The Piano Diary

savingholmes

I am only learning myself - but if you have some separate emergency funds of 6 months to a year - personally I would want a diversified approach. If you are doing a drawdown option gradually - and don't need too much of the £ upfront - then 'safer' options may be less of a concern. It also depends whether any of your £ is a defined benefit pension with guarantee income.  

glass_half_full

Dear diary and all,

Thanks @savingholmes, much to ponder.

Came home from the supermarket yesterday to an upset OH concerned about the cat. Cat had been behaving strangely, pacing up and down, going into his box but then not going to the toilet. After a call to our vet, OH had established that it was likely to be a bladder infection and that he needed seeing quickly as it could be harmful for him. So we had to go to an out of hours vets connected to our surgery. This turned out to be quite expensive, £225 including the medication. I hadn’t taken out pet insurance since I had decided to pay as and when required as he is quite a young and healthy cat. However, this incident convinced me to get pet insurance. The excesses mean that it probably wouldn’t have saved us much this time, but it would if ever he gets something that costs several hundred or even thousands.

Spoke to DS and encouraged him to submit his tax return. He has agreed to do it this week, I have offered to help him if needed. He has got himself into a pickle with this previously and I am trying to help him sort it out. He works in a self-employed capacity. His ‘employer’ takes 1/3 of his income in exchange for providing  a venue and marketing etc to attract his customers. But its very much the ‘precariat’ in that he doesn’t get paid holiday, sick pay a pension or any other benefits. It’s a classic example of the ‘gig’ economy where, yes its flexible, but could be seen as exploitative. DS finally got around to submitting his tax return last year, but didn’t have the money so had to go on a payment plan. Here we are 12 months later and he is in the same position again. I have managed to find out that you can set up a direct debit to pay your tax in advance. So I am going to help him out this one last time and then from now he has to set up the direct debit so that next year he has the money ready to go. Unfortunately, the bottom line is that between them he and his GF don’t really earn enough to be able to fund their little household. I have said to him that with the 1/3 of his income e gives to his employer, he could strike out on his own, get his own premises, have his own business. At this stage he doesn’t seem to have the appetite for this. Anyway, for the time being, the main thing is to help him sort out his tax affairs.

savingholmes

Good luck on the DS situation. 

I fall foul of this type of issue myself sometimes - but - if we don't let them fly and even fall sometimes - we don't give our kids room to discover things for themselves and learn and develop their own financial muscles and earning potential. See £m-aire next door book... 

glass_half_full

Dear diary and all,

Went away with work which involved a couple of flights and so I had a bit of thinking time peering out the window. On my return I spoke to DS and pretty much insisted that he do his tax return. This was finally done last night. He earned around £26k so has a tax bill of £4k plus they want another £2k on account and then a further £2k at the end of July. He has made no provision for this. We are going to have to bail him out. I have explained to him this really is the last time. I have explained that he needs to set aside around £320 per month every month for tax and ni going forward.

Meanwhile the DC pension fund reached a high of £435k and then settled back to £425k. I am keeping an eye on the volatility in the US. For me a stop loss would be around £400k I would get out and move out of equities. Now I have exceeded the original target of £400k I am going to scale back the pension contributions. I’m going to need the income to pay off the debts! I am arranging a meeting with an IFA. I want fixed fee arrangement where I get someone to check my numbers and assumptions to see if I have missed anything.

It might seem strange, but I am applying for promotion at work. Only because I meet the criteria so part of me feels like I should go for it, even though I may finish later this year. At the moment I’m oscillating between December 2025 and 2026. It may depend on what the IFA says.

savingholmes

Perhaps you also need a clearer picture of how you will create a life you are happier with where work doesn't create your main identity. I like Vicki Collins on utube for that... 

glass_half_full

Thanks @savingholmes. Do you mean Vicki Robin? I searched and found some interesting videos by her eg the 'FIRE journey, it's about more than money.'

glass_half_full

Dear diary and all,

I think we have sorted out DS’s tax finally clearing the arrears and paying what was due, this has totalled £6k. He now has to save towards the July payment. At least the situation is now under control. Another development is that DS and his GF are going to spend some time apart. She has gone back to stay with her parents and it looks like they will be giving up their flat. It may well be that DS comes to live with us for a while. To be honest I think this will be a good thing for him whilst he decides what to do next. Luckily his work is commutable from us as it is not too far away. It will also save him a lot of money trying to keep a household going on his own. It will also save us money as we will not have to keep subsidising him for rent etc. It’s a bit uncertain at the moment but most likely that is what is going to happen. I have developed a plan to clear all the debt we owe this year. This is important to me as I approach stepping away from work.

glass_half_full

Dear diary and all,

I have spoken to an IFA for a firm who offer a fixed fee service to do a cash flow modelling of your retirement including drawdown etc. After he explained it, I’m not sure it will do more than the modelling I have already done with guiide.co.uk. I’m not going to go for this now but I may do a bit later.  It would be good to get a second opinion so I am also going to speak to another adviser who has advised colleagues of my OH as they approach retirement who comes with good recommendations. I want to see if he agrees with the modelling I have done and my assumptions.

DS is going to come home, he has given notice on his flat. Not sure exactly when so let’s see.

The DC pension is now £428k which is over the target (£400k) so I am going to reduce the contributions and use them to pay off the credit card debt we have (£13k). My aim is to clear this by the summer.

AgathaSquirrel

It sounds like things are coming together for you. I agree a second opinion on your modelling is a good idea at this stage.

Although it may seem like a step back for your son, from everything you’ve written, it sounds like the best solution for the moment. A bit of breathing space to build up funds and focus on next steps.

savingholmes

Yes I did mean Robin. Sounds a good solution on your son and debt clearance plan. Holding the promotion application go?

Ai could probably check your workings out