Future Proofing my life: Deposit saving then MFW journey in under 13 years

Grogged

There is no right or wrong answer.
At the end of the day it's what really matters to you that's important.
If the house is your priority then save for that and put any extra in your ISA.
That way you have the option to transfer it to your SIPP or your house fund.
Sleep on it and see what you think in the morning.

South_coast

LadyWithAPlan said:

On the back of @South_coast wonderful diary

I'm blushing 😳!

Chiglepig

Quite breathless reading your initial post, @LadyWithAPlan ! Welcome, I'll be following.

What struck me is that doing it on your own is challenging, but at least you are in complete control of your choices - to work more or not - to be really frugal or not - pension or deposit - (binary choices for rhetorical purposes only )! One thing you didn't mention is the approximate cost of the mortgage you need vs your current rent?

I think @Grogged has nailed it on the deposit/pension dilemma.

jimjames

It's a difficult choice re pension or savings but it does depend on time of life. If you are 50 then having the security of your own property would probably make more sense. Once you have the mortgage then paying into SIPP rather than overpaying mortgage as much may make up for it.

LadyWithAPlan

@Chiglepig thanks for stopping by. I am amazed at you actually getting through my initial post.  It was a long one to get my thoughts in order. 

Current rent and council tax is just under £700,  I have the deal of a lifetime. Love where I live and its a real community. 

My mortgage payment probably be £1850 pm on £300k mortgage plus CT of I guess £120 so triple current spend... the initial  interest portion will be  approx equal to my rent which makes me more relaxed and less pressured. But house prices keep going UP!

I spend hours before the tax cut 20/21  off looking at pension and tax  which is why I put £15.8k in my sipp cos of the maths. I like thinking in percentages so I may add 50 % of my Match betting  income each month to my Sipp. I love the fact I put tax free money (as its gambling) into my pension and the govt gives me money on it! That  way it motivates me to do more MB..  I am glad the Premiership kicks off again this weekend so I can ramp that up. 

LadyWithAPlan

@jimjames tx for the calm advice, that makes a lot of sense. It's great to get outside opinions. 
 Maths v heart v security.. At least I am looking at it rather than just my normal life of rapture.. I have travelled the world, followed my dreams and this new house dream (tx covid!) is a biggie in terms of cost, focus and making career  decisions..

@Grogged I did as you advised.. Slept on it. Realised I hate not investing in my sipp completely so at moment plan to just add 50 % of my monthly mb income to my sipp - so be probably £200 per month plus extra tilly tidy to round £10 at end each month. Not enough to hugely change the mortgage savings but keeps me content in the short term. Then as you say I can make a decision April 5th 2022 and mass move over money from savings  to my sipp once I have clearer picture of 2022 and  know my annual 21 22  income (freelance) plus where I am at with the house, savings and my work. 

@South_coast I am not sure I remember how to blush 😊 

I can declare officially that yesterday was my first ever decided NSD!!  Never tried deliberately to not spend.. 
I am sure I have had days in lockdown where I did not spend but I was just  away in Europe for 5 weeks (it was wonderful and I can work from anywhere with my main job) so I spend cash every day then and this week is all about restocking the fridge freezer  and getting back to life..

Aug NSD 1/8 woohoo first one ever

Need to work on my programme now and get it edited and ready to sell online my first online thing but I have a lot of specialist knowledge and a friend who makes a lot online  keeps badgering me to finish it.. Its part of my future proof plan as a passive income. 

South_coast

One more thought to throw into the mix.... Something I have seen others that are 50+ on here discuss is that instead of OP'ing the mortgage, they are paying as much as they can into their pensions, getting the tax relief and (hopefully) growth and then using their tax free lump sum to OP the mortgage. Obviously that's not going to help you during the deposit-saving stage, and it would leave you with less of a pension pot, but thought I'd chuck it out there 😀!

LadyWithAPlan

South_coast said:

One more thought to throw into the mix.... Something I have seen others that are 50+ on here discuss is that instead of OP'ing the mortgage, they are paying as much as they can into their pensions, getting the tax relief and (hopefully) growth and then using their tax free lump sum to OP the mortgage. Obviously that's not going to help you during the deposit-saving stage, and it would leave you with less of a pension pot, but thought I'd chuck it out there 😀!

Thanks - this is a great idea especially if I stay at HR tax payer Once I buy I plan to start paying 15% of my gross income into my SIPP, then OP but you may be right that I could instead chunk it all in the SIPP to the max to pay off as 55 is only 3 years away so I could easily access it.   Probably a blend of both will be best for me mentally as I don't want a 300k mortgage hanging round for years ..

So I think though in this 12 month short term whilst I get my deposit up higher - an amazing goal is if  I could get to 75% LTV  - but that may be too ambitious - I have decided to just put half my MB monthly income into my SIPP just this year just to see it move even a bit. I can always bulk it up at the end of the year.

NSD - yes I managed and staying in to make sure      August   2/8   NSD

Budget update:
Since starting this diary this week  I am suddenly really aware of my normal casual few pounds each day spending. I took lunch in on my one day in the office this week and I have started a shopping list of essentials only for the weekend.

Grogged

This was our thinking as well as we approach 55...
We're happy to trade the flexibility of an ISA for a SIPP, since being able to access it "just in case" is a few years away. Plus Mr Taxman tops it up as well.

SandyShores

Hi Ladywithaplan

Just subscribed - you are doing so well, looking forward to following your journey and getting some ideas and inspiration from you.

Here is a link to the article from The Times about a couple buying into Shared Ownership later in life https://www.thetimes.co.uk/article/were-priced-out-boomers-who-bought-into-shared-ownership-8qq2nfg8p I think you need a subscription but might be able to get a free trial, if not let me know and I will see if I can share it another way.