Busy Mee's Last Leg

Busy_Mee1

So after what feels like days of continual rain, the sun has finally come out this morning :T
It certainly makes you feel better and cheers everything up.

Thank you everyone for their kind thoughts, it is really much appreciated. Life is starting to get back to normal again but FIL is going to need a lot of support for the foreseeable future. Thankfully Mr Mee is now within days of retirement which will relieve the pressure quite a bit.

We did have another crisis this weekend with a different parent admitted to hospital with a chest infection. Luckily it doesn't seem too serious ( although he is in his 90s so most health problems potentially are). It did cause us some anxiety at first but they have pumped him full of antibiotics and hopefully he will be going home early this week. It did mean a full day out for us yesterday to visit him in hospital.

I feel like I have a grip on the finances again an we will hit our savings target this month. I have also been rigorously Tilly Tidying, and paying other bits and pieces (TopCashback etc) into the odds and sods account to cover Mr Mee's Birthday present and Birthday treats.

Health wise I am still running, but not managing three times a week, more like once or twice. I have done Park Run three times though :T I have only managed to lose 5lbs, although I suppose it is better than nothing. I am a bit of an emotional eater, so glad I haven't gone completely off the rails.

I have been mulling over how I have going to manage finances post Mr Mee's retirement. I want to continue with my diary, because it keeps me focused and make me accountable. I don't want to start relaxing too much and wasting money. We want to do lots of travel, so need to focus our spending on that.

At the moment I think I will become a proper MFW and start chipping away at the mortgage, so that when we get to the end of term in 2024, we will have less to pay out of our savings. I will also keep the odds and sods account going, because that helps me to sweat the small stuff and I love how all the little bits of free money add up:T

I have started to panic about Christmas this week.....only 9 weeks to go and I am away for 3 weeks of them. I sat and did a couple of online shops ( Debenhams and Cath Kidston sales) to get started last night.

I think that is all today. I hope you all have sunshine today too, have a great Sunday

Busy_Mee1

Brace yourselves. I have been thinking ( and over thinking) some new targets and aims for after Mr Mee's retirement.

I want to start the new regime in January (gonna fudge over November and December because we are away and it is Christmas).

Essentially we will be mortgage neutral and will have enough money to pay off the mortgage, but will have no other capital, until I retire and get my lump sum.

At the end of December the mortgage will be:
Repayment mortgage. £50,130
Interest only mortgage. £169,000
Total mortgage. £219,130
Mortgage interest rate. 1.44%
End of term April 2024

So I have been thinking about the options

Option 1
Pay off the lot - This would mean using all our capital, some of which is tied up in fixed rate ISAs and regular savers which earn more in interest than 1.44%. This would leave us with no emergency fund.

Option 2
Pay off a chunk of the Repayment Mortgage - this will reduce our outgoings but means we do not have to repay the IO mortgage until the end of term. This is a good option when I retire and our income is further reduced.

Option 3
Continue to repay the repayment mortgage as now but try to pay down the IO mortgage gradually. This means that the repayment mortgage will be paid off at the end of term and the IO will be reduced. Psychologically this will feel better as the amount of our capital that we will have to hand over to the bank will be much less and I won't need a general anaesthetic to do it :rotfl:

Option 4
Continue to repay the repayment mortgage as now and save what we can, so our capital continues to grow and there will be a surplus when it comes to paying off the mortgage.

I think the answer will be a hybrid of option 3 and 4 whilst I continue to work and depending on what saving interest rates I can pick up.

Keeping the mortgage running until the end of term, and offsetting savings against it, does give us a high degree of flexibility and access to cheap funds if we wanted to move, or the kids need to borrow any money.

I think to start with I will try and pay a nice round £200 per month off the IO mortgage ( it needs to be a round number because this is also our current account and we need to know what figure we are aiming for at the end of the month ). Anything else will go into savings for holidays and any bits and pieces will go into the odds and sods account, with a view to paying off further chunks of the IO mortgage.

We will need to see how we are managing on the new budget and Mr Mee's reduced income to see whether we can up this at all. I want a nice balance of being able mindfully spend money on having an enjoyable life but not wasting money

Sorry for the ramble but it helps to set all this down :rotfl:

Suffolk_lass

I have a Tilly Tidy holding (interest bearing) account where I round down both C/A each time a payment is taken - then I use this pot of accumulated TTs to cover annual things like house and contents insurance if it would leave me short in that C/A and I have a schedule of when to expect these annual payments. In between I use this pot to pay small extra lumps off the mortgage.

In theory I have a large lump of capital over and above the mortgage but lots of it is tied in, tied up or otherwise planned to be spent. The non earning thing is taking some adjusting to here.

You will know that that 1.44% of 200k is £2880 (£240 a month, £8 a day-ish) - that is a lot of interest from accounts to juggle with to exceed that. For me it is striking the balance and our £230k mortgage is now under £18k and £18.50 a month interest. A much happier figure to sit with but the squirreling of TTs is now in-built. I so prefer it to lump sum saving.

Busy_Mee1

It is amazing how addictive Tilly Tidying is and how quickly it all adds up.

Because our mortgage is an offset mortgage, we can just sit funds in the attached savings pot and it offsets against the mortgage. That way we match at least 1.44%. I do try to wring more out by using savings that pay more.

I think while ever I am still working I feel comfortable not paying any of it off, but if I retire we will probably rethink or I might rethink anyway :rotfl:

Busy_Mee1

It is pay day and Mr Mee's final salary has arrived. He will receive a part month at the end of November but then he will be a pensioner :rotfl:.

Here are the figures for October. A bit samey but at least our savings are consistent.


Repayment Mortgage £51936.85
IO Mortgage. £169,000
Total Mortgage. £220,936.85

Monthly savings. 1,500
Total savings. £84,500

Savings offset mortgage to. £136,436.85

Just one more month of being able to save a this rate and then everything changes. I have no concerns about managing on Mr Mee's reduced income. We currently save more than he will lose and we should also be able to continue to save or chip away at the mortgage.

After a week of nice sunny days, it is raining again and even the dog isn't up for going out :rotfl:

pinkypig

Busy, I’m so very sorry for your family’s loss .
I’ve been rubbish at keeping up with the diaries and have just read about your sad news .
Wishing you and your lovely family all the best for OH’s retirement and your fabulous trip xx

savingholmes

Hi BusyMee just caught up on your diary. So sorry to hear of your loss. It sounds like Mr Mee is retiring at a good time and will be able to come to terms with things without the pressure of work too.

I think as long as you know that you are getting more than you are paying in interest - and it is guaranteed - that it's a positive way forward. I am having a similar grapple with plans for next year when we will be CC free. We will have over £2K pcm to send to either pension or mortgage per year - basically OH's salary. I am considering putting it in some form of self invested pension so we have freedom to access it from age 55 if we want. That way - it would get 20% tax relief plus any earnings from investment. I could still withdraw some of it as a lump sum on retirement if we wanted.

I believe you can top up your pension by upto £40Kpa - is there any merit in you doing that to increase tax relief and then take it back as a tax free lump sum on retirement? It is one of the options I have been considering - but would need proper pensions advice before doing as there are loads of rules around it all.

Suffolk_lass

savingholmes wrote: »

We will have over £2K pcm to send to either pension or mortgage per year - basically OH's salary. I am considering putting it in some form of self invested pension so we have freedom to access it from age 55 if we want. That way - it would get 20% tax relief plus any earnings from investment. I could still withdraw some of it as a lump sum on retirement if we wanted.

I believe you can top up your pension by upto £40Kpa - is there any merit in you doing that to increase tax relief and then take it back as a tax free lump sum on retirement? It is one of the options I have been considering - but would need proper pensions advice before doing as there are loads of rules around it all.

The £40k figure is the maximum you can pay into your pension in a single year tax free - but it presumes you are earning more than that. If you are no longer earning that figure drops to £2880. It is a good way for some people to keep their tax at 20% rather than popping up to 40%, especially if their employer will match additional contributions.

When you want to draw down your funds up to 25% may be taken as a tax free lump sum - because it is tax free a lot of people choose to do this while they are still working (we did this from DH's private pension pot and paid down the mortgage). This does then impact what you can pay in. It also depends on what your pension is (or pensions are) -

• SIPP - yes you have the freedom (and the associated risks, all in your control)
• Private Pension - it depends who you are with - DH's was originally with Royal and Sun Alliance and we moved it to Clerical Medical, then Lloyds Bank group took them over - and when we took the 25% TFLS we had to move the funds to a lower risk set with Scottish Widows. I feel sure we have paid for each move...
• Occupational pensions - it depends on whether this is defined benefit (final salary) or defined contribution (accumulating pot that the employer sets up but you eventually buy an annuity (or cash in, or draw down) - the public service pension I have did allow people to draw down while working but only if they partially retired - and to maximise the cash they would commute some income to TFLS

As you say - it is a bit complicated

Busy_Mee1

Mr Mee is over the finish line......he has retired and is now without portfolio :T

And so far so good, he is doing lots of jobs and dog walking and sorting his Dad out. I actually also feel like a weight has been lifted off me too, as he is doing lots of jobs through the week that mean I get a lot more leisure time at the weekend. I am particularly pleased that he is picking up all of those irritating tasks that are a logistical nightmare when you work......things like paying in cheques, collecting parcels from the post office and posting parcels. I also feel bizarrely that quite a lot of financial pressure has been taken away too. This is because we have been working towards his retirement for the last few years and we now we are here and he has been able to retire comfortably and we don't need to sell the house

Mr Mee has had a bit of a fail with his pension. He posted his forms back to CS Pensions in an A4 envelope and didn't use a large letter stamp. It sat uncollected at the post office for over a month and then was returned to us last week. So he has not received his lump sum and his pension will be delayed. :mad: A bit of a learning experience for him but I wish he had learnt in a way that wasn't costing us interest on a large sum on money :mad:

Otherwise financially we are fine and all on track. I think I am going to open the Principality Christmas regular saver (£125 per month @ 2.75%) to siphon from the odds and sods account. It won't mean loads of interest but this will give me the focus to try and sweat the small stuff. There is around £650 in there at the moment and if I use this and whatever else I can scape together, it will build into a lump sum of £1521 by this time next year :T I can then use that to pay down the mortgage, fund Christmas or whatever

Saving Holmes, you have got me thinking about making some extra contributions to my pension to reduce my tax liability. I am going to look into this. I guess much will depend how long I carry on working. At the moment I am considering taking partial early retirement and taking just my Classic Civil Service Pension. I will then keep my much smaller Alpha pension going and maybe make some additional contributions to bring my tax liability down.

Thanks everyone for popping in and their kind thoughts. Hope you all have a good day. It's rather soggy here x

Cornish_mum

Congratulations to MrMee. Retirement sounds amazing. It’s really inspiring to hear your story and that you managed to pay your mortgage down sufficiently to stay in your house. So pleased for you and your family.