Retirement Planning Help

Rustin

Partner and i (we soon to be civil partners) are currently looking to retire 2028. A dep head teacher and social worker with a combined income of about 90k. Partner has a teachers pension which will pay around 18k per annum in 2028 and me LGPS with around 8k per annum same time.

The house will be payed off 2027, loan payed and debt free except mortgage Oct 2021.

Partner is higher rate tax payer but I'd planned to put £400 a month into an AVC with my LGPS (West Yorkshire Pension Fund).

We are avid camper vanners, pretty much finish work on a Friday and off we go most weekends and best case scenario would be start saving now for a newish camper/motorhome in 2028 when ours will be ready to retire. The plan would be to live in it touring Europe possibly further a field. I'm fully aware of current shengen rules and we'd adapt the plan to travel restrictions in 2028.

We have no savings as we've maxed out sorting the house which is now in tip top shape. Its worth 200k in todays market.

In October 21 after mortgage and bills, wifi, gas/electric, house insurance etc.  we have £2900 per month spare. I planned to put £400 a month into some form of investment or saving that would not be touched for camper & 400 into saving/investment for extra cash to get from being 57 at retirement to state pension.

This will leave us roughly £2100 for living. We live simply, kid is financially indie after uni so its just day to day living expenses and camper site fees so I'm hoping to build up savings from the 2100.

In 2028 we want to retire, sell the house, live in camper, not touch the money from sale of house, and best case scenario buy a place to live permanently when it becomes a physical struggle to camper van.

What would the big brains suggest looking at the plan. Particularly if the AVC plan is best, whether i should put more in, whether its best to invest AVC in partners pension, teachers pension, and what to do with the x2 £400's, whether to just put some more into AVC, SIPP, investments, Vanguard LS, im not risk averse and if we lost would amend plans. We can work for longer or live more cheaply. 

Apologies for long post, and it broad with not too much detail, but we really need to move quickly as the clock is ticking at our age and I want plans to be up and running in Oct 2021. 

Much appreciated in advance.

Albermarle

We have no savings

I would address this issue first before increasing investments . You should have at least an emergency cash fund for unexpected events/expenses.

Rustin

2k a month saved until March 2022. 12k emergency fund so same but from then.

TVAS

You will be out of the market if you sell your house and live in a camper van. This is a risk it could pay off i.e. buy when it is is buyers market or lose out if it is a sellers market. 
Also by making your house look gorgeous implies that you would want a house in mint condition bearing in mind you will be older and maybe less ability for DIY or even handle builders which is stressful when younger and fully fit.
So I do not like this idea at all. 
Get an AVC quote for the person on the lower pension of 8k.
ISAs and SIPPS
Have you considered the indie kid asking for help to buy their own property?
It wasn't clear have you got 12 months emergency funds? 

Triumph13

I would very seriously consider keeping the house / selling it and buying your 'old age house' and then renting it out whilst you are travelling.  Use a mortgage on the house to buy the replacement camper if necessary.  Like TVAS I would be very wary of being out of the housing market and the risk of not being able to buy back in when needed.

Thrugelmir

I'd second retaining a home. Living in a camper van abroad permanently sounds idyllic but perhaps underestimates the practical challenges of doing so. 

A decent camper home will set you back a sizable sum of money.  Perhaps start with premium bonds. Little point in risking your savings to the vagarities of the stock market.  When you've defined a time window for your plans. 

Nebulous2

We are caravanners, rather than motor homers, and have considered similar plans to yourself. Only one income between us, nowhere near your two. We looked at a lot of possible scenarios, including downsizing and eventually bought a house in a cheaper area. Selling our main home has given us a decent financial cushion to get us through to state pension age, although I think there is a good possibility we wont need to touch it and can live on my LGPS pension. The cheaper property gives us a base and a permanent address. 

Going abroad has certainly become more complicated, particularly with dogs, meaning realistically we would be limited to three months. The most we've been before was just over 3 weeks. It is quite frustrating heading home after 3 weeks in France / Spain and talking to someone who has been away for 8 weeks already and has another 3 months to go.

It very much has a limited life however. I talked to all these people who have been travelling for years, really enjoy it, and then I had a lightbulb moment when I realised it is very rare to talk to anyone who had been travelling in the autumn /  winter for more than 10 years. Lots of people at 6/7/8 years and then it seems to end.  

Costs touring aren't that high. We reckon 1500 euros a month, above our normal grocery costs would cover it, allowing for meals out, trips to tourist attractions etc. An ACSI card really helps for out-of-season campsites. 

If you are really serious about your timescale I'd hammer your living expenses, to live on less than you have done and save more. Financially AVCs or a SIPP to take your partner out of higher rate tax would be the best idea, but that would leave your pensions even more lopsided. You will also be in a position where your partner's pension is taxed and yours isn't between retiring and state pension age, so there would be some merit in building up yours. 

Good luck whatever you do. I've just stopped work, and don't know for sure how it is going to pan out, but caring responsibilities and travel restrictions are more likely to hamper us than finances. 

2nd_time_buyer

Just thinking aloud...
... but what about seling and buying a small low maintenance house/flat somewhere touristy. A bolt hole over the winter for you. Then let it out over the summer on Airbnb when you on tour. Fully managed you probably won't make much money on it but could cover costs.

Rustin

Thanks all. We will be saving from the £2100 to build an emergency fund, but i appreciate why posters have emphasised the importance of this as we've been knocked back by unforseen circumstances and had to clean out the savings before. So it is important. 

We've already helped our only child onto the mortgage ladder so that's done and dusted and the reason we are cash poor today.

I know the cost of a camper van/motorhome inside and out so that won't surprise us. That's why the £400 per month motorhome fund is steel ring fenced.  I know the running costs, diesal use and insurance, long term pitch prices throughout Europe and parts of North Africa. Its preparing financially for the day work stops where I am sub-novice.

Yes i agree, and we've thought about buying a property then renting it out, or just renting our current whichbtoday would be around 750/800 per month. The money won't be sat in a low interest rate bank account. We've had planned to buy a cheap house in the UK, 130k and a cheap house in inland spain for a base,  but living in a good motorhome seems doable for us. If it isn't we cut our losses and head back to west yorks.

I need advice on how to maximise the £1200, and whether I need to add to it from the £2100 left over per month, how to split it or potentially invest/SIPP it. It wont be touched unless something lifechanging happens and then all plans will likely need to be revised.

Living in motorhome whilst trekking around Europe and further a field is a is the ideal but who know, 7 years to go.

2nd_time_buyer

Nice one. Admirable stuff. Out of interest what size camper van are you thinking of getting?

Rustin

2nd_time_buyer: Ideally if health is good in mid 50's (we are both active, typing this from the camper after an 12 mile walk around Hawes, north yorks, feet are killing) then something like  swift select 184 which would be better for wild camping than a Class A or a Coach built but we have to be realistic about living long term and space requirements if its our full time residence. If not then more like a Swift Bessacarr 496.

Van's like the 184 may work with good awning...it will be dependent on how we are in a few years.

We are very active now which is not about body beautiful or joie de vivre, its bloody survival from having a very very sedantry admin heavy mostly desk bound full-time job.