SIDK saving and investmet advice

hellojohn8doe7

What financial advice would you give to a family with Single Income Double Kids (SIDK)... ?
Gross salary (only source of income) before any deductions is in 60-65k range. This includes bonus paid every 6 months.
Current status:

• Pension contribution: getting full employer contribution plus putting some extra through salary sacrifice.
• Cash in hand will pay 1 year of mortgage payments + council tax + grocery + internet + water + gas + electricity + mobile SIM plan. Not addd: car insurance, building insurance, life insurance, boiler cover, house maintenane, shopping, travel & entertainment, emergency funds.
• Debt being day to day credit card spending (paid in full each month) + mortgage at around 46% LTV.
• Not investing in S&S ISA

What can a household in above situation do to have more financial stability

NottinghamKnight

Save more?
Putting more into the pension would get higher rate tax relief though not accessible until late fifties (dependent on your age). If you can get below £50k then child benefit can be paid without charges, also the non working spouse needs to have the benefit paid on their main to get NI credits for state pension.
A s&s isa would be nice but maybe not an immediate priority. How stable is the employment given current uncertain times, is their insurance provision in place for redundancy or ill health, what would be the terms of employment termination?

Albermarle

Initial impression is that you are doing better than the majority of families and seem financially stable anyway, as long as you keep your job of course. As previous poster said if you could save a bit more/spend a bit less that gives you more of a cushion in case of problems

tacpot12

More cash savings to cover things like furniture and appliance replacements, car replacement, birthdays and Christmas, and boiler repairs (self-insuring is cheaper than boiler cover). I save for these items and for annual expenses such as car insurance in separate accounts. (Paying monthly for car insurance is more expensive as you are paying interest on the premium). 

Get some Permanent Health Insurance (PHI), as the state benefits are not generous and won't contribute to your mortgage. You can save money by having a long deferred period before the PHI pays out, e.g. 12 months. Match this to your emergency living expenses fund for maximum security.

Once you have an emergency fund in place, start overpaying the mortgage. The sooner you can repay the mortgage, the sooner you can be sure that there is nothing that can happen to cause you to lose your home. 

hellojohn8doe7

Putting more into the pension would get higher rate tax relief though not accessible until late fifties (dependent on your age). 

My current income is 10-15k above the 50k mark , of which I put away 7.5k in employer pension scheme. I think the forum is right and I should make it 10-15k, so that my net income is 50k. The net loss of in hand cash is not substantial, given that my pension fund amount is just 40k at my age of 33-36. I still have 32-35 years before state pension kicks in, which won't be huge because currently I have only 11 qualifying years (including 2020/21).

How stable is the employment given current uncertain times, is their insurance provision in place for redundancy or ill health, what would be the terms of employment termination

Not stable sadly and this is my biggest risk as all income is from a single source only - no diversification. I have life insurance and critical illness cover both as group employer policy and as a private cover, because group employer policy will go away if the job is gone. No redundancy insurance in place for my biggest financial risk. I have been with my current employer for a week less 5 years, so in case of redundancy I should get 5 weeks of PILON and 5 weeks of redundancy pay.

Once you have an emergency fund in place, start overpaying the mortgage. The sooner you can repay the mortgage, the sooner you can be sure that there is nothing that can happen to cause you to lose your home. 

My house is a small 3 bedroom place (value around 150-165k), sufficient for next 1 - 1.5 years maximum and with children growing up, I will probably have to upsize fairly soon. My current mortgage is at 46% LTV and sadly I had long term fix which means I am paying a high 1.94% interest. I have to remortgage in middle of next year, so will hopefully reduce my monthly payment. Overpay mortgage doesn't look financially smart but I agree that the mental peace is priceless.

hellojohn8doe7

Overpay mortgage doesn't look financially smart but I agree that the mental peace is priceless.

The reason I say not so positively about overpaying mortgage is because overpaying saves me 1.94% interest, but if I were to put same money in regular saver of 4% (Kids Saver) or some S&S ISA,  then likelihood of getting over 1.94% will be higher.