Aiming for Mortgage Free!

QueenJess

rugbymadfamily said:

@mark55man thanks yes, other investments have started thinking on. We both have pensions (husbands is public sector so he pays in a much higher % think its over 10% but should be a good outcome), I pay 6% and employer contributes that + 2%. Think will try up mine to 7% or 8% next year if we get any form of payrise. Then thinking of starting a small LISA for each of us, just to have something else aside from the pension. But this isn't an area I've though much about yet so if you have any other advice or things to think about please let me know!

Do your research first.  Although tax shouldn't be the only thing that drives a decision, actually your current and potential future pension tax situation can impact your finances quite a bit if you are looking to accumulate over a long time.

The choices are usually (1) Salary sacrifice (if available through work), (2) SIPP, (3) LISA, (4) Normal ISA - of course you can mix and match them.  You just need to think about timing you get them and tax in/out to determine the benefit you will receive.  it will be different depending on your tax band now and potential tax band in the future.

However, it looks like you aren't getting the max employer contributions?  Definitely get those ones first.

rugbymadfamily

Yes it's definitely something I need to do some more research in. Main reason I was thinking of a LISA was that I can access it at 60 (which is when we would like to try to retire ideally to get a few years of travel in before we get too old) and leave my proper pension until 68. I'll have a look at a SIPP as another alternative as hadnt thought about those. Will get doing some research over the weekend. 

Quiet weekend here (as with all I am sure!), got some good exercise done and spends were all in budget. Managed a NSD today as well 😊 Finding it good to track these as keeps my motivation up for challenges during that low part of the month (when all money has been saved / accounted for!).

mark55man

couple of differences and one similarity between LISA or SIPP (I have a SIPP and not a LISA) -

Difference 1 - is if you are or are likely to be a higher rate taxpayer - then currently the tax rebate is better on a SIPP.   
Difference 2 - if you are not yet of pension age, then (I think) LISA might count as assets if you are or are likely to be in receipt of benefits, and may reduce your entitlement
Similarity - they are both just tax wrappers for the underlying investments, so you need to understand what your strategy for them are, based on timescale and risk - plenty of posts on the pensions and saving's boards explaining the basics and some good reading/blogs

Good luck - they are a friendly and very knowledgeable crowd on those boards - especially the pension one

rugbymadfamily

Thanks @mark55man, appreciate your comments. I am putting aside some time at the weekend (not much else to do or distract me!) and will spend some time looking into it.

To be honest, the whole pension thing isnt something I have thought about enough (have paid into one since I started working 10 years ago but not much else). So as you say, need to figure out a strategy, need to factor my husband in as well and might even be that we set something up yeah, but with different risk factors which would give us more options. Hmmm, need to get doing actual work now but will have a good thing through in the next few weeks.

mark55man

The important thing is that you started - the plan for when your older, well that can take years to firm up.  Don't be too cautious when you are young (but not reckless) and don't be too risky when you are old (although in old Annuity days that was much more true than it is now when you have greater control and a greater range of options)

rugbymadfamily

Had planned a few NSDs but life does get in the way! I burst a tyre because an idiot on a delivery moped pulled out in front of me and I had to swerve to avoid him 🤬 then hit a pot hole.

Then one of my kittens wasn't well which meant a vets trip and surprise surprise the insurance company won't cover it. Again. This is the third thing they have wormed out of paying (we do have 2 cats lol we don't take them to the vet for nothing!), for the first time I had a case with the Financial Ombudsman service. But basically we've decided the insurance isn't worth the paper it's written on. So have cancelled it and will put £40 a month aside instead. This is more than I pay for the insurance (£20 per month) but given I'm currently paying the insurance and also paying the vets bills as the insurance company won't cover them I might as well just pay the bills and not pay the insurance. Arghhhh. Still, with not much else going on this month hopefully we can cover it from our normally monthly spends and not have to dig into the EF. If we do, then I guess that's the point of an EF!

rugbymadfamily

Busy busy busy few days at work. We are several team members down (left and we aren't allowed to replace currently) which means the rest of us just get more added to our workload. Starting to think it's time to look for my next career move. I've been here for nearly 3 years and not sure there is much more I can get out of the role (and theres no where to really progress). But, the commute is great and it would be a good place for working if we have kids. Think I might start putting the feelers out and see what the market is like. 

Money wise, tracking going well and things on budget but the vet spend is going to be split across this month and next while we build that pot up. Budget built for next year using the pots so think that's all looking good. Plan for the weekend:
- get pension research done
- update CV
- watch a lot of rugby!

rugbymadfamily

Rock n Roll Saturday night in lock down....Strictly Come Dancing and an M&S dine in for 2! At least the dine in comes with a bottle of wine 😂 more MSE than a takeaway as well lol

rugbymadfamily

Well wonders will never cease....I went up for a shower Sunday morning saying to my husband that we needed to head out for a food shop afterwards. Came back down and he had written a meal plan for the week and not one filled with random expensive meals but one based on the meat on the freezer and the veg in the fridge, gobsmacked didnt quite cover it 😂 So a good cheap food shop was done!

And now its Monday again, need to get some MB done to get some little mortgage OPs going. Then hopefully at the weekend we will get decorating our dining room, have money put aside for what needs doing and just need to get cracking with it!

rugbymadfamily

Head is swimming with ISA information and pension information and mortgage information lol. I know this is a mortgage board and our aim currently is to pay down the mortgage faster than the 25 year term, but the main reason for this is to be able to retire early (or at least drop down to PT / short term contracts), so have to think about the other things as well.

So today I got the details of the pension I was in for my old job and looked into that. I haven't contributed since I left but want to leave it where it is (main stream provider) as it is ticking along nicely and has fully recovered from the drop due to COVID (well its about £100 down currently compared to the value at the end of Feb this year so I think thats a win!). My current jobs pension (also with a well known provider) is much smaller as I haven't been there long so have just increased the risk level on that from "middle" to "mid-high" given that I am only early 30s there is plenty of time to lower the risk in future. Am going to increase my contributions again next year (can only do this annually). So feel like that was a well achieved task and pension doesn't need any attention for another few months.

So onto ISA research, but first things first, I read some really good advice about thinking what it is you are actually saving for as its much easier to achieve savings with a goal in mind. I think its kind of three-fold for us. 1 - for short term ie holidays in next 12 months. 2 - middle term ie house renovations (we need a new kitchen at some point) and car (we have just bought a 2 year old car but that will need replacing in 6-8 years I guess) and 3 - for early retirement. Think I mentioned it right at the start of this diary that we would ideally like to retire /semi-retire early and travel in our early 60s so need some funds for this! So I need to figure out the best way to fund all of the above and where to save it all. Am currently setting some aside for the 1st goal, but most of savings target is getting EF to 3 months expenses. Then focus will shift to mortgage OPs and savings, but I think that should be by about Feb next year and with very little else to do currently cos of lockdown, figure I might as well do my research now or else I will just get online shopping through boredom!

Well that got a bit rambley and off the mortgage topic. I just find it so helpful to write my thoughts out as it unjumbles them in my head (however jumbled they may appear on screen lol).