Turning point at 30- life and savings dream?

HI Guys,

I am 30 years old (well nearly, in a few months). I have up until now been a teacher and now am thinking of a career change. The demanding nature of the job slowly is destroying what is left in me.

I have about 20k in savings in the bank. And quite a big student loan of 26k that is still gradually being paid off. It seems that the loan doesn't seem to decrease, no matter how long I have had it! And it was financed by the government with the student loans company.

I am probably going to be going into a job where I will take a substantial pay cut (20k if I am lucky) and I will work my way up again from scratch. I don't know if that is going to be realistic to save for a mortgage or not, living in greater london at the moment with parents.

Has anyone else been in that position before and share their experiences. Particularly a few things I wanted to know:

1. At the age of 30, how much did people have in their savings towards their first home?
2. Is it realistic to think that with a 20k a year job and a 20k savings I could get a mortgage for a flat?
3. Should I be paying off my student loan before I start to buy a home?

Thank you

B x

Replies

  • savingwannabesavingwannabe Forumite
    16.4K Posts
    Part of the Furniture 10,000 Posts
    When I was 30 I had £38000 saved up for a house. Now I have a house and no proper savings. I do love my house though.


    I am a teacher too. It is becoming harder and harder as I don't know anything else. It has been 20 years since I worked in banking. I think you are brave to leave. Is it worth you going part time in teaching (like me) that way you wont have such a wage drop by switching to a lower paid industry?


    I don't know how loans work properly. I would pay off the loan but maybe it's best to start thinking of a flat so you have something to aim for. Hang in there it will get better. :beer:
    Aiming for a minimal spend 2022
  • Hi shall be following you, I'm 27 also a teacher and likely to be changing profession. Student loan I am still advised to not bother paying it off but not sure. My partner and I brought our home last year I am main earner so like you pay drop is a concern, but if you manage money wisely you should be able to save towards a mortgage.
    A big thank you to all those who post on the forum and make it a worthwhile place!!!:j

  • quanticquantic Forumite
    1K Posts
    Part of the Furniture Combo Breaker
    Its hard to say really - I bought my first house at 24 with a 12k deposit and was earning 24k at the time. This was in the north though where houses are considerably less expensive than down south.

    Realistically the most your likely to be able to borrow is probably 100k with the decreased income (20k) + deposit. It would almost certainly be easier to borrow on your current higher salary and then think about career changes later. Having said that, it does present its own problems in that changing careers while having a mortgage is more risky.

    Not that I'm trying to talk you out of changing careers but I didn't enjoy my job either when I was younger but buying a house did make me feel like my job had more purpose, whereas while I lived at home I felt like the stress etc was for nothing. Sure I had money saved up, but savings rarely make you feel much each day until you spend them, they're just a number on your bank receipt - you can look at the number go up and feel good in that moment but it doesn't add much value to your life until you deploy them to do something beneficial.

    My job doesn't give me the satisfaction other people get but it does give me opportunities outside of work which are satisfying. Also - sometimes people require more satisfaction because they don't have a lot else to focus on.
  • dandan83dandan83 Forumite
    6 Posts
    Fourth Anniversary
    Newbie
    Hello,

    Your situation struck a chord with me, it's late so I'll keep it brief I hope that's okay.

    In 2007 I got QTS, I taught for a year it wasn't for me, I was 24 at the time and living in West London.
    Also in 2007 I purchased a house with a 5% mortgage, silly huh! I couldn't afford it and managed to rent it out and move back to my parents all the time overpaying and buying shares in a particular company with any spare cash- I doubt I could have afforded it 'even' on a teachers wage, I rented it for 4 years then sold it for a small £10k profit. ( I don't look at the price of it now it makes me want to cry) I put that money towards a second house for my wife and our baby.

    I quit primary school teaching and worked for a company who operated within the NHS, it paid 17k, after a year I was promoted to junior project manager and given a pay rise to 23k. I did this for 3 years then moved out of London.

    I took this experience and moved into the public sector where I worked in clinical governance in the NHS, I did that for 4 years and am now an Assistant Manager at a GP surgery, I'm still on less than I was earning as a teacher but I'm happy and get around £21,000 a year which is a struggle as my wife does around 15 hours a week at a supermarket.

    As for your questions, my answers may not help but I will be honest.

    1. At the age of 30, how much did people have in their savings towards their first home?

    When I was 30 I had £98,000, I've always taken risks (not now though the wife would kill me!) I made a 5 figure sum on a particular ''penny' share and haven't touched any since. I also won £5000 on a fruit machine in a casino, also not touched since - all pre-wife. I have had a very lucky life I will admit that.

    2. Is it realistic to think that with a 20k a year job and a 20k savings I could get a mortgage for a flat? Not in London in my opinion, without having a massive loan. Save up as much as you can to get a better loan to value mortgage.

    3. Should I be paying off my student loan before I start to buy a home? No, I have about £20,000 in student loan still, leave it alone pay off what it automatically takes and never overpay. If you lose your job, no one will come knocking for payments. Think about number 1 (you) and put all money into your own pot.
  • Definitely don't pay off your student loan, particularly if you're going to take a drop in salary.
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