Redundancy looms! How do my figures stack up?

atush

You could afford more pension or ISA contribs with just a few small cuts you probably won't notice.


Do a spending diary and write down every penny you spend incl parking fees, a coffee etc. Write down all your subscriptions, DDs etc.

Get a fancy pants coffee every day? But a sandwich out? Get a newspaper everyday but fail to read it half the time? Magazines you don't really need. smke? Just cutting out some or all of these will free up quite a bit pf money and I bet you wont' even miss it (well cigs you would miss at first but not later). We cut out the daily newspapers (still get weekend ones) and sandwiches (now I make them every day) and opened an inv trust plan just with that money- it is worth Thousands now ;-)

Muppet81

One very promising piece of information

OH has just checked on his employeres online calculator for pension enhancement. It looks as though he could double up his lump sum to over £130k and still receive an annual pension of £20k.

Thanks to those of you who pointed us in that direction :A

Although my pension is not due until DEC 2016, I am in the same pension scheme so presumably will be able to do the same with mine if that is the most appropriate thing to do by that stage.

Muppet81

atush wrote: »

You could afford more pension or ISA contribs with just a few small cuts you probably won't notice.


Do a spending diary and write down every penny you spend incl parking fees, a coffee etc. Write down all your subscriptions, DDs etc.

Get a fancy pants coffee every day? But a sandwich out? Get a newspaper everyday but fail to read it half the time? Magazines you don't really need. smke? Just cutting out some or all of these will free up quite a bit pf money and I bet you wont' even miss it (well cigs you would miss at first but not later). We cut out the daily newspapers (still get weekend ones) and sandwiches (now I make them every day) and opened an inv trust plan just with that money- it is worth Thousands now ;-)

Did this excercise 6 years ago when I was made redundant and took a £20k drop to get another job albeit part time and much lower income.
Did the spending diary, made the sensible cuts.
We both agreed that despite the drop in money, our quality of life improved. Did not feel deprived of anything.
3 years later and redundant again we decided that I would stay at home and I have loved the opportunity to, after working for 28 years, become a housewife. I love the cooking, shopping, cleaning, crafts etc.

We learnt to cut the designer coffees, magazines etc. My only magazine now is from a subscription taken out using Tesco Clubcard points

It is our hobbies and interests which will have to be reduced to some extent. One of the problems of having more time and not being exhausted from working is that you feel more like getting involved in things.

atush

Look for some free stuff, such as clubs and volunteering perhaps?

Stargazer57

Muppet81 wrote: »

One very promising piece of information

OH has just checked on his employeres online calculator for pension enhancement. It looks as though he could double up his lump sum to over £130k and still receive an annual pension of £20k.

Thanks to those of you who pointed us in that direction :A

I'e checked the thread and the "direction" in which posters were pointing you was to commute less, not twice as much, because the terms usually represent poor value for money.

But be reassured you aren't the first poster to be seduced by the availability of an immediate lump sum into giving up a valuable pension in exchange for it. There must be hundreds of threads on here asking the terms for such an exchange. I'd recommend you read a few of them before making a life changing decision.

Muppet81

Thank you for the warning. I intend to look into everything very carefully.

Muppet81

Stargazer57 wrote: »

I'e checked the thread and the "direction" in which posters were pointing you was to commute less, not twice as much, because the terms usually represent poor value for money.

But be reassured you aren't the first poster to be seduced by the availability of an immediate lump sum into giving up a valuable pension in exchange for it. There must be hundreds of threads on here asking the terms for such an exchange. I'd recommend you read a few of them before making a life changing decision.

I have spent hours carefully reading all the advice I received. I am now beginning to see some clarity and forming ideas and thoughts to put to the IFA on Tuesday.

I do see that by doubling our lump sum, we would lose a considerable amount of pension income should we live to be anything over 72. With a 12:1 rate. As one of the other posters suggested, our IFA is perhaps unlikely to point that out as he will want a large pot to invest on our behalf.

Have re done my spreadsheet and brought in costings for replacing items over the years as well.

Have decided that we will probably do our kitchen extension out of the £32,000 redundancy pay as this really is essential to us staying where we are now. This will take approx £20,000 leaving only £12,000 of that to invest.

Have made a few assumptions, does anyone think these are way out?

Allowed 2.5% inflation rate on cost of living each year.

Estimated an average 3% return on our capital. As we need to draw on it over the period 2012 to 2016 none of it can be tied up long term or in risky investments. Probably looking at combination of ISAs and Growth Bonds.

Estimated that OH's annual pension of £25406 gross (£1818 net pm) will rise by at least £750 pa due to being index linked. Looking at his projected pension at 65 this looks likely.

Assume no NI paid on pension, just tax.

I have added my own pension to the figures with effect from Dec 2016 but have not added any index linked amount to it at this stage.

Have brought in our state pensions but shown them at the current amount as no idea what they will be by then , or if we will even be getting one!

Talked about things we can make relatively pain free savings from and there are a few which are worth doing.

LOVE the suggestion made of doing a booze run to France. OHs brother lives down south so a visit to them and a cheap trip over to get annual supply of beer and wine. Great idea and we are restrained enough not to turn into total drunks just because we have a cellar full of the stuff.

Feel we are now in a position to discuss things in an infomed way with the IFA.

Pollycat

See my post #13 on your thread.

We built in a 5% increase on utility bills, 4% on council tax.

We estimated 2.5% annual increase on other spends such as fuel costs, holidays, food, insurance, car costs (service, road tax, MOT) etc.

You've estimated almost 3% increase on your OH's pension (£750 on £25406 2.95%) based on index linking.

My pension is fully RPI index linked and in 2010 I didn't get an increase at all.

However, in 2011 I got a big % rise which actually took me to the figure where I would have been if I'd got the 2.5% rise in 2010 and 2.5% in 2011 I have built into my spreadsheet but I don't think you can rely on that.

If you both have 30 qualifying years you won't need to pay NI if you retire.

Do you have reasonable 'life' estimates on things that need replacing?
Have you included everything that would be a major expense?
Fridge
Freezer
Large TV
Small TV
Video
Home Cinema System
Washing Machine
Tumble Dryer
Oven
Hob
Microwave
Hoover
Sewing Machine
Bed & bedroom furniture
Suites - lounge/dining
Carpets
PCs/printers
Windows/doors
Car

atush

All good and usefull.

My Booze trip note.

Some of the box wines now are actually very nice and better quality than before, in particular a Grenache I brought back from our french bolt hole in august (a semi detached pile of stones I bought in 1991 for 5K). The wine was 9.95 euros for 5L bought at Auchan just east of St martin De Boulogne on the ST omer route. 15-20 mins south of the sangatte tunnel entrance. Better than the Cite Du Europe offerings I felt- but that is a mall and good for other things on your way back. Auchan is good for all sorts of french things and covers everything from electronics to clothes to furniture and food etc. Like Walmart in the USA.

But do find out what things cost here and there to make the most of it/the crossing. Unless you get a really good day rate (which can be harder these days) I feel you might benefit more from a mini break and staying the night in France as it will give you a bigger area to cover for food/wine and other buys.

Things I use daily here that i buy (and are cheaper there), are Wine, small lagers (used only in summer- buy in a case something like 33 export, Kronenbourg etc), extra virgin olive oil, dark chocolate bars (i use mine for cooking you can just eat yours lol), best quality french confture (jam), dijon mustard, and cheeses I can find in my local area. My boys bring back cider and petards (fireworks lol) and chocs and bonbons.