People in their 30's - future financial plans?

Willdabeast

I’m 32 and only started a pension and overpaying a mortgage 5 years ago, but have managed to save £65K in DC pot and build £150K equity in our house.

The last few years have been great in terms of saving as both myself and my wife have had promotions and have been overpaying the mortgage.

The arrival of our first child, wife on maternity and move to our forever home (much larger mortgage), have really changed things recently. From not worrying about money, we are now budgeting much more cafefully and the pension contributions will certainly drop. I would say priorities have changed and it’s a lot more of a juggling act now.

Gary123456790

Hi all,

I found this thread really interesting - our situation is as follows and i'd welcome any suggestions anyone has as to what I could be doing better.

I'm 33 and wife 34
Joint income around £80k
Wife owns a rented property with her sister, this has no mortgage and is worth approx £170k, rental income around £600/m after fees ( wife gets around £300/m)
I am currently making around £600/m profit on ebay, although this is highly variable
I put 5% of salary into a pension, employer puts 6.6% in, currently worth £29.5k
Wife has negligible pensions, does not believe in pensions, and does not believe she will live that long (family history of major diseases)
£243k mortgage, house value approx £850k therefore equity of just over £600k
Have £7k debt from house renovation, and no cash invested elsewhere

The rental property was bought around 25 years ago by my wife's father, he used some of his money and his 2 kids savings to buy it; it is a non-standard construction maisonette so was not mortgageable then (i.e. cheap) and value has risen considerably - the father in law declared at one point that he has had his money back so the property is now theirs, hence wife owns 50%.

The calculators tell me my pension will be worth around £18k/year which is not a massive amount but is something - I plan to have the house paid off well before retirement so I can save more then - it is a forever house and I will be happy to live there the rest of my life. I have 2 young children so this may well eat into future money when it comes to major expenditure, e.g. if they decide to go to university, however my wife is only working part time now so when they are both at school the total income will increase.

Thanks,

Gary.

stoozie1

Gary123456790 wrote: »

Wife has negligible pensions, does not believe in pensions, and does not believe she will live that long (family history of major diseases)


Gary.

I'm sorry she feels that way.

A couple who we are friends with asked for our advice and she feels similarly to your OH.

As I didn't think her view could be shaken, I just suggested a SIPP, with him as the sole beneficiary. That way she still saves in a very tax efficient way, but doesn't feel the money is wasted in the unfortunate event. (and she won't be a financial burden if she, [as I hope is the case!] turns out to be wrong.)

I hope that thought is useful.