical 1930s urban sprawl). It is also much newer, being built in the 1990s.

There are several frustrating financial things about the change:

• we will be paying a huge amount more council tax despite there not being an especially big price difference between our old and new properties
• whereas our London house is 'cheap' for London and the decor reflects that, our north-west house is expensive for the area and the decor reflects that - it will cost a lot more to do things like replace kitchens and bathrooms to the expected standard. Despite being 15 years old, our kitchen and bathroom in London still compare favourably to similar houses, perhaps as many on the market may have been rented out for a lot of the last decade or so.
• the chance of getting an NHS dentist is nil
• in London people don't blink at my wreck of an old car that lives out on the street (we barely use it, so no point replacing it until it fails), but it will be very out of character in the new place so we will update it relatively soon after moving with something new or nearly new, that will live in a garage.
• it doesn't apply to the property I am buying, but quite a few of the places I was considering have unadopted roads or utility adoption issues - it is a big drawback given the problems faced in so many places with charges over which residents have little control.

Maybe not nil - there was a new NHS place in Partington that opened quite recently who was taking on NHS dental patients - I signed up and I know a fair few others that did too.

ussdave

hugheskevi said:

SarahB16 said:

hugheskevi said:

My wife and I have now found our next home! It will be almost exactly 15 years of living in London when we move, other than the 18-month trip across the Americas, and a 3-month trip for me across Africa, which my wife accompanied me on for the first month.

We had planned to spend about £450-600K on a new house, but found somewhere for around £700,000 which is insanely big for our needs, but ticks every box we could imagine, so we decided it was worth it. So in the new year we should be moving to Cheshire, a bit south of Manchester. The sale is not yet complete, but there is no reason to think it will not proceed through to completion in January or maybe February.

Our London house is on the market, and it should sell for about £550-575K. The additional house cost and Stamp Duty put a bit of a dent in the financial plans, but nothing that a bit more work cannot smooth out. We plan to have fully moved (both bought and sold) by April, and then work until about Christmas 2025. I will review the financial position once we have moved and make more definite plans. There may be offers of redundancy at work, which either or both of us would take without hesitation, putting any payment subject to higher rate tax into our pensions.

As things stand, we have an income (after tax) of around £6,000 p/m from age 55 from a combination of DB, DC and State Pension. Once all the moving costs are sorted, I should have about 3-4 years of that level of income in SSISAs. We will both be 47, which is a shortfall of about 4 years.

We already have enough DC pension to fully smooth our post-55 income. However, we also will have an offset mortgage. That will be used effectively as a bridging loan initially, then 100% offset as soon as we sell our London home. It will then serve its second purpose in about 6 years, as I reduce the offset prior to age 55, and then either fully offset or repay the mortgage at age 55 using DC pension. That will effectively mean we can access pension prior to age 55. That is enabling me to be in the unusual position of contributing slightly more than 100% of salary (including employer contribution) into a DC pension between November and March this year. My wife is similarly piling into DC. Between us we will put a bit over £60,000 into DC pension this year all with higher rate relief, and my wife also is accruing a DB pension.

If we were to quit work immediately, we would either have about £35,000 p/a between age 47-55, or if we used the offset mortgage to spread the shortfall over the period 47-68 we would have about £58,000 p/a (after tax) increasing to £72,000 from age 68. I think with another year of work we should have something like £50,000 p/a between age 48-55 which should be sufficient, especially with the offset mortgage and pension standing ready. Working another year will also reduce the risk of unforeseen expenditure during and shortly after moving.

I think that after buying and selling, assets and liabilities (excluding property and pensions) our balance sheet will be something like:

Assets

Cash ISA	£36,354
SSISA	£344,635
Net proceeds from house sale	£560,000
Stamp Duty refund (2nd home)	£35,000
	£975,989

Liabilities

Total non-mortgage debt (mostly 0% credit cards)	£63,714
Mortgage	£587,000
New car	£20,000
National Trust lifetime membership	£2,735
Furnishing, new electronics, etc	£25,000
	£698,449

I have put under liabilities things I would plan to purchase during or after moving, but are not time-critical. The proceeds from the house sale plus Stamp Duty refund will be used to 100% offset the mortgage. I do not want to touch our SSISA, so earnings and/or cash ISA will fund the non-time-critical items, perhaps taking advantage of flexible ISA rules to use the cash ISA on those items and then use earnings to return the funds later in the year.

I was pleased that the £54K of nil-fee, 0% interest credit card debt we have didn't cause any mortgage application problems. The only question that was asked was whether they would be repaid or not, and either answer was fine, it just impacted the total lending limit.

It will be interesting to see if I can roll-over the credit card debt with a mortgage. I rather suspect I won't, in which case the cash ISA will initially go toward credit card repayments as some offers expire in April and May.

So all a bit of an awkward balancing act for the next 6 months or so between liquidity and tax efficiency, but I think I have every contingency covered now. The SSISA stands as a back-up if necessary, but ideally, it will go untouched.

Thank you for sharing the area where you are moving to.  Of course, 'Cheshire' covers a very wide area however I do believe you will be very happy with your new location.  

Please do continue to post updates as I'm sure I won't be the only one who will wish to hear your updates.  

Hoping everything goes well and wishing you the very best.  

I'd really like to share the house advert itself, but that would share my exact future address, and along with all the extremely detailed financial information I share that wouldn't be wise. Sadly even sharing the area more precisely would make it quite easy to identify. So east Cheshire is about as accurate as it is safe to be!

As you've already indicated, some great cycling in this area (my usual haunts).  The hills around the peak district (Blaze, Pyms, Goyt Valley, Cat and Fiddle) are good fun, as is Mow Cop slightly more west if you want a quick challenging blast.  Also not that far north to Sky Road, Woodhead Pass or Snake Pass.

All depends on exactly where you end up of course   If you want to chat cycling routes at some point feel free to message me.  Sadly I'm not cycling much at the moment myself but I still know the roads pretty well and have a lot of routes saved I could share.