Time to decrease?

SomeMadeUpName

@Firefly12345 My observations fwtw

Don't assume the income levels will go on forever, the most secure job in the world isn't 100% secure, neither is your ability to do it (physical/mental health to name but one factor that can throw a curve ball).  So save while you can, you don't appear to be quite there yet (at least in the sense thaty if you can spend all that now what makes you think you can do with only moderate income in retirement).
BUT
I have a good number of friends with second homes abroad and not one of them has regretted it (maybe that will change with Brexit).  I'm sure some do, I've just never met them.

So strike a balance.

& definitely build a pension for the missus (unless you're planning to dump her).
Actually, do it anyway, otherwise she'll just take yours.   

kidmugsy

Firefly12345 said:  Salary: 130k + 10k bonus
Company contribution: Double my contribution with a ceiling of 10% 

My current contribution: 16%

For around the last 4 years I have been putting in close to the £40k max amount into my pension as it is a no brainer. This is why my savings are so heavily weighted to my pension. The contribution is via salary sacrifice so I am saving 40% at source. In addition to this for the amount I contribute that takes my adjusted salary under 125k I am effectively saving 60% in tax as between 100k and 125k the personal allowance is removed. The 60% tax I save doing this is decreasing year on year due to fiscal drag. E.g. inflation pay rises add to my salary but the band never moves. Pretty soon the effect will be minimal.

....   buying a property abroad

I see two attractive options.
(i) Keep bunging the max gross annual contribution into pensions to get the higher rate of tax relief while it still exists.
(ii) Alternate.  One year make just the 5% + 10% contribution.  Then the next year use carry forward to make a contribution so big that you avoid the whole of the effective 60% tax band.  As a follow up you may spring enough cash free to make a contribution to your wife's pension ...

I wouldn't buy a property abroad because I've discovered that you can use property abroad owned by other people. They will even serve you meals if you like, offer use of a swimming pool, and so on.  You could use the same one each time or use different ones, entirely at your own whim.  They call them hotels, resorts, chalets ...

P.S. Don't the new rules about pension taper let you avoid 60% tax every year anyway, without alternating?  I'm mildly surprised.

Dansmam

It's all looking good but you may find you change as life moves on and increasingly not feel you want to keep working. From 55 on I began to resent having to be at other people's beck and call. Also didn't want to be in the way of the young uns coming through behind me and be the block stopping them moving up the career tree.  May just be me 🙄 but  I've found ISAs have given more flexibility about when to pack in work. Chucked it all in at 58. Me and the pup are living on fresh air and ISAs before picking up pension (DB so I reduce the reduction the longer I wait). All money gives us is freedom over our choices. Best to have a mix I reckon. Best of luck with it all, oh and your wife should be maxing out pension 😉

Dansmam

And having toyed for years with the idea/dream/fantasy of a bit of land in a warmer climate I'm now firmly in the kidmugsy camp. Every asset being a liability. Hotels and rentals give so many more options. When we can travel again, whenever that might be.

SouthCoastBoy

I've never seen the attraction of owning property abroad, why restrict yourself to one property and location? Airbnb etc. mean there are always plenty of options. When I retire I am planning on spending 2 mths abroad in the winter but will be staying in various locations. Airbnb gives great flexibility for such adventures.

SomeMadeUpName

Owning a property abroad is not for everyone, and I can certainly see why some prefer not to do it, but there are pros as well as cons (as there are with everything).  Some possible pros:

If you have school age children and a flexible work life.  I have for example spent 4 of the last 12 years 'on holiday' (not quite, maybe an average of 1 hour a day on the laptop, but all overseas in either the sun or the snow).  90%+ of that time has been the whole family during school holidays as I have a school age child, how much would that have cost in paid for accommodation at peak time? @kidmugsy 's approach though is certainly the way to go if you spend less time away, and can do it during term time.

Many folk choose a property where they are close to a centre for their main pastime.  This might be sailing, paragliding, climbing, etc, etc.  Having all their kit ready and waiting for them in their own place is a big draw.

Also spending a lot of time in one destination means you develop a network there. Get known in the restaurants and shops, know everyone in your favourite bar.  If you have kids they end up with friends 'over there' so are happy to go.

I'm not trying to sell the idea to anyone, I can well see the attraction of the opposite (new horizons, greater flexibility), just trying to give some balance. 

EDIT to add:  Also if you buy a property using money you have then the return to you is in access and experience (so not taxable). The alternative is to invest that money in such a way as to provide income to buy access and experience.  That generated money will push up your income levels and so tax.  I realise you can mitigate with ISA, pension, EIS etc but on the assumption you have maxed out your appetite for those already then the taxman will have his slice.  With returns on money being low (interest at least anyway) the oppurtunity cost of money tied up in holiday property has never really been lower.

I look forward to being shot down..................

kidmugsy

SomeMadeUpName said:  I look forward to being shot down..................

Nope: each to his own.  

We owned a country cottage when we were young.  It's an experience we wouldn't have missed for the world.  But.  We were young: we had boundless energy. If something went wrong we fixed it - with all the advantages of doing so in a society we understood, in a familiar legal code, in our native tongue.

But eventually we did notice that our free time was almost always spent there.  What about other places we might have liked to visit?  Eventually we sold it, bought a bigger house for ourselves, and travelled more, including several spells of living abroad.  In rented houses.  

saucer

Dansmam said:

And having toyed for years with the idea/dream/fantasy of a bit of land in a warmer climate I'm now firmly in the kidmugsy camp. Every asset being a liability. Hotels and rentals give so many more options. When we can travel again, whenever that might be.

Very similar here. We talked about the home away, maybe France or Italy, for years but it never quite added up financially and as we edge towards being able to retire (4 or 5 years off) I’m glad we didn’t. I don’t think I would want to be tied down to (predominately) one location when there is a lot of world to see in a finite and indeterminate  timeframe. I can still see the attractions of the second home from home though. 

Nebulous2

I found a favourite area in France, worked out a budget, went over for three weeks to view houses with the intention of buying, and we ended up feeling we had fallen down a rabbit hole. Fishing at the bottom end of the market, everything was in need of a great deal of work. Even if you did the work they wouldn't have fetched anything like what had been spent on them. Then we saw dual-pricing. Properties were being sold for 30% less on French websites than on English language ones. We decided we were better sticking to caravanning and moving around - with the intent that we reduce the distances travelled and make the journey part of the holiday, rather than an endurance test. 

1980ds

Oddly enough I am in a very similar situation, same earnings, mortgage, desire to buy abroad however 5 years younger but aiming to hit 400-450k pension pot by 45.  My plan is to pull pension contributions back at 45, I’m saying this now but how do you feel about stomaching the 60% tax rate?  It’s always made me think £380 (with NI deductions) in my bank account or £1,000 in a pension pot £250 of which will be tax free!
the idea of buying abroad is an interesting one and definitely each to their own, we would enjoy the guaranteed sun and flexibility of hopping on a flight (one day!) on a Thursday evening and returning Sunday night all refreshed. 

Starting a pension for the wife is recommended to utilise her tax free rate