Onwards to freedom!

SuperSecretSquirrel

January 1st 2026 Update

Hello MSE and hello 2026! 😁 I hope you have all had a wonderful Christmas and New Year 🙂

A fair amount has gone on at Squirrel Towers during 2025 but I've avoided posting and oversharing. I'm going to have to fess up to some of it now though or the finances update will make absolutely no sense 🤣

The biggest change has been my move to the public sector. I'm not particularly enjoying the experience, and am expecting it to be a fairly short lived experiment, but I'm not regretting the decision - the pension transfer has been quite lucrative!

I closed an old employer pension and split the funds between my SIPP (85k) and my new DB pension (54k). The terms of the transfer to DB were generous - divide the transferred amount by 12.25 to arrive at the annual pension value. If valuing a DB “pot” as x25 the annual pension that's more than a doubling of value through transferring. On the other hand the DB pension is only accessible from age 68 (unless actuarially adjusted), but the SIPP should be accessible from age 58. It's possible these ages could change, but I'm expecting the 10 year gap to stay the same. Since the DB from SPA will essentially be a bonus on top of the SP I didn't want to squeeze the SIPP too hard. I am happy with how things settled in the end.

I now have a SIPP pot sat at ~109k and an annual DB of ~5.2kpa (valued at ~130k i.e. x25 for NW purposes). My current SP estimate is ~£9.3kpa, if I contribute a further 8 years I'll hit the maximum ~£12kpa. It doesn't take a big salary to earn a qualifying year so a lot of those years could be part time,and quite possibly self employed.

I'm letting the SP and DB take care of themselves now. They are already at a level sufficient to cover my anticipated regular spending in retirement (so long as they keep up pace with inflation, as they should). Any more in there will be a nice bonus but there's no real need for additional contributions.

I'm currently paying £1kpm into my SIPP (£800pm from net salary and £200pm basic rate tax relief). Current highly unscientific thinking on this is to carry on for a year or so and get it to at least 120k (enough for 1kpm drawdown for 10 years) before I think about switching back to favouring the ISA.

I am also currently paying £1kpm into my S&S ISA, slowly running down cash savings in favour of equities. I don't really have a stopping point for the S&S ISA other than wanting to ensure I always have a nice cash cushion (say a minimum of 30k as a gut feel “comfort” amount) behind me. I don't really know when I'll stop working (or reduce my hours) and start drawing down on savings. In theory I could start very soon, but I don't intend on doing so just yet.

That's the big picture stuff covered. On a more day-to-day level the general budgeting approach remains the same as before but I've bumped up some of the allowances (partly down to real inflation and partly down to intentional lifestyle inflation to better "enjoy the journey”). £260pm each sent to the joint account (bills and lumpy joint spends), £300pm theoretically sent to my personal easy access savings (the personal lumpy spends “budget” - more than this comes back out again at the moment to fund S&S ISA as I'm intentionally drip feeding cash into S&S), £400pm budgeted for my boring monthly spends, £150pm budgeted for my monthly fun spends, any current account remainder on payday gets swept into easy access cash savings. OHs budgeting/spending is none of my business - as long as the joint account gets funded I'm happy to leave her to it, and she's happier being left to it! She saves each month, has a DB pension building up, and has no intention of retiring particularly early, so all is well on that front.

So, with all of that explanation out of the way, on to the figures…

             01/01/2026  01/01/2025  01/01/2024  01/01/2023  01/01/2022  01/01/2021  01/01/2020  01/01/2019  01/01/2018  01/01/2017  01/01/2016  01/01/2015  01/01/2014

Pensions*     338496.62   222890.96   187787.05   149152.25   132122.78   111794.17   108995.12    81848.33    78458.66    61324.05    41170.41    31113.46    23737.91

House         175000.00   175000.00   165000.00   165000.00   165000.00   125000.00   125000.00   125000.00   125000.00   125000.00   125000.00   125000.00   125000.00

S&S           149886.45   127061.62   105979.60    82315.62    77690.97    60168.60    56018.64    36823.05    26607.27    13313.37     6488.53     3052.50      510.96

Cash           87330.09    76905.26    74234.42    67161.64    58676.96    48913.53    26906.74    24858.94    39576.36    47225.02    49581.61    59482.43    44326.80

Cars           21259.00    22859.25    16924.00    10980.00    13172.50    12485.00    13137.50    17015.00    14715.00     8900.00    10700.00     9000.00    10000.00

Debts              0.00        0.00        0.00        0.00        0.00        0.00        0.00     -152.15   -14968.46   -28181.35   -43315.47   -71540.58   -77762.15

Total         771972.16   624717.09   549925.07   474609.51   446663.21   358361.30   330058.00   285393.17   269388.83   227581.09   189625.08   156107.81   125813.52

* Pensions = My DC total 108,641.12 + My DB annual total 5,199.38 valued at 129,984.50 + OH DB annual total 3,994.84 valued at 99,871.00. Excludes SP.

An incredible leap forward in NW this year - mostly credited to my pension transfer. Add to that ongoing pension, s&s isa, and easy access cash contributions, and a cooperative market, and it's looking like a very good year!

Of course inflation is still a bit of an issue, along with the seemingly ingrained price rises locked in over the past couple of years, but there's nothing much I can do about that.

I've revised the estimated annual spend values again this year. It may look like a very convenient and totally made up “1k each per month”, but it isn't. I've tracked my own spends all year and 12k is a very fair approximation (note that I don't spend all of my boring/fun budget most months). I've assumed OH spends similarly for simplicity. She is likely to spend a little less in reality, so if anything I'm likely to be overestimating annual spends a little, but not by enough for it to be a problem.

Adding up the pension/isa/easyaccess assets in my name and assuming a 4% withdrawal rate it would appear I'm 152% FI already excluding SP. Looking at similar joint figures, we're at 96%.

These FI% figures have always been quite fun to track, but they aren't really “solid” enough to base any big decisions on. For that I prefer cold hard account balances in today's money, annual spend amounts in today's money, and a straight line extrapolation into the future. Essentially assuming inflation and any gains cancel each other out cleanly. This is likely to be on the pessimistic side of things, and that is probably a good thing as I want a built in safety margin.

I've spent a lot of time over the past few days looking into these figures, going into far greater depth than usual. The time I've dedicated to it suggests a change certainly isn't as good as a rest when it comes to work! I still value an escape plan massively, and am starting to look at “how soon” not “what if” scenarios…

I won't reproduce my figures in full, but I've looked quite deeply into “what if I stopped working forever on 1st Jan 2026”, and come to the conclusion that it should be quite doable. I could top up my SP credits for three years by being a SAHD. I could continue moving cash to equities, but only 2880pa to my SIPP gaining tax relief, the remainder into the ISA. The stage of life buckets would end up at (all in today's money), 13.1kpa between ages 42 and 58, 12.3kpa between 58 and 68, and 15.3kpa from that point on. That's my figures only, OH would add to that for the household. If all things stayed the same, that should be enough from now until I die. There's all sorts of risk involved, so I'm still not brave enough to jump, but it's nice to know the numbers should stack up, and that they stack up in what is an overly pessimistic model.

The fact I'm planning on working for a while longer leaves me feeling very relaxed about the figures. My accounts are pretty much there already, with plenty of runway left to go. This should amount to a comfortable amount of slack when I do eventually retire - a slush fund to help the children along in life (within reason) and deal with the occasional large/unexpected expense, and a little headroom over and above expected living expenses to help us sleep soundly at night for a few decades all being well!

I am finding myself more and more open to the idea of a nice career break these days. I'm giving serious thought to sticking to my new job for up to two years, then handing in my notice, without having another job to go to, and treating myself to a year or so off work entirely. I wouldn't do anything extravagant in that time - help out a little more at home, spend more time alone in nature, get serious about the gym, dabble in projects seeing if any might serve as a self employment “job” later on, and be fully present/available at all times when my family aren't at work/school. At the end of the year I could decide to find a job, pursue a self employed option, or do something else entirely. Something I'll be giving serious consideration to over the coming months.

I’m aware that there's very much a “me, myself, and I” focus here, but that's because none of it really applies to OH. She still intends to work until a “normal” pension age, realistically planning on giving up work at some point between 58 and 68. That's the path she wants for herself, and I am perfectly happy with that. If I retire first I know full well that I have a huge amount of solitary interests that I'd be more than happy to be getting on with while she's busy socialising at work 😂 

That brings me onto the other thing that I've been channelling my potential midlife crisis energy into. I've avoided the sportscar/affair/depression options and thrown myself wholeheartedly into activities focused on physical health and fitness. I carve out a little “me time” each week to indulge myself, this is in addition to family activities like hiking/swimming/kickabout etc. The upshot is I think a good boost to mental health (the "quiet" alone time is almost meditative) and without doubt an improvement in physical health. I'm in the ideal weight range with my weight incredibly consistent over time (weekly weigh-ins) and good composition. Body age tests consistently knock a few years off. My performance in terms of speed and endurance across various disciplines has improved noticeably. Best of all when I look in the mirror (from the neck down haha!) I am in better shape at 42 than I was at 21, and I was in reasonably good shape back then. I'd love to dedicate more time to health and fitness as I reduce my working hours.

I've rambled on more than enough to make up for a year of no posting. Time to wrap it up…  We're on course financially, and it's a happy and healthy household 🙂 I'm still following along on various diaries, but I'm not planning on posting often (for now at least), so until next time - good luck and good finances to you all! 🍻 

South_coast

Great summary, SSS 😀 Always lovely to hear from you